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.
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.”
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 firstname.lastname@example.org or at (571) 319-9824. @Kenricward
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