Thursday, October 29, 2009
Electric cars – made in Monterey County – could roll off assembly lines by the end of this year, Salinas Mayor Dennis Donohue says.
Salinas is the first choice of fledgling electric carmaker Green Vehicles for its new assembly plant.
The city edged out high-tech meccas Menlo Park and Santa Clara, which also wooed the San Jose-based start-up.
Green Vehicles has already begun moving into the shuttered Firestone plant just south of the city.
It’s a homecoming for company CEO Ehab Youssef, a Salinas High grad whose father drove forklifts at the old tire and rubber factory for nearly a decade. The move is also a leap of faith, Donohue says, because the company still needs financing, which it expects to receive in the form of California Energy Commission grants and loans.
The city has pledged a $750,000 loan guarantee, Donohue says, provided the City Council gives its OK. The company would also receive massive tax breaks just for locating a plant in Salinas, because of the city’s designation as a state enterprise zone. Unless it’s wildly successful, Green Vehicles would pay no state taxes for years, says Andy Myrick, who runs Salinas’ enterprise zone program. And city officials have promised to expedite building permits as the company prepares for production.
In exchange for its largesse, the city can expect just a handful of jobs – the company plans to start with some 15 workers, and grow to include a crew of about 70 in three years. But the company’s real value, Donohue argues, is as a gateway to the fast-growing green technology business. “If you’re making winning technology here, it could lead to a whole host of opportunities,” he says, adding that two other tech companies have started conversations with the city since word of the Green Vehicles deal has spread.
Talks with the company began just three or four weeks ago, Donohue says, but for years the city has prepared the ground for electric cars, starting with the installation of a charging station at Rabobank’s Westridge branch.
Green Vehicles’ arrival in Salinas comes as the state and federal governments are opening their wallets as never before for green technology, with billions available for innovation.
Still, the city’s investment in the company is a gamble. Industry watchers disagree on whether a small player can compete with major carmakers.
At San Francisco-based research group Cleantech, Managing Director Dallas Kachan says: “Small companies don’t have the manufacturing expertise, service infrastructure or ability to drive [discounts in] the supply chain.”
But the Rocky Mountain Institute’s Matt Mattila says that the proliferation of government subsidies has recently given start-ups a chance to succeed. “You don’t have to be an established player to win,” he says.