Los Angeles Lures Chinese Auto Firm, BYD
By TAMARA AUDI - WSJ (email:
tammy.audi@wsj.com)
LOS ANGELES—City officials persuaded Chinese auto maker and technology company Co. to open its first U.S. headquarters here, as the company gears up for an expansion of renewable energy and the rollout of electric vehicles.
BYD, which is part-owned by Warren Buffett's MidAmerican Energy Holdings Co., plans this year to introduce its electric car, the e6, in China and in the U.S. One utility predicts that Southern California will have 400,000 electric cars by 2020.
BYD's other products include solar equipment and lithium-ion batteries. "California is the leading state for pursuing green energy," said BYD Senior Vice President Stella Li. "It has a multinational culture and it's easier for people to adapt to new stuff."
Getting the company to settle in Los Angeles took significant effort by the city. Austin Beutner, a former Wall Street executive who this year was named the city's chief economic officer, said that to entice BYD, Los Angeles agreed to purchase some of the company's electric vehicles and conduct a pilot test of some of its electric buses.
The city also agreed to streamline the approval process for installing electric charging stations in parking garages and established a policy that would put permits for home electric-vehicle charging stations on a fast track.
BYD will also benefit from a reduced tariff at the Port of Los Angeles for electric vehicles that come through the port. And a BYD electric vehicle will be displayed at Los Angeles International Airportto boost the company's profile in the U.S.
"We're bringing all our assets to bear," Mr. Beutner said. Los Angeles was stung recently when one of its last major corporations, Northrop Grumman Corp., decided to relocate to Virginia. Last year, Hilton Worldwide Inc. relocated to Washington, D.C., from Beverly Hills.
Los Angeles also is trying to counter long-standing complaints from business owners who say operating in the city is inefficient and expensive. The city faces a half-billion-dollar budget gap in its next fiscal year, hurt by a tax base that crumbled during the recession.
The value of the city's package offered to BYD totals around $1 million. Virginia used an incentive package valued between $12 million and $15 million to win Northrop Grumman's headquarters, the Virginia governor's office said this week.
The BYD office will employ about 50 people at first but is expected to expand to around 200 in several years. That is unlikely to compensate for the loss of the global headquarters of Northrop, a company with a market capitalization of more than $21 billion.
But Mr. Beutner saw BYD's decision as a signal that the city is still attractive for businesses. "We hope this sends a message to the market," he said.
BYD looked at a few other cities, including Portland, Ore., and Glendale, a suburb of Los Angeles. Ms. Li said BYD settled on Los Angeles in part because the city offered a high level of public exposure, crucial for company as it tries to raise its profile in the U.S. BYD will maintain existing offices in Schaumburg, Ill., San Diego and Cupertino, Calif.
The company is China's sixth-largest car brand by sales, according to J.D. Power. The company sold 480,000 cars in China last year and expects to sell 800,000 this year.
—Norihiko Shirouzu contributed to this article.
