U.S. regulators seek information on Windrose truck VINs
Windrose Technology, an electric big rig startup that, according to the Journal, has received considerable media attention and been compared with innovators such as Waymo, faces financial and regulatory problems, the Wall Street Journal reported after interviews with current and former employees and a review of internal company communications.
The Chinese-owned, Belgian-headquartered company sought to disrupt the global trucking industry with the R700, an electric big rig boasting twice the driving range of Daimler or Volvo electric trucks and a price tag about $100,000 less than competitors. To date, Windrose has 36 trucks deployed worldwide, Han told the Journal, and has secured orders this year for more than 150 trucks in the U.S., Norway, Chile, and Australia.
But by March, the company was in such disarray that Han was demanding to know where one of his $285,000 trucks had gone, the Journal reported. Two former employees fired in January, Travis Waite and Harold Keller, refused to help locate the vehicle until Han paid them a combined $91,000 in unpaid wages and benefits. They still have not been paid, they told the Journal, and the truck remains missing.
Han disputed Waite and Keller’s accounts and said the dollar amounts they claim are “unfounded.”
The standoff highlights a pattern former employees described, in which expansion commitments continued while wages went unpaid. Han, a 36-year-old with a Stanford master’s in business, sponsored a basketball team in Belgium, promised a truck factory in France where he posed for a photo with President Emmanuel Macron, and pledged $15 million to Stanford University contingent upon Windrose going public, the Journal reported.
“A botched VIN label is a middle finger to the whole process,” said Jason Roycht, a former Windrose consultant and Nikola veteran, commenting on the truck identification issue. “And once you see that, you immediately start to question compliance with everything underneath it.”
Han blamed the VIN issue on a former employee. He told the Journal that Windrose has been “ultra clear about the fact that these trucks came from China” and that in the future trucks would be registered correctly. A representative for the National Highway Traffic Safety Administration said the agency is seeking additional information from Windrose. Submitting false information could mean a civil penalty of almost $28,000 for each violation, according to the agency.
Last October, Windrose’s then-head of North American operations, Jason Gies, demanded missing wages through an attorney, according to a federal lawsuit. Gies was fired days later, he alleges in the suit. In January, a federal judge ordered the company to pay $413,000 in unpaid wages and severance. Neither Han nor Windrose appeared in court for the case, the Journal reported. Han said he would contest the judgment and claimed Gies was fired for cause. A lawyer for Gies, Michael Pitt, told the Journal that Gies was not fired for cause but was retaliated against for asking for unpaid wages.
In Michigan, labor regulators ordered Windrose to pay almost $10,000 in back wages and interest. Han said he would pay the money but disputes the amount and may file a counterclaim.
“I’m definitely at fault for being too optimistic, but that’s the common shortage [sic] of an entrepreneur,” Han told the Journal.
Han said the company has $100 million in equity and $200 million in lines of credit and is still in the process of raising a further $100 million in equity. “The key is not to have a huge cash balance in the bank, but to use the cash well (as we have) and reach profitability as a company, so that you’re generating cash versus having to save cash,” he said.
Waite, the former driver and technician, told the Journal he is owed almost $30,000 in back pay. He said Han always had an explanation for why wages were delayed and a promise that problems would soon be resolved.
“I believed in the product,” Waite said. “I didn’t really believe in Wen.”