Obama Commerce Nominee Entangled with Chinese Business
John Bryson sits on the board of troubled electric car manufacturer Coda, which is waist-deep in Chinese investment and debt.
June 2, 2011 - 12:00 am
John Bryson, President Barack Obama’s nominee for commerce secretary, may be best known as co-founder of the radical activist group Natural Resources Defense Council and as CEO of Edison International, parent company of giant electric utility Southern California Edison. But one of his biggest obstacles to Senate confirmation may be his relationship with troubled Chinese-backed electric car company Coda Automotive.
Bryson has been a vocal advocate for Coda since 2008. He sits on the firm’s board of directors and is reportedly an investor, and he is an evangelist for the company. Bryson has said: “This is the only board I actually enjoy since I’ve left Edison.” In March of last year at the University of Berkeley Energy Symposium, he singled out Coda by name as an inspiring model for a new technology company.
Many automobile analysts have asked if Coda’s car will be an American or Chinese car. While Coda executives say it will be an American vehicle, the company has forged deep relations with Chinese federal authorities, Chinese state banks, and state-owned manufacturing companies.
This association is at odds with the mission of the American secretary of commerce. His role is to build American companies that can compete with foreign competition, not to send jobs overseas.
Bryson is not shy about Coda being heavily underwritten by the Chinese government, to the tune of $500 million. This is more than twice the U.S. private investment, reportedly $201 million. He told the audience at Berkeley:
[Coda is] working with the advanced battery development arm of the Chinese federal government [and] they’ve contributed in a big way.
Despite many glowing Bryson predictions of success, Coda has been plagued by numerous problems. Over the last four years it has delayed the launch of its all-electric car at least three times, and with at least three different models. It is now tentatively scheduled for Fall 2011. Last November, the company’s charismatic CEO abruptly resigned. It’s vice president for global sales also has resigned. The company has privately raised only $76 million of a promised $125 million.
Coda aggressively sought a piece of a $2.4 billion federal stimulus grant, but so far has not been awarded it. It has courted the U.S. Department of Energy for low-interest loans, and hopes for as much as $400 million, but it has yet to seal that deal.
And many auto analysts gasp at the car’s price tag of $45,000, more expensive than the Nissan Leaf and the Chevy Volt.
Coda’s bumpy road may not play well for Bryson’s candidacy, as he has linked himself to the firm’s fortunes. He personally sat in on private VC fundraising sessions, and reportedly is an investor in the company as well. The company asserts that it will have 50,000 all-electric cars on the road by 2015, though it has yet to produce a single vehicle and auto analysts are skeptical of the claims. The company is betting that California state and federal subsidies will reduce the price tag by $12,500 for consumers (it will only be available in Hawaii and California).
President Obama said of Bryson:
John will be an important part of my economic team, working with the business community, fostering growth, and helping open up new markets abroad to promote jobs and opportunities here at home.
So far Coda has employed countless Chinese and is financially beholden to Chinese government interests. And as a harbinger of things to come for the company, the company’s new CEO comes directly from GM Shanghai and Shanghai Automotive Industries Corp., one of China’s biggest domestic automakers.
Coda also has filled its board with many political figures in the hope that it can secure U.S. federal and state subsidies — which it has not been able to do in the private sector.