Limburg car manufacturer VDL Nedcar is back to square one with a loss

Limburg car manufacturer VDL Nedcar is back to square one with a loss

VDL Nedcar can start again. It appeared on Friday morning that the American car manufacturer Canoo most likely does not want to have futuristic, electric vans built at the Limburg car factory – one of the largest employers in the region with approximately 5,000 employees. This leaves the Born factory empty-handed, while the departure of current client BMW in 2023 is approaching.

VDL Nedcar has been searching diligently for several new clients for some time now. To this end, it is looking specifically at start-ups that make electric vehicles, such as Canoo. They have a car design but no factory, and VDL has a factory without a car.

The letter of intent with Canoo was celebrated in June as an important step by Nedcar’s parent company VDL, the industrial group of the Van der Leegte family. Although Canoo would not use the entire capacity of the plant, it was a good start and could lead to more confidence among other clients. Canoo himself said after a long search and thought that Nedcar was “the right partner”.

Doubts

Now Canoo shows itself from a different side. In a document filed with the US stock market regulator SEC, the company writes that it “does not expect” to conclude a definitive agreement with Nedcar. It points to “developments at VDL Nedcar” – which is not clear. If there is indeed no definitive contract, Canoo wants to talk to VDL about financial compensation. VDL, which had a turnover of 4.6 billion euros in 2020, announced on Friday NRC know it is in talks with Canoo about the partnership. Canoo did not respond to a contact request by email on Friday afternoon.

The news is not completely unexpected. Canoo – founded four years ago in Los Angeles by two Germans – has already hinted in recent months that it would rather build its own factory in the United States. Then you have more control, according to CEO Tony Aquila.

This is a major setback for VDL. Although Canoo never intended to put the entire factory into operation (only 15,000 cars in 2023, where the factory can build 200,000), the arrival was considered a hopeful milestone. Nedcar also looked for additional clients before BMW’s final departure, but was unable to close a deal for years. At the same time, it did want to continue expanding the factory, in order to be able to offer more flexibility to potential customers. In the Provincial Council of Limburg, many parties had doubts about these plans for a long time: was it necessary to proceed with expansion if there were no new clients?

With Canoo, VDL proved for the first time that it can indeed bring in parties, to the relief of staff, trade unions and politicians. The fact that the start-up had a somewhat turbulent past – departing managers, a strongly fluctuating share price, an unclear deal with Hyundai, an investigation by the stock watchdog – did not matter.

Canoo was a fresh newcomer, it was stated at VDL, and it was eager to participate in its mission to shake up the car market. The entrepreneurial style of the company would also suit VDL, according to the industrial group. And who knows that in the future it would like to build more cars per year than 15,000.

Also read: Nedcar’s new customer has a turbulent history

For VDL Nedcar, the canceled deal means that it will have to look for large new clients even more urgently. Time is running out. In fact, a year ago, when BMW announced it would stop in 2023, the situation was the same as it is now. And building cars is a complex process, a new client has to discuss all kinds of specifications and the layout of the factory in good time.

erratic companies

In recent weeks, however, there have been striking noises about this. VDL is according to The Limburger in conversation with the American car start-up Rivian. The Ministry of Economic Affairs and Climate has also confirmed that it is in talks with Rivian about a possible production location in the Netherlands. That ministry has been called upon by the full House of Representatives by motion to support Nedcar in its search for new customers.

Rivian is known for an Amazon-backed mega IPO last November. The company was worth $100 billion even shortly after listing — more than Ford and General Motors. Rivian, like Canoo, has never built cars on a serious scale. It does have orders from Amazon for more than 100,000 delivery vans.

Rivian would like to serve the European market with Nedcar. At the same time, this company also faces complications. At our own factories in the United States, the production of models has already been postponed several times.

That’s the tricky part about the electric-car start-ups Nedcar looks for: they may be the factory’s rescue, but they’re erratic businesses. Future-proofing and strategy are often still very unclear.

If an agreement with Rivian is successful, VDL will still be able to close 2021 on a positive note at the last minute. It was a difficult year for the industrial group (15,000 employees in total). In addition to the deal with Canoo that was not, after all, an attempt to take over electronics group Neways failed before the summer. Moreover, the Helmond-based car startup Lightyear decided not to build at Nedcar, but in Finland, noting that the electrical capacities were better there. VDL also struggles with enormous parts shortages. And in October, the company was hit by a computer hack, which forced it to shut down all systems.

Limburg car manufacturer VDL Nedcar is back to square one with a loss
Source link Limburg car manufacturer VDL Nedcar is back to square one with a loss

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