• Aug 31, 2009
Hybrid Kinetic Automotive Corp. rendering - click above to enlarge

The headline is attention-grabbing. A former Chinese auto executive is proposing a $6 billion plant in economically-distressed north Mississippi that will employ 25,000 people and produce one million cars a year.

Automotive News' story is both intriguing and complicated – and not just because three players are named Wang, one is named Yang – so buckle up for the short-and-sweet Autoblog version.

Yang Rong was once China's third-richest man as the CEO of Brilliance China Automotive Holdings Ltd. But after some disagreements with a Chinese government official in 2002, Yang fled the country and settled in Los Angeles.

Cars are only one of the reasons Yang wants to build $6.5 billion plant in Mississippi (that's six times the cost of Toyota's Mississippi plant, by the way). Another is green cards. When Yang left China, he also left his fortune and has apparently been unable to recoup any of it. It's a scary scenario that many wealthy Chinese fear: upset the government, lose your money. But the U.S. government makes it easy for Chinese residents to both invest their cash in America, as well as move here. Invest a minimum of $500,000 in an economically distressed region of the U.S., creating at least 10 jobs, and you get permanent resident status.

Vincent Wang, an associate of Yang's, says Italdesign Giugiaro is designing the new venture's cars, and documents show Porsche AG providing "our car's engineering design." Giugiaro confirms it has talked with the group, Porsche essentially says it has no comment. Such a controversial car must be powered by something just as unusual, right? Oh, yeah. The CEO of the project, C.T. Wang, tells Automotive News, the cars will be "powered by a combination of gasoline, electric, hybrid and compressed-natural-gas powertrains."

Yang calls his project, Hybrid Kinetic Automotive Holdings, Ltd. One of Yang's former associates has split from the group and also plans to build an automotive plant. That company is now called GreenTree Automotive, after being forced to change its name from Hybrid Kinetic Automotive Corp. Yeah. 'Cause that would have just been too confusing.

And where in Mississippi would someone go to gamble $6.5 billion on an automotive plant? Tunica County, of course. Home to nine of the Hospitality State's approximately 30 casinos.

[Source: Automotive News – subs. req.]


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  • 15 Comments
      • 5 Years Ago
      we will see what this actually amounts too
      • 5 Years Ago
      I got an email from Yang. In it, he states he is a multi billionaire businessman but he has fled his country of China due to political reasons, and all his funds are presently trapped in that country. He was looking for an overseas partner so that he could transfer the sum of US$6,500,000,000.00 dollars. 30% of it is to be held for tax purposes, but the remaining 70% would be divided evenly between us. He also states that this is 100% safe. All he needed was for me to wire $3000 to get the process started.
      • 5 Years Ago
      There must be something fishy about all of this.
      • 5 Years Ago
      Wang, Wang, Yang & Wang?
      • 5 Years Ago
      will it hurt to be less racist? This guy is trying to build a business in the USA, generating job in the USA. He's basically building an AMERICAN business. Just because he's Chinese you guys are still going to ridicule him? How about you start a venture building green cars in the states? Or only whites are qualified to make cars in the US?

      Whenever anything related to Asia pop up here, this blog turns into a racist paradise like the Free Republic or something.
      • 5 Years Ago
      I bet that it is a combination of some of those powertrain technologies not necessarily all of them that will make it into potential production cars. I would hazard a guess that the first model would be a plug-in electric / gasoline hybrid. What's unfortunate is that diesel is not listed anywhere there, because a plug-in electric / diesel would be interesting due to having more off-the-line pep and economy.
      • 5 Years Ago
      Rong, on so many levels. I wish him well, but it all seems so familiar like a Chinese remake of "Gung Ho" (http://www.imdb.com/title/tt0091159/).
      • 5 Years Ago
      I live in Mississippi. It's people are incredibly friendly, industrious, and serious about turning this state into an economic powerhouse. The governor is a seriously powerful Washington insider.

      The state knows a thing or two about manufacturing too. In my area, 17,000 Mississippians build ships for the Navy. Several thousand others build yachts, Mine Resistant Armored vehicles for the DoD.

      These guys happens to be Chinese. It's not the Chinese government. I appreciate the tidbit that this guy basically had to leave his fortune behind. I'm sure he has millions squirreled away around the world.

      I hope this idea in some form happens and the cars are built here. Between Tesla and start-ups like this, we could see a transformation of the industry. Or another Tucker-style failure. Hard to say, but glad to see paradigms are being broken in the industry.
      • 5 Years Ago
      So that's where all that money I used at Wal-mart went...
        • 5 Years Ago
        nrb:
        Oh it could be made in the US for $30 except as others pointed out the money isn't really in the manufacturing or the materials.
        For example, those electric space heater radiators you buy for $80 at Target/Walmart/etc. actually cost $5 to buy in China. I mean literally, for $5 you can buy the same thing in China-not wholesale or anything, I mean at full retail at a store. I have no idea what the wholesale cost is but it's gotta be lower than that.
        The cost comes from having to pay a (often American) shipping company to drag your heater across the pacific. Then you pay the longshoremen to drag the crate off the boat. Then you pay the truck driver to drive the box to Walmart's distribution center. Then you pay for the Walmart trucks to drive it to the store. Then there's the people who work at the store, the people who built the store, the people who work for the gas company that sold the gas needed to move all this, the people at the electric company that power the Walmart distribution center and store, and about a bazillion other people in between.
        Oh and let's not forget the brand name company based in the US that marked it up a bazillion percent. Or the advertising firm they paid for the shiny brand and ads that convince you to go buy it for $80.
        Which is why if you made it here for $30 by the time it got to the store it'd end up costing $90, since the cost would get multiplied up with every little step.
        Another thing you have to think about is unsold inventory-the store buys a ton of these things but in reality it's unlikely that they'll sell every single one at full price so a lot of the time they're relying on the few sales to cover the cost of making a lot of them. Meaning that if you made it in the USA and your product doesn't sell you just went bankrupt, whereas if you made it in China and you sell only half your inventory you might still have made a tidy profit.
        • 5 Years Ago
        Manufacturing in China is actually extremely low margin. The money is in the branding, not the product itself. You think Wal-Mart products are cheap? They are sold by the factories for a very small percentage of even that, most of the money end up in the Walton family.

        The whole China-relying-on-export assumption is a myth. Counting profit instead of revenue, export consists of less than 10% of its GDP, because the other 90+% are made by the foreign distributors with offices in China. Most of the money the Chinese get to keep were made domestically, which is not surprising, considering they have a market of 1.3 billion people and a rising middle class.

        Part of the reason is that the Chinese make so little is that they are absolutely terrible at advertising, marketing, and exterior design. The same product after being slapped on a brand is sold for ridiculously high margin. That's why even though Nike shoes are so cheap to make, their price tags are still not significantly lower compared to the old days.
        • 5 Years Ago
        Yep, boycot Wal mart.
        • 5 Years Ago
        "Manufacturing in China is actually extremely low margin."

        Somebody is making a mint off of it. There's no reason a three square foot pad for my dog needs to cost $30. It's a piece of foam, wrapped in cloth, and made in China. I refuse to believe it can't be made (profitably) here for that kind of money.
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