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Inside, execs knew McAuliffe plan had ‘substantial risk’

By   /   May 6, 2013  /   No Comments

Part 18 of 73 in the series Terry McAuliffe - Carmogul
ROLLING OUT: GreenTech Automotive employees wait for unveiling ceremony of new electric MyCar at facility in Horn Lake, Miss., last July. (AP Photo/Rogelio V. Solis)

ROLLING OUT: GreenTech Automotive employees wait for unveiling ceremony of new electric MyCar at facility in Horn Lake, Miss., last July. (AP Photo/Rogelio V. Solis)

By Kenric Ward | Watchdog.org Virginia Bureau

RICHMOND — Terry McAuliffe’s electric-car company had big plans: Hire 25,000 workers, build up to 1 million vehicles a year and post annual revenue of up to $33 billion.

Those were the numbers that GreenTech Automotive laid out in its business plan in 2009 and 2010.

But other internal documents reviewed by Watchdog.org outlined a less rosy scenario. They repeatedly warned that GreenTech’s business path could turn into a dead end.

Still, McAuliffe kept banging the drum. Last year, during the marketing rollout of a few slow-speed vehicles in Mississippi, McAuliffe, who now says he resigned as chairman on Dec. 1, enthused, “This was a company in China making cars. We bought it and moved to America. These are all U.S.-made jobs.”

While McAuliffe touted his green-energy project as the wave of the future, the company that raises foreign capital for GreenTech through the federal EB-5 visa-investor program, was more circumspect.

In a 2009 private placement memorandum from Gulf Coast Funds Management, the fund-raising arm of GreenTech, officials acknowledged a high degree of investor risk.

“GreenTech is a new company that has a challenging business plan to execute, beginning with the difficult task of raising between $2 billion and $10 billion in investment capital,” stated the document.

“An investment in GreenTech Automotive involves substantial financial risk.”

The company’s offering was labeled by GCFM as “highly speculative.”

McAuliffe last week admitted, “It’s been hard.”

In an interview on NBC-12 in Richmond, the Democratic gubernatorial candidate noted, “We can only say what the engineers tell us to say. But, you know, sometimes they don’t get it right, but that’s OK.”

SEE NBC-12 VIDEO HERE

GreenTech sued Watchdog last month, alleging that its news coverage defamed the company and scared off potential investors. GTA has declined to make available for comment anyone from the company. The company’s outside counsel has not responded to multiple inquiries.

GTA, which initially announced plans to produce 150,000 vehicles in 2012 and 400,000 this year, is far behind schedule. Instead of operating at its yet-to-be-built multimillion-dollar plant in Tunica County, Miss., GreenTech occupies a smaller leased building at Horn Lake, 30 miles away in neighboring DeSoto County.

Fewer than 100 employees and still fewer cars are at that facility.

Marianne McInerney, a vice president for GreenTech, told the Washington Post last month the company expects to distribute 30,000 cars during the next three years. McInerney would not say how many have been produced, but recent reports indicate that the company has scaled back its initial production numbers.

McAuliffe acknowledged to NBC reporter Ryan Nobles last week that the progress of GreenTech — of which McAuliffe calls himself “a shareholder and a founder” — is lagging the predictions he made three years ago.

“I relied on, my folks relied on engineers who thought these lithium batteries — they are very complicated. As I say, only a handful people in the world have done what we are trying to do: to build an electric vehicle, to be able for the masses who can buy a car that’s affordable.

“Maybe our engineers thought they could get the lithium battery done faster, we could only convey what our engineers say,” he said.

“We’ve got a long ways to go, we’ll see where it goes.”

Kenric Ward is a national reporter for Watchdog.org and chief of the Virginia Bureau. Contact him at kenric@watchdogvirginia.org or at (571) 319-9824. @Kenricward

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Part of 73 in the series Terry McAuliffe - Carmogul
  1. VA: As he runs for governor, McAuliffe wheels and deals electric cars in Mississippi
  2. VA: Media echo Watchdog exclusive on McAuliffe’s electric car maneuvers
  3. No news here: PolitFact brands Terry McAuliffe’s electric-car claim ‘false’
  4. Experts question source of McAuliffe car-company funding
  5. Terry McAuliffe on business ventures: ‘Some work, some don’t’
  6. How McAuliffe’s car company failed the Virginia test, landed in Mississippi
  7. Virginia official wants probe of McAuliffe company ‘visa-for-sale’ program
  8. McAuliffe car company sues Watchdog in libel claim
  9. Barack Obama’s GreenTech connection: Rick Wade
  10. Silence, secrecy, cops follow GreenTech’s China deal
  11. McAuliffe hones China’s crony-capitalism model in U.S.
  12. Promises keep Tunica County afloat
  13. McAuliffe company’s China hook-up: Will it work?
  14. McAuliffe car lags in Domino’s delivery
  15. McAuliffe car co. parent in off-shore tax shelter
  16. Lawmaker gives feds one more week for EB-5 answers
  17. Bolling: McAuliffe’s Mississippi package ‘attractive’
  18. Inside, execs knew McAuliffe plan had ‘substantial risk’
  19. Union darling McAuliffe and his non-union car company
  20. Did Clinton aid the birth of ‘McAuliffe’ car company?
  21. McAuliffe feels heat over GreenTech resignation
  22. TV report: One year later, ‘party is over’ at GreenTech
  23. Months after he said he left company, McAuliffe kept talking GreenTech
  24. Clinton connection: More money for McAuliffe
  25. Terry McAuliffe used loophole to avoid key SEC oversight of his car company
  26. VA officials: McAuliffe green car more politics than biz
  27. McAuliffe car company announces it’s ready to roll — again
  28. Before Watchdog, McAuliffe blamed federal officials for money trouble
  29. McAuliffe gets cash from GreenTech exec, board members
  30. Watchdog report on McAuliffe spurs FOI request to Homeland Security
  31. McAuliffe leaves GreenTech questions hanging at debate
  32. Totally wired: McAuliffe went to Napolitano to expedite company funding
  33. McAuliffe bragged about GreenTech’s cash position while begging feds for faster processing of ‘cash for visas’
  34. Investigation targets Homeland official’s relationship to McAuliffe company
  35. Even before news of federal probe, McAuliffe ducked GreenTech questions
  36. McAuliffe company pressed Homeland official on 81 investor visas
  37. Rodham company sought visa for controversial Chinese exec
  38. Immigration official says he met with McAuliffe to discuss visas for foreign investors
  39. Whiners: Mayorkas says Gulf Coast ‘continues to complain’
  40. VIDEO: Ex-GreenTech employee says little happened at Horn Lake plant
  41. Online ad to Terry McAuliffe: Drop your lawsuit
  42. National security on ‘hold’: Lawmakers press McAuliffe for answers
  43. Citizens United documentary film delves into McAuliffe, GreenTech
  44. VIDEO: Terry McAuliffe’s 15 million-square-foot car plant … in China
  45. Feds call McAuliffe car company’s use of investment program ‘possible fraud’
  46. GreenTech courted Obama’s Solyndra aide
  47. GOP legislators call for McAuliffe to answer GreenTech questions
  48. McAuliffe ‘desperate’ over documentary, Citizens United says
  49. GreenTech weighed Fisker-style federal loan
  50. Group tells Terry: Follow ‘McAuliffe Standard’ on disclosure
  51. Car and Driver races into GreenTech controversy
  52. Congressman: McAuliffe owes Virginians explanation about White House meeting
  53. Feds loosen oversight as McAuliffe car company makes mysterious management change
  54. GreenTech execs use Times and ABC to throw McAuliffe under the (non-electric) bus
  55. Aide in union contribution swap hosts California fund-raiser for McAuliffe
  56. Despite denials, docs show McAuliffe company asked feds to fast-track visa for investor tied to spy list
  57. Former Democrat Party director was on GreenTech payroll
  58. More bad news for McAuliffe car company as GreenTech China venture stalls
  59. Clinton Foundation posts deficits on McAuliffe’s watch
  60. VIDEO: GreenTech record dogs McAuliffe at energy forum
  61. Auto industry expert labels McAuliffe electric car ‘preposterous’
  62. Democratic leaders have their own Bain pain in Mideast private equity deal
  63. Hillary PAC adviser served as GreenTech spokeswoman
  64. New emails add evidence McAuliffe pressed U.S. officials to approve GreenTech funding
  65. After endorsement, Post shrinks facts to cover Terry McAuliffe
  66. Ties that bind: Following the McAuliffe-Clinton money trail
  67. McAuliffe tilts at windmills; Chinese venture goes bust
  68. Federal investigations cast shadow over McAuliffe on Election Day
  69. DHS inspector over GreenTech-McAuliffe case is under investigation
  70. McAuliffe names former GreenTech employee secretary of commonwealth
  71. McAuliffe lawyers, accountants sort GreenTech stock amid federal investigations
  72. Nuking filibusters, Dems clear way for Mayorkas at Homeland Security
  73. U.S. judge hands Watchdog a victory over VA governor’s green-car company

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Kenric Ward is a veteran journalist who has worked on three Pulitzer Prize-winning newspapers. A California native, he received a BA from UCLA (Political Science/Phi Beta Kappa) and holds an MBA. He reported and edited at the San Jose Mercury News and the Las Vegas Sun before joining Watchdog.org in 2012 as Virginia Bureau Chief.