Did Chinese Car Maker BYD Scam L.A. Taxpayers?
The sordid tale of Chinese automaker BYD's allegedly false promises to the people of Los Angeles could end up being City Hall's version of Solyndra, the solar concern that went belly up with half-billion in federal aid on-board.
BYD / Facebook
The city of Los Angeles committed $1.6 million in federally backed incentives, including a rent guarantee, to lure a BYD outpost and a promised 102 jobs to town in 2011. But not did those jobs fail to fully materialize, some of the jobs that were created are allegedly providing illegal wages:
In fact, last month the state of California fined BYD in L.A. nearly $100,000 for multiple alleged violations, including paying less than minimum wage, failing to allow proper breaks and withholding twice-a-month wage statements, according to a state violation sheet obtained by the Weekly.
The group Los Angeles Alliance for the New Economy (LAANE) alleges that ...
... BYD's Chinese workers are reported to be working in Los Angeles for up to six months, living in dormitory style housing, and earning just $1.50 per hour plus a $50 per day allowance.
Sounds like Third World stuff.
A California Department of Industrial Relations spokesman indicated to us this might not be the last BYD has heard of labor officials: "The investigation is ongoing," he said.
And keep in mind that City Hall prides itself on being pro-worker. This is one of the most union-pleasing City Councils in the country, and Los Angeles pays public workers at least a "living wage," and demands as much from contractors.
BYD is appealing the state decision.
In the meantime LAANE has been on BYD for its alleged violations. A representative of the labor group says the company "exploited" Chinese workers in L.A. by paying less than minimum wage.
Yesterday about 40 demonstrators showed up outside BYD's main office in L.A. (1800 South Figueroa St.) to protest the working conditions at its Lancaster plant.
The company is known for cars of such low quality that analysts have said they're far from being ready for the American consumer market. Some of the vehicles have the look of fake Mercedes-Benzes. Nonetheless, the company is building people-moving electric buses in Lancaster that are being sold to L.A., Long Beach and New York transit agencies.
Now LAANE wants to know if the city of L.A.,which committed to $1.6 million in benefits to the company, will hold BYD's feet to the fire now that those promised jobs (only about 40 of 102 workers have been hired so far) have yet to come through.
Rachele Huennekens, a spokeswoman for the group, tells us:
The question is whether or not BYD is a company that has kept its promise and whether the city should reclaim those funds. Is there anything the city can do to enforce and monitor the companies the city does business with. This is kind of an example of public officials asleep at the wheel and of what can go wrong with no public monitoring.
Among those who lobbied BYD to come to town was former Mayor Antonio Villaraigosa, who had traveled to China to woo the bus-manufacturing operation.
Jeff Millman of the Mayor's office wouldn't say whether or not the city would try to enforce or revoke its deal with BYD. He told us only this:
The city is monitoring the state's investigation, which is ongoing.
BYD, meanwhile, said this week there was confusion over its payment of some Chinese workers in Yuan and that it will seek to clear that up with California labor authorities:
BYD has been in a standard product testing phase in accordance with regulatory guidelines. We have just received customer approval to start manufacturing our green technology buses, and look forward to hiring more California workers for those jobs. BYD is also dedicated to properly paying its employees under California's wage and hour laws.
We reached out to the company for further clarification but did not hear back.