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VA: As he runs for governor, McAuliffe wheels and deals electric cars.

GreenTech Automotive Chairman Terry McAuliffe is running for governor of Virginia while hawking an electric “MyCar,” with financial help from the state of Mississippi.

By Kenric Ward | Virginia Bureau

FREDERICKSBURG — Amidst his second run for governor of Virginia, Terry McAuliffe is spending time and other people’s money outside the state trying to kickstart his sputtering electric “cars.”

McAuliffe, who touts himself as a “businessman” first and former head of the Democratic National Committee second, is chairman of GreenTech Automotive, which is beginning to build “Neighborhood Electric Vehicles” in Mississippi.

GreenTech touts its “MyCar” — top speed of 45 mph and a price tag around $10,000 — as the future of urban transportation. Roadside skeptics say the NEV looks like Solyndra on wheels, a disparaging reference to the heavily subsidized solar company that went bankrupt two years ago.

In a 2010 interview, McAuliffe predicted that his company’s first-generation NEV would go on sale mid-2011. GreenTech initially pledged to hire thousands workers to assemble tens of thousands of vehicles a year at its new Tunica, Miss., plant by the end of 2012.

None of those projections has come close to fruition. The Tunica plant is still under construction, and the payroll barely tops 100 workers.

“They talk of a big assembly line. They had six cars,” said Michael Sheffield, who has covered the northern Mississippi project for the Memphis Business Journal.

Working out of a temporary facility in Horn Lake, Miss., 15 miles north of Tunica, GreenTech has been as quiet as its electric vehicles. Following a visit by Bill Clinton in July, the company didn’t post another announcement until this month, when it showcased a handful of NEVs to the U.N. Climate Change Conference in Doha, Qatar.

International connections

As McAuliffe vows that GreenTech “will help save American manufacturing, create thousands of middle-class jobs and reduce dependence on foreign oil,” the New York native has cultivated close connections to China.

GreenTech CEO Charles Wang oversees construction of assembly plant in Tunica, Miss.

Charles Wang, president and CEO of GreenTech, brought a background in car dealership networks and auto parts manufactures in China. He also served as secretariat general of China Financial Policy Research Center of Peking University.

In 2011, GreenTech reportedly began construction of a production site in Inner Mongolia and formed a joint venture in China with Shengyang Zhongrui Investment Co. BusinessWeek said core components for MyCar would be built by GreenTech in Mississippi, and GreenTech vehicles would be sold in China. That information has been scrubbed from the GreenTech website.

Sheffield told that nearly all of the early assembly parts came from China.

Lyn Arnold, president of the Tunica Chamber of Commerce, agreed that was the case … until recently. “It’s changed in the past year. Now they are sourcing most of their parts from the U.S.”

But, Arnold added, no suppliers have located to Mississippi to feed GreenTech.

Investment for the electric-vehicle project is sketchy, and, like production, behind schedule.

GreenTech, which has no filings listed with the U.S. Securities and Exchange Commission, says vaguely that it relies on “private financing.”

At one point, the company used the controversial federal EB-5 program, which grants green cards to foreign nationals and their families in exchange for investments that create 10 or more jobs in the United States.

But with only about 100 employees currently in Mississippi, GreenTech’s EB-5s gambit has not been much of a fundraiser or job generator.

“There’s a lot of criticism of (EB-5s) being basically immigration scams,” said John O’Dell, a senior editor who has written about GreenTech for Edmunds automotive research.

O’Dell said NEVs, such as those already built by GEM-Polaris, “make a lot of sense in closed-campus environments like factories because they’re incredibly cheap to run” and have a range up to 70 miles.

“The question is, ‘How much money can GreenTech afford to lose until they get traction?’” O’Dell asked. “There’s an enormous amount of money involved in building vehicles and maintaining inventory. It’s not like building a computer.”

Mississippi gamble

McAuliffe & Co. have not received federal “green energy” subsidies like the ones that fueled Solyndra, but GreenTech did get a multimillion-dollar assistance package from the state of Mississippi and Tunica, an economically depressed area desperate for new business.

Public loans and grants to the company total more than $8 million, with millions more in tax exemptions and rebates.

Sheffield said Tunica officials were particularly eager to do the deal.

“They’ll stay with this until the wheels fall off,” he predicted.

Though Tunica County is home to several riverboat casinos, the winnings haven’t trickled down to the hardscrabble community in northwest Mississippi.

“The city doesn’t even have a Wal-Mart — just a Waffle House and a Dollar General,” Sheffield said.

Mississippi’s Economic Development Authority says the taxpayer subsidies are contingent on GreenTech raising $60 million by Dec. 31, 2014. If GreenTech fails to meet the capital requirement and hire 350 full-time workers, local and state authorities can “claw back” their investments.

Skeptics wonder if those provisions will be worth the paper they’re written on if the GreenTech goes under.

McAuliffe, whose salary is unknown, has not disclosed his financial backers, saying only that they are “strategic investors active in the green technology area.” But by all accounts, the totals raised so far are dwarfed by the sums GreenTech needs to ramp up promised production.

Why not Virginia?

Empty manufacturing buildings abound in Danville, whose 15 percent unemployment rate is among the highest in Virginia.

GreenTech, headquartered in McLean, Va., landed in Mississippi because Gov. Haley Barbour offered the company a better deal than the Old Dominion.

Virginia officials said the GreenTech project was brought to Virginia Economic Development Partnership in 2009, during then-Democratic Gov. Tim Kaine’s administration. But VEDP was never able to get a concrete business plan with financing from the company.

No formal proposal was brought to either Kaine or his Republican successor, Gov. Bob McDonnell.


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