Why Did Youngkin Spurn a $3.5 Billion Investment?

The Berry Hill mega-site in Pittsylvania County — still waiting for a mega-investment

by James A. Bacon

When you nix what might have been a $3.5 billion investment creating a reported 2,500 jobs in one of Virginia’s most depressed regions, you’d better have a good explanation. But when mammoth economic development deals are wrapped in secrecy backed by non-disclosure agreements, it’s difficult providing that explanation.

That’s the pickle Governor Glenn Youngkin finds himself in following his decision to halt discussions with Ford Motor Co. to build a battery plant in Pittsylvania County. The Governor scuttled Virginia’s bid for the project upon learning that Ford’s partner would be China-based Contemporary Amperex Technology Co., the world’s largest maker of electric vehicle batteries — and what the administration calls a “front for the Chinese Communist Party.”

Not surprisingly, Democrats are criticizing Youngkin, who is contemplating a national run for president, for putting national politics before economic development in Southside Virginia. Sen. Scott Surovell, D- Fairfax, told the Richmond Times-Dispatch: “To deny [people in the community] jobs because you’re in last place in Republican presidential primaries [is] gubernatorial malpractice.”

The Youngkin administration’s response was weaker than it could have been. Reports the RTD:

Youngkin spokeswoman Macaulay Porter said in an email for this story: “While Ford is an iconic American company, it became clear that this proposal would serve as a front for the Chinese Communist party, which could compromise our economic security and Virginians’ personal privacy.

“Virginians can be confident that companies with known ties to the Chinese Communist Party won’t receive a leg up from the Commonwealth’s economic incentive packages. When the potentially damaging effects of the deal were realized, the plant proposal never reached a final discussion stage.”

It would be helpful to disinterested observers not intent upon either bashing Youngkin or apologizing for him to know how the Ford-Contemporary Amperex partnership would compromise economic security and Virginians’ personal privacy. It is not self-evident why either would be the case. “Trust me” doesn’t work in today’s society. No one trusts anyone on the other side of the political divide anymore.

But there’s that pesky non-disclosure thing. Presumably, Youngkin can’t explain his thinking because that would entail revealing proprietary details about the technology and/or the business relationship between Ford and the Chinese company.

If anyone doubts that China’s industrial policy consists of systematically plundering American technology through means fair and foul, I suggest reading Shaomin Li’s book, “The Rise of China, Inc.” Li, an Old Dominion University professor, details China’s rise to technological leadership through cyber-theft and industrial espionage, mandating technology transfer as a condition for entry into the Chinese market, and forming joint-venture partnerships and acquisitions of American companies. 

It could be argued that Ford is a big-boy company, it knows what it’s getting into, and it’s not the business of state governments to second-guess the risks that its proprietary technology might be pilfered. Maybe Youngkin knows something we don’t. Maybe he doesn’t. Due to the non-disclosure requirements, we’ll probably never know.

For that matter, we’ll never know if Virginia would have snagged the project — it was far from a done deal, and Ford was likely pitting state against state to get the biggest tax breaks and subsidies it could. Nor can we now know, as Duane Yancey at Cardinal News points out, if Virginia might yet attract another giant investment to the Pittsylvania County mega-site that’s even bigger and better than Ford.


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51 responses to “Why Did Youngkin Spurn a $3.5 Billion Investment?”

  1. Stephen Haner Avatar
    Stephen Haner

    It would be interesting to know if DeSantis in Florida or Abbott in Texas have similar concerns. Both states are other likely locations and aggressive recruiters. If having the plant somewhere in the U.S. is a threat to national security, having it anywhere in the U.S. would be.

    1. Excellent point.

    2. Nancy Naive Avatar
      Nancy Naive

      If you’re going to court disaster, at least get something for it. Don’t sign away the story rights to a third party.

    3. Exactly!

  2. Eric the half a troll Avatar
    Eric the half a troll

    Hmmmm… might it have something to do with the old Conservative renewable energy transition boogieman and Youngkin playing to his base…?? This block of his checks a lot of boxes with that crowd…

    1. Stephen Haner Avatar
      Stephen Haner

      But he’s all in on wind. So probably not. Hey, EV’s are going to become dominant for many uses, I do not doubt. Which is why mandating them is silly.

    2. Virginia Gentleman Avatar
      Virginia Gentleman

      And if the Governor’s last name was Northam, you can count on the BR blasting this decision and suggesting that it somehow was woke-ism gone too far.

      1. More raw speculation born of partisan bile.

      2. Stephen Haner Avatar
        Stephen Haner

        So you are giving CREDIT to Jim for raising the issue, VG, and not just saluting the Guv’s move. How fair of you!

        1. Virginia Gentleman Avatar
          Virginia Gentleman

          Fair comment … We should give credit to Jim for raising the issue.

      3. Stephen Haner Avatar
        Stephen Haner

        So you are giving CREDIT to Jim for raising the issue, VG, and not just saluting the Guv’s move. How fair of you!

    3. Might Youngkin’s decision have “checked off” boxes with the anti-renewable crowd?

      Conservatives have been worried about Chinese theft of American technology for many years. Are those fears always justified? Perhaps not always. But you have nothing but pure speculation and partisan prejudice for attributing any motive other that the one Youngkin provided…. especially given that Youngkin supports an all-of-the-above energy policy.

      1. DJRippert Avatar

        Nobody serious opposes electric vehicles. Gas powered cars and trucks pollute in many ways, not just CO2. Many serious people oppose creating too much energy from renewable sources like wind and solar too fast (and at too high a price).

      2. Eric the half a troll Avatar
        Eric the half a troll

        …And is catching a lot of flack on your blogs because of his support…. But are you really criticizing me for speculating… such is the mainstay here. There is really nothing more in my speculation than in yours “maybe Youngkin knows something we don’t…” and this whopper at the end… “Virginia might yet attract another giant investment to the Pittsylvania County mega-site that’s even bigger and better than Ford.”. Lots of “mights” and “maybes” there…

      3. Eric the half a troll Avatar
        Eric the half a troll

        Btw, the #1 Virginia GOP initiative… kill the Clean Cars Act… Sure Youngkin is definitely not playing to his base here…
        https://uploads.disquscdn.com/images/9e5f664ce8b70dcd7fe6ba6d1a38688a6ae817e2159618ebf7c41b8e4ae0e543.jpg

        1. That’s all well and good, except buying an new car is not an investment, it is an expense.

  3. Anyone remember Greentech? Mississippi put up $4.9 million for 350 jobs that, except for a handful, didn’t happen.

    How about McAuliffe and Lindenberg in Virginia? “The state lost $1.4 million of an investment in the Chinese company that
    was supposed to take over a factory in Appomattox, bringing more than 300 new jobs.”
    https://www.wsls.com/news/2016/01/30/mcauliffe-says-lindenburg-failure-needs-to-be-taken-in-perspective/

    1. DJRippert Avatar

      Even Amazon’s HQ2 is facing a lot of questions.

      https://www.protocol.com/amazon-headquarters-arlington-office-space

  4. The statement, “Ford’s partner would be China-based Contemporary Amperex Technology Co., the world’s largest maker of electric vehicle batteries — and what the administration calls a “front for the Chinese Communist Party.””is incorrect.
    By Chinese law every Chinese company is owned by the CCP and PLA [China’s military]. CAT is NOT a front — it is the government.

    Additionally, all Chinese citizens are required to report/provide any/all information about any company, institute, individual that citizen interacts with on a daily basis.

    Also — all foreign companies doing business in China or with a Chinese ‘company’ is required to provide and share that foreign company’s trade secrets with the CCP/PLA.

    Finally, the CCP uses its investment properties in the US to collect intelligence on any and all things in the US: people, companies, government installations, etc.

    I believe Texas did pass a law which in effect prevented a Chinese ‘company’ headed by a ‘retired’ PLA officer from buying a large tract of land near a US military base. The same threat is emerging in Grand Forks, ND where the ChiComms are trying to buy property near the USAF base used for UAV development and training…. hmm…… just because you’re paranoid doesn’t mean they aren’t out to get you!

  5. The statement, “Ford’s partner would be China-based Contemporary Amperex Technology Co., the world’s largest maker of electric vehicle batteries — and what the administration calls a “front for the Chinese Communist Party.””is incorrect.
    By Chinese law every Chinese company is owned by the CCP and PLA [China’s military]. CAT is NOT a front — it is the government.

    Additionally, all Chinese citizens are required to report/provide any/all information about any company, institute, individual that citizen interacts with on a daily basis.

    Also — all foreign companies doing business in China or with a Chinese ‘company’ is required to provide and share that foreign company’s trade secrets with the CCP/PLA.

    Finally, the CCP uses its investment properties in the US to collect intelligence on any and all things in the US: people, companies, government installations, etc.

    I believe Texas did pass a law which in effect prevented a Chinese ‘company’ headed by a ‘retired’ PLA officer from buying a large tract of land near a US military base. The same threat is emerging in Grand Forks, ND where the ChiComms are trying to buy property near the USAF base used for UAV development and training…. hmm…… just because you’re paranoid doesn’t mean they aren’t out to get you!

  6. Nancy Naive Avatar
    Nancy Naive

    American Companies You Didn’t Know Were Owned By Chinese Investors

    AMC. Popular cinema company AMC, short for American Multi-Cinema, has been around for over a century and is headquartered in Leawood, KS. …

    General Motors. …

    Spotify. …

    Snapchat. …

    Hilton Hotels. …

    General Electric Appliance Division. ..

    https://www.madeinamerica.com/chinese-investors/

    1. but MOST IMPORTANT to BRers…. Smithfield!!!!

      1. Nancy Naive Avatar
        Nancy Naive

        熏肉

        1. We should never have allowed the Chinese to steal our bacon makin’ technology…

  7. Lefty665 Avatar

    OTOH, where better to stick the Chinese than Pittsylvania County? It’s isolated from anything strategic. It’s on that long rough road from Lynchburg to Danville memorialized in the song “Wreck of the old 97”. Take the investment and jobs and let the Chinese steal the secrets of making whisky and growing pot. What’s not to like?

  8. f/k/a_tmtfairfax Avatar
    f/k/a_tmtfairfax

    Interestingly, Congress appropriated $1.9 billion in 2020 to fund the FCC’s “rip and replace” program that would remove and replace Huawei and ZTE equipment in rural markets because of national security concerns. Last summer, FCC chairwoman Jessica Rosenworcel wrote Senator Cantwell, requesting a further appropriation of $3.8 billion to cover all of the costs.

    Would national security agencies vouch for Contemporary Amperex Technology Co.’s not having any ties to the CPC or its alter ego the Chinese government? Would the White House and Congress agree there are no ties? How much do they know about Contemporary Amperex Technology Co.?

    The FCC also revoked U.S. operating authority for China Telecom Americas, China Unicom Americas, Pacific Networks, and ComNet and China Unicom Americas. In 2022, Rosenworcel said “Last year, I established the National Security Policy Committee, a dedicated, cross-bureau team of experts advancing a comprehensive approach to security matters at the FCC. The work they’ve done in the last year is thoughtful and impressive—and there’s more to come.” Is Contemporary Amperex Technology Co. “clean”?

  9. LarrytheG Avatar

    Assuming Youngkin has legitimate concerns , and the various ways this could have been handled, a very public rejection of FORD (and even China) could have longer term consequences, not only FORD, China but other companies including perhaps Volvo making electric trucks in Va and wondering what to do in the future.

    Politically, the hard-liners will probably like this but I wonder how many votes it might cost him, even in the business community. Thinks of ANY company that deals
    with Chinese products, like perhaps solar.

    Not a good look.

    1. Just about every solar collector sold in the US these days was made in China. Yes, they have achieved tremendous efficiencies of scale and brought the cost way down — which is why solar energy, when the sun shines and it’s available, is so cheap, and why we have far from saturated the potential for solar generation in this country. But the market for those collectors is huge world-wide — especially in Europe and other places where fossil fuels sell at a premium — and meanwhile, we simply aren’t players in the world-wide solar business at all. We’re not even players domestically.

      Electric vehicles need batteries; but so does the Grid when there’s a larger amount of solar generating capacity. Why shouldn’t we be involved and start ramping up our own participation in this huge world market — from Pittsylvania County or anywhere else — even if there is Chinese involvement? It’s not like we haven’t confronted Chinese theft of intellectual property through business partnerships before. Meanwhile the risk of solar collectors spying on our phone calls is remote — unlike with Huawei.

    2. Just about every solar collector sold in the US these days was made in China. Yes, they have achieved tremendous efficiencies of scale and brought the cost way down — which is why solar energy, when the sun shines and it’s available, is so cheap, and why we have far from saturated the potential for solar generation in this country. But the market for those collectors is huge world-wide — especially in Europe and other places where fossil fuels sell at a premium — and meanwhile, we simply aren’t players in the world-wide solar business at all. We’re not even players domestically.

      Electric vehicles need batteries; but so does the Grid when there’s a larger amount of solar generating capacity. Why shouldn’t we be involved and start ramping up our own participation in this huge world market — from Pittsylvania County or anywhere else — even if there is Chinese involvement? It’s not like we haven’t confronted Chinese theft of intellectual property through business partnerships before. Meanwhile the risk of solar collectors spying on our phone calls is remote — unlike with Huawei.

      1. how_it_works Avatar
        how_it_works

        As far as I know, in order to qualify for the solar tax credit, the equipment including solar panels MUST be made in the USA, and there are several manufacturers who make them in the USA.

        1. Have to define “make.” “Assemble” is more like it.

      2. energyNOW_Fan Avatar
        energyNOW_Fan

        And the amount of pollution to make the solar cells in China is probably huge. Many Americans feel even 99.9% pollution control is murderous, so it much more ethical to rely on China to shoulder that burden, right ? As long as NIMBY is observed, we are A-OK with it.

  10. Nancy Naive Avatar
    Nancy Naive

    “ Later this year along the banks of the James River outside Richmond, Virginia, a paper products maker based in northeastern China will begin construction on a new U.S. manufacturing plant. The factory will churn the region’s straw and corn stalks into household products including napkins, tissue and organic fertilizer—all marked “Made in the USA.”

    Shandong Tranlin Paper’s new U.S. factory is forecast to generate about 2,000 new jobs by 2020, and is the latest Chinese company to invest in American manufacturing.”

    Chinese foreign direct investment in the U.S. totaled $12 billion last year, topping $10 billion for the second year in a row, according to the Rhodium Group, which tracks Chinese money flows into the U.S. It was three years ago in 2012, when—for the first time ever—Chinese foreign investment in America lapped investment flows in the other direction to China”

    https://www.cnbc.com/2015/02/05/the-rise-of-made-by-china-in-america.html

    Apparently, short memories in the Old Dumbonion. We got ripped.

    JAB, hopefully you wrote this on your old Dell, and not a Lenova laptop.

    1. Oops! Oct. 27, 2017
      Tranlin fails to repay state $5 million
      https://www.chesterfieldobserver.com/articles/tranlin-fails-to-repay-state-5-million/
      Follow up to:
      Tranlin to return $5M, paper mill put on hold Chesterfield Observer August 30, 2017
      PETER GALUSZKA CONTRIBUTING WRITER
      Tranlin’s planned $2 billion paper mill in eastern Chesterfield has been put on hold as the company incorporates new technology into manufacturing plans.After a series of delays, Tranlin Inc. has agreed to repay the state $5 million in economic incentives while the company recalibrates a much-anticipated, $2 billion paper mill in eastern Chesterfield.

      The company, however, said it remains committed to building the plant and is working with state officials on a new incentive plan.

      Lisa Randall, a spokesperson for the Chinese paper manufacturer, did not give a specific date for when the new plan would be in place, saying it would only be “at a later date.”
      https://www.chesterfieldobserver.com/articles/tranlin-to-return-5m-paper-mill-put-on-hold/

      Also: https://www.baconsrebellion.com/happened-jerry-peng-questions-tranlin-inc/

      1. Nancy Naive Avatar
        Nancy Naive

        Did we really ever get the $5M. Every article I keep pulling up says “will repay $4.85 plus interest.”

        1. Couldn’t find that they did. See edit above.

          1. Nancy Naive Avatar
            Nancy Naive

            Meh, what’s $5M between friends? Maybe the PRC will pick up the check for the next state dinner?

          2. Nancy Naive Avatar
            Nancy Naive

            Meh, what’s $5M between friends? Maybe the PRC will pick up the check for the next state dinner?

  11. walter smith Avatar
    walter smith

    I’m against the government buying jobs. I would prefer the best business environment and the best tax environment and the best regulatory environment, then get out of the way.
    The government projects never turn out as flaunted. Main Street Station? anyone?
    I don’t believe the climate religion. I don’t believe the electric car scam. The batteries are pretty intensive to make electricity and resource wise. I think the (bad) Dominion windmill bet is more than enough for taxpayers.

    1. Stephen Haner Avatar
      Stephen Haner

      I’ve long hoped for a national constitutional push to ban the extensive rent seeking subsidies taxpayers provide businesses, but it would have to be a nation wide rule. I say this having made my living… 🙂

      1. LarrytheG Avatar

        works the other way also when a company proposes to build something and the locality wants proffers and “incentives”. Spower solar farm provided millions to the county to sweeten the approval deal. Some characterized those things as “bribes”.

      2. walter smith Avatar
        walter smith

        I get that. It is like lotteries. Making Richmond wealthier through a lottery is a sucker’s game, but some people will make out. I wonder who?

    2. LarrytheG Avatar

      re: ” best tax environment and the best regulatory environment, then get out of the way.”

      so the state that offers no taxes and no regulation wins the competition?

      or even worse, no taxes, they pay incentives and they let the company write the regulations…

      1. walter smith Avatar
        walter smith

        Let’s play Sesame Street.
        One of these things is not like the other…
        These three States have budget surpluses…
        Florida, Texas, Tennessee…
        Hmmm…

  12. energyNOW_Fan Avatar
    energyNOW_Fan

    Let’s not forget the boldly protectionist Biden transportation policy in the new IRA act. That law, immediately after passage last August, blocked Toyota and other foreign company car-buyers from the plug-in subsidies they had been entitled to. The law expanded huge subsidies for US-“assembled” plug-in vehicles, but said the autos had to source the batteries from the USA, which is problematic since nobody makes anything here. So I was expecting work-arounds (like this plant) to allow US autos to claim they were sourcing batts in USA. In other words, Dems looking to remove the restrictions on battery sourcing, and make it mandatory to buy US “assembled” cars and also mandate that those cars must be electric. The US autos are strongly supportive of the Dem protectionist policies, and say that the intend to stop making gasoline vehicles and hybrids.

    1. energyNOW_Fan Avatar
      energyNOW_Fan

      PS- If you actually want a Tesla or Bolt, in case you do not know it, this is the time to pull the trigger. The Biden IRA bill re-instated massive subsidies (for US made plug-ins only), which had expired for Tesla/GM under the old subsidy rules. And Tesla just announced a big price cut, not because the cars are cheaper to make, but sales had dropped off globally.

    2. James McCarthy Avatar
      James McCarthy

      Damn protectionist policies. Return to those thrilling days of yesteryear comforted by isolationism.

  13. Bubba1855 Avatar

    as usual, BR’s commentators raise many interesting questions…
    I think we have ask ourselves whether or not we want to allow and/or subsidize the CCP to invest in VA/USA. We have seen what can happen when you let a potential military adversary become intertwined in your economic system…aka…Russian natural gas in western Europe. What is going to happen at this battery factory
    if the CCP makes a move on Taiwan? Do the profits that CATL makes from this factory support the CCP’s military?

    Lot’s of questions…few answers…
    Of course, one wants to ask ‘why doesn’t Ford partner with an American battery mfg?’

  14. Fred Woerhle Avatar
    Fred Woerhle

    Delegate Terry Kilgore suggested a possible justification — the plant’s Chinese links would somehow prevent it from getting federal green energy tax credits under the Inflation Adjustment Act. If that were true, maybe another company would have better long-run prospects, and better fit the community (and better warrant state aid). But Youngkin himself hasn’t suggested that. Absent such a problem, Virginia should welcome the plant.

    1. energyNOW_Fan Avatar
      energyNOW_Fan

      Ford may be expecting Congress to water down the made-in-America battery rules, I know I am expecting that.

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