AFSCME 3357-HOF'S BLOG

From the Something's Rotten in Alabama File:
New Chinese-Owned Plant to Build 300,000 Supercars Annually



Lynyrd Skynyrd is associated with the state of Alabama (even though the band was formed in Jacksonville, Florida), but when I read this post on thetruthaboutcars.com, the first thing that popped into my mind was a line from a the tune Uneasy Rider by North Carolinian, Charlie Daniels.

"And I laid it on thicker and heavier as I went."

Here's the story: Chinese industrialist, Yung Yeung, billed as a former head of Chinese auto manufacturer Brilliance Automotive, recently announced plans to build a $6.5 billion car manufacturing plant in Baldwin County, Alabama. The company building the cars is called Hybrid Kinetic Motors. HK Motors says it is planning on building 300,000 super efficient cars per year in the Alabama facility by 2013, and the facility will employ about 5,500 Alabamians. Even though the company doesn't really exist yet, and the car hasn't been designed yet, that didn't stop Governor Bob Riley and key legislators from participating in the press conference to announce the new plant.

The FOS meter gets pegged to the firewall with the specifications of the new HK automobile. The car is supposed to run on a mixture of gasoline, compressed natural gas and electricity. It's supposed to get 45 MPG even though it will have a 1.5 liter (think Honda Fit sized) engine making 400 horsepower. Yeah, and monkeys will fly out my tailpipe.

Who's going to pay for this new megafactory? Well, the good news appears to be that the first-level money-losers will be Chinese. The company plans to take advantage of the US government's EB-5 visa program. This program grants permanent residence visas to entrepreneurs who invest $500,000 to $1,000,000 in a business in the United States. Even so, there are a lot of things that can go wrong when state and local governments give assistance to a manufacturing plant with no visible means of support. Just ask the folks in Tipton, Indiana.

Just a month ago, from Missisippi there was a similar announcement involving a former Brilliance Chairman, Yang Rong. According to one source, Yang Rong achieved remarkable growth during his tenure as Chairman of Brilliance, nevertheless, Rong left the country after being accused of “economic crimes of embezzlement of state assets” in 2002. Rong's Mississippi plan promised a $6.5 billion facility to hire 25,000 local workers and produce one million cars per year. There's a lawsuit pending in federal court in then Northern District of Mississippi featuring Hybrid Kinetic Automotive Corp. as a defendant. I don't have access to Pacer right now, so I can't check it out, but it appears to involve allegations of fraud.

What do I take from all this? Apparently it's more lucrative to be a former Brilliance Automotive Chairman than a former Nigerian Oil Minister.