MG auto plant taking bumpy road to Ardmore

July 30, 2007

OKLAHOMA CITY – Oklahoma’s deal with Nanjing Automobile Corp. to locate an MG automobile plant in Ardmore hasn’t exactly turned out to be a slam dunk.Officials say negotiations are ongoing, but acknowledge some hiccups that are bound to cause economic development heartburn.Two of the latest wrinkles are licensing and trademark issues intertwined with the merger of Nanjing with Shanghai Automotive Industry Corp. Discussions between the two Chinese auto companies have been under way for months. The two reportedly signed a letter of intent this week to form a partnership.

Paul Sund, spokesman for Gov. Brad Henry, said the governor’s office has been aware of the trademark issues for some time.“We always knew this was a very complex deal that would require a lot of work, but Governor Henry remains optimistic it will ultimately come to fruition,” said Sund.Wes Stucky, president of the Ardmore Development Authority, said “There are some licensing issues with Nanjing and also with Shanghai Motors.”However, Stucky echoed the governor in saying that negotiations continue.“There are issues to be worked out,” he said.Marc Nuttle, an Oklahoma attorney heading up negotiations, was out of the country Friday.An e-mail to Nanjing Automobile Corp. for comment went unanswered.

The state provided $15 million from its new Opportunity Fund for improvements, including extension of a runway at the Ardmore airport, as well as a $5 million startup funding loan for the MG project that has already been paid back.The Oklahoma Supreme Court recently struck down the process for approving awards from the fund, which involved a board composed of the governor and House and Senate leaders. However, the decision’s effect is prospective, and did not nullify the $20 million package for Ardmore.Another $2.5 million has been secured from the Federal Aviation Administration for runway improvement, plus $10.5 million in Ardmore tax-increment district funds, $3.5 million from the city of Ardmore and $1 million in authority funds for water and wastewater extensions, streets and roads, rail spur extensions and aircraft hangar improvements.

Stucky said the development authority recently selected TTK Construction of Edmond for the runway-expansion project.When the MG project was announced a year ago, officials estimated that the plant could create 575 direct jobs, with indirect and temporary jobs bringing the total to more than 1,300, as well as a boost of $189 million in economic activity.If the authority fails to complete the runway extension within three years and fails to complete improvements aimed at making Ardmore an air cargo transportation hub within five years, the $15 million must be paid back with 6-percent interest.

The state may extend these deadlines for up to two years upon good cause shown by the development authority.The state will have a lien on the improvements funded by the $15 million.In the event that the MG deal ultimately falls though, Stucky said the lengthened runway and other improvements could lure other businesses and industries to the state.“We’re having ongoing discussions with numerous companies,” he said.