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Baldwin County, AL, Considers Hybrid Plant Plans

October 06, 2009

BAY MINETTE, AL --- Hybrid Kinetic Motors Corp. plans to seek written support from Baldwin County, Alabama, officials this week for the fledgling auto company's plans to build a major hybrid vehicle plant in the county. 

On Tuesday, Oct. 6, Baldwin County commissioners are expected to vote on whether to send a letter in support of HK Motors' plans to use 3,000 acres northeast of Bay Minette for a major hybrid vehicle production plant. Representatives from HK Motors were also scheduled to make a presentation before commissioners at 8:30 a.m. that day. 

The Baldwin County Economic Development Alliance holds purchase options on the privately owned property targeted for the plant. Though a letter of intent is nonbinding, Alliance President Robert Ingram said, if approved it will help attract more investors to the project. 

A report issued Oct. 1 by Far East Golden Resources, the Hong Kong-based parent company of HK Motors, concluded a total of $7.8 billion was needed for the automaker to become "the first company in the world that is completely dedicated to the mass production of multi-fuel (natural gas and gasoline) and electric-drive hybrid vehicles," the Press-Register reported. 

The costs to acquire the land and to design, construct and develop the manufacturing plant in Alabama will total at least $4.3 billion, and another $458 million will be necessary for design, research and vehicle development, the report added. Moreover, the report cited an additional $3.12 billion in costs for commercialization, administrative and general expenses, the Press-Register reported. 

Last month, the chairman of HK Motors, Benjamin Yeung, said the company expects to begin operations in 2013 and will create more than 5,000 jobs. In the first phase of production in 2012-14, HK Motors plans to build 300,000 vehicles annually. Production is expected to jump to 600,000 vehicles per year in 2015-16 and 1 million per year in 2017-18, HK Motors said. 

Not surprisingly, the company's ambitious plans have drawn considerable skepticism. 

David Cole, chairman of the Center for Automotive Research in Michigan, told the Press-Register that HK Motors' plans are unrealistic. "Three-hundred thousand vehicles in their first year? Not a chance. The technology is so immature. You don't start with high volume," he said. 

Cole added: "Over the past 100 years, there have been lots of people with delusions of grandeur. Only a small number have succeeded." 

The timing of HK Motors' plans has also perplexed auto industry experts. 

"Hybrid Kinetic talking about setting up a full-fledged, full-line auto company at the bottom of the second-worst recession in U.S. economic history," John O'Dell, senior editor for Edmunds', told the Associated Press. "It doesn't sound very promising to me." 

Nonetheless, the company's promises of job creation have captured the imagination of Alabama authorities. And the company's chairman has a fascinating, and mysterious, back story. 

A decade ago, HK Motors Chairman Benjamin Yeung went by a different name, Yang Rong, the Associated Press reported. He was a revered entrepreneur in China who founded minibus manufacturer Billiance China, the first Chinese company to be listed on Wall Street. In 2001, Forbes ranked Yang as China's third-richest business leader, with an estimated wealth of $840 million. 

But in 2002, the Chinese government accused him of economic crimes and he fled to the U.S. He became a U.S. citizen five years ago and now lives in Los Angeles with his family, AP reported. Whether China still considers him a fugitive is unclear. According to AP, there are conflicting reports about whether he has been cleared of the charges. 

In more recent years, Yeung has feuded with a former business partner, Xiaolin "Charles" Wang. After splitting with Yeung, Wang launched his own startup automaker, GreenTech Automotive, which hopes to build its own $6.5 billion auto plant in Tunica County, Miss. The two men had battled for control over Hybrid Kinetic in a lawsuit, which they finally settled in July.



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