The way forward for as much as 400 former Romeo Energy Inc. employees is unclear after Nikola Corp. mentioned Friday it could shut a virtually new battery-making plant in Cypress, California, and transfer the work to its personal meeting plant in Coolidge, Arizona.
Nikola filed a Employee Adjustment and Retraining Notification Act (WARN) discover for the plant that Romeo opened in June, a spokeswoman mentioned. The WARN Act requires most employers with 100 or extra employees to offer 60 calendar-day advance notification of deliberate closings and mass layoffs of workers.
Nikola bought Romeo, which was on the snapping point, in an all-stock deal valued at $144 million in August. On the time, Nikola indicated it deliberate to maintain all of Romeo’s workers.
Nikola pivots to chop prices
However a softening economic system coupled with an even bigger monetary mess than it anticipated on the time of the acquisition led to a pivot. Romeo, which formally grew to become a part of Nikola in October, instructed at the least one buyer, Lightning eMotors, it wouldn’t honor contracts for battery packs or upkeep.
Nikola itself has diminished truck manufacturing due to increased battery prices. Each sale of its battery-electric Class 8 Tre is a cash loser. Romeo discounted each battery pack it bought Nikola — its largest buyer — by $110,000. Nikola is attempting to get better that price because it takes over Romeo operations.
“This choice reinforces our dedication to discovering methods to optimize our price construction and create a sustainable enterprise mannequin,” Michael Lohscheller, Nikola president and CEO, mentioned in a information launch. “We stay targeted on assembly our 2023 milestones, together with pack and module manufacturing targets.”
All Romeo manufacturing and engineering workers, together with short-term workers, stay on Nikola’s payroll. That will change when Nikola leaves the Cypress facility within the third quarter and seeks to sublease the investor-owned plant. Nikola laid off 7% or its personal workforce, about 100 workers, within the fourth quarter.
Nikola plans to develop its next-generation battery administration system software program and modules at a separate California facility. The corporate has an settlement with Proterra Inc., primarily based in Burlingame, California, for future battery packs.
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