By DANIEL MILLER <\/p>\n
Posted date: 3\/8\/2010<\/p>\n<\/div>\n
Electric car maker BYD is looking to open its North American headquarters and an auto assembly plant in Los Angeles County, according to sources familiar with the matter.<\/p>\n The efforts by the Chinese company, which generated big buzz since Warren Buffett invested nearly a quarter-billion dollars in it two years ago, have touched off a scramble by area cities vying for its business. While BYD\u2019s offices would likely be modest in size, the assembly plant could top 1 million square feet and create hundreds of jobs.<\/p>\n \u201cIt would be a tremendous boost to our economy and economic growth and prosperity,\u201d said Tony Bell, spokesman for Los Angeles County Supervisor Michael Antonovich. The supervisor has met with BYD executives both in China and locally over the last year to woo the company.<\/p>\n Other officials who have either talked with BYD executives or are aware of the company\u2019s intentions include Mayor Antonio Villaraigosa\u2019s new jobs czar, Austin Beutner, and Bill Allen, chief executive of the Los Angeles Economic Development Corp.<\/p>\n An announcement on the selection of a headquarters office could come within the next few months, with the decision on the assembly plant coming later, perhaps by the end of the year, according to sources.<\/p>\n Officials with BYD declined to comment.<\/p>\n BYD Co. Ltd. is one of the world\u2019s biggest rechargeable battery manufacturers and also makes consumer electronics. Despite entering the auto market only seven years ago, its BYD Auto unit is already the fourth largest car maker in China. The company makes electric, hybrid and gasoline vehicles, and it sold 450,000 units in China last year, or slightly more than new Hyundai sales in the United States last year.<\/p>\n <\/span><\/p>\n The company\u2019s BYD F3 four-door sedan, which sells for less than $10,000, is a top selling compact in China.<\/p>\n It also makes a plug-in hybrid that went on sale in December 2008. But it\u2019s the BYD e6, an all-electric vehicle said to have a nearly 200-mile range on a single charge of its lithium-ion batteries, that has generated the most buzz.<\/p>\n At Detroit\u2019s North American International Auto Show in January, BYD made headlines with an announcement that it wanted to enter the U.S. market as soon as this year with its BYD e6. Other reports said it also wants to sell the plug-in hybrid here. <\/p>\n Analysts have been closely following the company since 2008 when it sold a 10 percent stake to mogul Warren Buffett\u2019s Berkshire Hathaway Inc. for $230 million. It has been reported that L.A. billionaire Charles Munger, Buffet\u2019s longtime partner, was the driving force behind the investment.<\/p>\n Southern California makes sense as a headquarters location for the company, according to analysts. It\u2019s the biggest auto market in the United States and recently has seen an explosion of so-called \u201cgreen tech\u201d firms either directly or indirectly involved in the production of electric and other alternative energy vehicles. <\/p>\n Tesla Motors Inc., a Palo Alto company that makes a high-performance, all-electric roadster, maintains its design studio in Hawthorne. Tesla also is looking to locate a car manufacturing plant in the county, with Downey and Long Beach vying for the much publicized facility. What\u2019s more, Honda\u2019s North American headquarters are in the county and Toyota has a large corporate presence in Torrance.<\/p>\n \u201cJust its pure size as a market and the warm climate make it an ideal location for an electric car company. As one of the hubs of car culture, innovation thrives in areas like that,\u201d said Bruce Harrison, an automotive analyst for research firm IHS Global Insight.<\/p>\n <\/span><\/p>\n However, officials who have met with BYD said it is possible that the headquarters and plant could be located outside the county, though they did not say they were aware of any other places the company might be looking.<\/p>\n Munger\u2019s secretary said he would not comment for this article. Berkshire Hathaway did not respond to requests for comment.<\/p>\n Competition<\/strong><\/p>\n Long Beach, Los Angeles and Lancaster are cities that have been vying for the company\u2019s attention, according to sources.<\/p>\n It appears that the offices and manufacturing facilities could be located in different cities, with Lancaster negotiating to have the auto plant located in the Antelope Valley community.<\/p>\n Joe Cabral, the city\u2019s communications manager, said it was working with Antonovich\u2019s office to \u201cmake sure we bring BYD here,\u201d though he declined to comment on the company\u2019s space requirements or the talks.<\/p>\n \u201cNegotiations are sensitive,\u201d he said.<\/p>\n Los Angeles also is pushing hard to get the company to move within its limits and is said to be offering incentives for the company to come; such a success would be a coup for Villaraigosa, who has promoted the development of a \u201cclean tech\u201d corridor starting with a 20-acre site near downtown. A plan to locate a light-rail car assembly plant there fell apart last year when the Italian manufacturer AnsaldoBreda pulled out of the deal at the last minute.<\/p>\n Robert \u201cBud\u201d Ovrom, the city\u2019s former deputy mayor of business development, confirmed the city\u2019s priority interest in BYD. He said the effort is being headed by Beutner. <\/p>\n \u201cAustin made it crystal clear to his people that he really wanted to figure out what we could do,\u201d said Ovrom, who is currently general manager of the Department of Building and Safety.<\/p>\n Beutner declined to comment, except to say, \u201cPart of servicing private sector employers well is holding the nature of our conversations in confidence. And the right time to share is when we have something to share that we\u2019ve accomplished.\u201d<\/p>\n Meanwhile, BYD has toured space in Long Beach. It considered leasing a vacant 28,000-square-foot car dealership there, where it would have located a marketing center and offices, according to broker Jodi V. Meade of CB Richard Ellis Group Inc., who represents the owner of the 4.5-acre property.<\/p>\n <\/span><\/p>\n Meade gave BYD officials a tour of the space earlier this year, which other sources said would have been adequate for the company\u2019s headquarters. However, BYD passed on the site.<\/p>\n \u201cThey wanted to be near the port. I thought that was a good play,\u201d Meade said. \u201cWhat they had told me was, although they liked the building and the size requirements worked, they needed to be in L.A. because the city of Los Angeles is incentivizing them to do so,\u201d said Meade, director of the western region of CB Richard Ellis\u2019 Automotive Properties Group.<\/p>\n BYD\u2019s broker, Ben Stapleton, who heads the national clean technology group for Jones Lang LaSalle Inc., declined to discuss details of his assignment, except to confirm his involvement. Long Beach officials did not comment.<\/p>\n Although all new jobs are prized in a recession, manufacturing jobs are particularly coveted. Los Angeles County lost 54,000 manufacturing jobs \u2013 12 percent \u2013 just in the last two years.<\/p>\n Larry Kosmont, an L.A. economic development consultant, said that BYD would be a big coup for the county and any city that lands the firm. Kosmont said BYD would offer high-paying jobs in a growth industry.<\/p>\n \u201cSo, they would get the high priority from a city\u2019s economic development agency,\u201d he added.<\/p>\n Kosmont said that BYD will likely be offered a mix of local, state and federal tax benefits from any city seeking to secure it. Among the benefits could be sales tax credits and rebates, and business investment tax credits.<\/p>\n \u201cIf these cities are smart, they have someone crafting a proposal that would be very competitive. That\u2019s what I would do,\u201d Kosmont said.<\/p>\n Moving forward<\/strong><\/p>\n BYD is based in Shenzhen, a city of nearly 9 million residents just north of Hong Kong that is the second busiest port in mainland China; Shanghai is first.<\/p>\n Its all-electric BYD e6 is \u201ca rudimentary, basic electric vehicle,\u201d according to automotive analyst Brett Smith. But the car has made the firm a pioneer in the field because of the five-door hatchback\u2019s mass appeal. It could sell in the United States for about $40,000, according to reports.<\/p>\n \u201cBYD certainly has, while not an enormous amount of experience in electric vehicles, a very good proven track record. They certainly have the faith of pretty strong investors in this country,\u201d said Smith, director of the Automotive Analysis Group for the Center for Automotive Research.<\/p>\n <\/span><\/p>\n Indeed, the Berkshire Hathaway connection has separated the company from other fledgling alternative energy car makers. \u201cWarren Buffett is a very serious guy so if he\u2019s investing in BYD you have to take anything that might be coming from that company seriously,\u201d said Harrison, the IHS analyst. <\/p>\n The addition of BYD to the local green technology marketplace would separate the county from other metropolitan areas attempting to become the new Detroit.<\/p>\n Besides Tesla, electric car maker Coda Automotive is headquartered in Santa Monica; battery maker Quallion LLC of Sylmar plans to open a manufacturing plant in the county that would build rechargeable batteries for electric cars; and Balqon Corp. makes small electric trucks at a Harbor City plant.<\/p>\n The impact isn\u2019t lost on county boosters, including Allen of the Los Angeles Economic Development Corp. While he wouldn\u2019t answer questions about BYD, he said in a statement that his organization had developed an excellent relationship with the company\u2019s management and had made \u201cgreat progress\u201d in addressing the issues that would factor into BYD\u2019s decision. <\/p>\n \u201cIt would represent a huge win for our region\u2019s economy,\u201d he said.<\/p>\n <\/p>\n Share Investor Links<\/span><\/a><\/a><\/p>\n Share Investor Blog<\/a> – Stockmarket & Business commentary Download the 2009 Warren Buffett Letter & 2009 Annual Report to Berkshire Hathaway Shareholders<\/span><\/a> Recommended Amazon Reading<\/span><\/p>\n
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