Chinese Investment in Lancaster Reaches Milestone with E-Bus Plant

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    NEWSLETTERS

    The Antelope Valley city of Lancaster became the setting for a milestone in U.S.-China business relations: the first vehicle manufacturing plant established on U.S. soil by a Chinese company unveiled its first two completed electric buses intended for transit fleets. Gov. Brown joined the celebration amid optimism the plant's growth will create Southland jobs. Patrick Healy reports for the NBC4 News at 6 p.m. on Monday, April 28, 2014. (Published Monday, Apr 28, 2014)

    A former RV factory on the western edge of the Mojave Desert proved the perhaps unlikely location Monday to celebrate a local victory in the battle for foreign investment and job creation.

    "It's a small beginning, a few buses," said California Gov. Jerry Brown. "But like many things, it holds the promise of something very big."

    An American subsidiary of the Chinese BYD company showed off two completed battery powered buses, assembled in the Lancaster plant that opened last fall.

    Visitors given a tour inside saw two more buses nearing completition, the chassis of a third. The re-opened plant marks the first time a Chinese company has established a vehicle factory on U.S. soil, officials said. The current work force of 60 is projected to grow to 200 by the end of next year, said Stella Li, the chief executive officer of BYD Motors.

    BTW, BYD says the initials stand for "Build Your Dreams."  The company first made its mark developing and producing batteries for cellphones, and believes its batteries give it an edge over other E-bus manufacturers.

    The Lancaster milestone comes after a courtship that dates to 2008, and the road to this point has not been without bumps and controversies. But company officials see a bright future for their E-buses, and intend to market them aggressively to transit agencies across the country.

    The immediate benefit for the Antelope Valley is the creation of jobs to offset some of the 500 lost when the RV factory closed.

    "This isn't easy. I went to China five times. You cannot let them come to you. You have to go to them," said Lancaster Mayor Rex Parris, who credits Los Angeles County Supervisor Michael Antonovich for first putting him in touch with BYD.

    Lancaster's celebration, by coincidence, came the very day another LA County city, Torrance, learned one of Asia's first major U-S investors, Toyota of Japan, has been lured to Texas to relocate its North American headquarters. Texas Governor Rick Perry has openly solicited companies in California to relocate. "If I was Rick Perry, I would probably do the same thing," Parris said.

    In his remarks at the BYD plant, Brown did not mention Toyota or Texas, nor did he take questions before leaving.

    But he made a point of saying California offers companies more than other parts of the county.

    "Living in California is more expensive," the Governor acknowledged. "But you get so much with it and so many new things are happening, and this is one of them."

    Just last fall, BYD came under investigation by California's Department of Industrial Relations. A complaint that BYD paid some of its workers less than minimum wage could not be substantiated.

    But the company agreed to a settlement for paying some of its temporary workers from China in Chinese currency, instead of US dollars.

    "I think any startup company experiences some bumps as they learn the ropes of local regulations. California certainly has their unique set of labor regulations," said Michael Austin, vice president of BYD America. BYD had previously faced criticism for its labor policies by the Los Angeles Alliance for a New Economy.

    "We hope they've learned their lesson," said LAANE's Rachelle Huennekens.

    The Antelope Valley Transit Authority is scheduled to take delivery next week of the first two 40-foot buses from the Lancaster plant. The Los Angeles Metropolitan Transit District has committed to buy five buses, with an option for 20 more.

    BYD remains hopeful of winning a contract to provide Long Beach with 10 electric buses, a contract that was close to being finalized when the process was ordered re-opened. Apart from the selling point of zero pollution, battery powered buses offer lower operating expenses, though the initial purchase price is higher.

    A diesel powered transit bus can be purchased for around $300,000. BYD's 40-foot electric buses start at $650,000. But its operating costs are so much lower, that the break even point can come as early as two and a half years, and over a 12 year span, the electric bus can save as much $400,000, Austin said.

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