Proposed S.C. Electric Car Plant Short Circuits, Despite Handout Offers

October 17, 2011

Investigative Reports

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The NerveIn July 2009, CT&T, a South Korean electric vehicle manufacturer, announced that it would launch production in the United States, with plans to employ 2,600 workers over five years.

South Carolina was chosen as one of the Seoul-based company’s first production states; and in July 2010, a press conference was held with then-Gov. Mark Sanford and others at the State House to announce plans for a $21 million assembly plant in Spartanburg County.

Although it wasn’t publicly revealed then, the state had already approved incentives for the company, an S.C. commerce official recently informed The Nerve.

Over a five-year period, 370 workers would be hired at the proposed Duncan plant to annually assemble thousands of CT&T’s flagship “c-Zone” and “e-Zone” electric vehicles, state and company officials said at the time.

The vehicles would be produced through a joint venture -collectively known at CT&T Southeast -between CT&T and a Duncan-based, automotive technology company, the 2AM Group.

CT&T’s golf-cart-size cars run at top speeds of 25 mph and 60 mph for the c-Zone and e-Zone models, respectively; and travel up to 50 miles or 100 miles between charges, depending on the battery type, according to media reports.

Sanford at the State House press conference thanked the company for “unleashing … a green technology revolution,” according to a (Spartanburg) Herald-Journal story. Several of CT&T’s vehicles were on display during the announcement.

“We as an American population or citizenry are going to have to understand that there’s going to be a paradigm change in the way we look at transportation in the future,” Joe White, a CT&T executive in Greenville, was quoted at the time.

White credited Sanford with helping to convince the company to locate in South Carolina, noting that the governor visited the Detroit Auto Show in January 2010 when CT&T’s vehicles were showcased.

An S.C. Department of Commerce press release described CT&T, founded in 2002 and led by a former Hyundai Motor Corp. executive, as an “acknowledged global leader in electric vehicles.”

But 15 months after the big-splash announcement at the state capitol, not a single CT&T car has been produced in the Palmetto State – or apparently anywhere else in the country, for that matter.

“It’s pretty much dormant,” Carter Smith, executive vice president of the Spartanburg Area Chamber of Commerce’s Economic Futures Group, said about the proposed South Carolina plant when contacted last week by The Nerve. “We haven’t had any recent contact from the company.”

Smith said he last spoke with White sometime in the first half of this year and was informed then that the project had been delayed, though he added that White didn’t say the project was dead.

Asked about the reason for CT&T’s change of plans, Smith replied: “I think it was just the overall economic conditions at the time. We’re hoping that the project will regenerate some action as overall economic conditions improve.”

Contacted last week, White told The Nerve that he was the chief executive officer of CT&T USA, a brand that he noted was “absorbed” into CT&T United – the American subsidiary of the South Korean parent company – after the South Carolina project was announced.

White declined, though, to comment on the absence of activity by CT&T in South Carolina, referring questions to a company marketing representative in Los Angeles, who didn’t return phone messages left last week by The Nerve.

“I’m kind of one step removed,” White said.

The Nerve last week also left a phone message for Nelson Marchioli, Spartanburg County’s interim administrator, but did not receive a response.

As of last week, CT&T United’s website was listed as “currently in construction”; and a company phone number had been disconnected.

The Nerve on May 7 submitted a request under the S.C. Freedom of Information Act to the state Department of Commerce for a copy of the state incentives agreement with CT&T.

In a June 1 written response, Commerce’s chief attorney, Karen Manning, said the state Coordinating Council for Economic Development, made up of the heads of Commerce and other state agencies involved with economic development, approved job development credits for the joint-venture company on June 29, 2010 – two days before the State House press conference announcing the project.

But Manning at the time declined to release the incentives agreement to The Nerve, saying that it had not been finalized. Then, in a Sept. 14 letter, Manning informed The Nerve that the joint-venture company had “withdrawn its application for job development credits,” though she didn’t provide an explanation.

Manning did not respond to follow-up written questions last week from The Nerve, including the potential taxpayer cost of the job development credits and whether other incentives were offered to the company.

Smith said Spartanburg County was willing to offer the company a fee-in-lieu-of-taxes (FILOT) agreement, though he added that CT&T received no up-front incentives.

“They would have to have the project in place to qualify for anything,” he said.

Still, Smith said he believes local officials would be “very open to have continuing discussions with them” concerning incentives should the project become active again.

As it turned out, though, the offer of incentives wasn’t enough to keep the company in South Carolina.

And CT&T also apparently has dropped out of sight in several other states.

Mark McGuffie, managing director of a nonprofit economic development organization known as Enterprise Honolulu, the Oahu Economic Development Board, told The Nerve last week that CT&T in May 2010 publicly signed a “memorandum of understanding” at the state capitol in Honolulu that it would locate an assembly plant somewhere in Hawaii, employing an estimated 100 to 300 workers, depending on production levels.

But the company never came, McGuffie said.

“They had loftier goals than what was doable in our state,” he said.

Unlike South Carolina, the state of Hawaii didn’t initially offer or promise any incentives to CT&T, McGuffie said, though he added that “if there were a concrete commitment … I’m assuming the state would have assisted them.”

McGuffie, who noted that he was actively involved with CT&T’s announcement to come to Hawaii, said it was his understanding that the South Korean company, which recently went public, has abandoned its plans for now for any U.S. operations.

“North America was sort of shrunk – it’s not on their radar,” he said, adding that as of several months ago, the company’s stock value on the Korean stock exchange had “almost dwindled to nothing.”

The Associated Press reported in June that besides Hawaii and South Carolina, CT&T had stalled plans to locate assembly plants in Pennsylvania. The Nerve last week attempted to get an update on the Pennsylvania situation from that state’s Department of Community and Economic Development, but was not provided with any information before publication of this story.

McGuffie said CT&T participated in an energy conference in Honolulu in September 2010 during which it gave away one of its electric cars to a private citizen. At the July 2010 announcement at the S.C. State House, the company donated one of its cars to the state Bureau of Protective Services.

The tiny vehicle can be seen today patrolling the State House grounds. If CT&T never returns to the Palmetto State, it could be a collector’s item someday.

Reach Brundrett at (803) 254-4411 or rick@thenerve.org.