Published on July 15th, 2019 | by Steve Hanley0
SF Motors Puts Indiana Manufacturing Plans On Hold
July 15th, 2019 by Steve Hanley
Just over two years ago, we reported that SF Motors purchased the former AM General factory in Mishawaka, Indiana. They planned to spend about $30 million to retool it and manufacture “intelligent” electric cars. The local community, of course, was ecstatic. The announcement meant that some of the jobs lost when AM General stopped producing the H2 Hummer would return, giving a boost to the local economy.
SF Motors, owned by China’s Sokon Industry Group, has its US headquarters in Silicon Valley and a research and development center in Ann Arbor, Michigan. It is forging ahead with its plans to build its SF5 and SF7 connected electric vehicles in a new factory in Chongqing, China. Cars may soon be rolling of that assembly line, but plans to begin production in Mishawaka have been put on hold.
According to the South Bend Tribune, SF Motors CEO James Taylor assembled all employees at its Santa Clara, California headquarters last week, and read a statement telling them they were being laid off. “At a time when Sokon is managing so many dynamic challenges, it is simply too much in the short term to also attempt to launch a new brand and product type in another new market. This means that SF5 product development for the U.S. market is on hold.” he told them.
The company had planned to bring production of its SF5 electric SUV to Indiana by the end of this year. The factory currently employs 85 people, but that number was expected to increase to around 500 once production began. In his remarks, Taylor added that the company plans to refocus its American operations on “electric powertrain products and services and contract manufacturing opportunities” at the Mishawaka plant.
The reasons given for the layoffs and company’s change of plans include a struggling Chinese auto market and ongoing trade conflict, including tariffs on Chinese-made products. “The uncertain outcome of the U.S.-China trade tariffs has already forced many business decision makers to announce cancellations, delays or change their current plans,” Taylor wrote to employees. How utterly confounding it must be for the people of Indiana to find that the person they expected to reinvigorate the local economy has instead killed opportunities for new industry to develop in the area.
State and local officials promised significant financial incentives to the company if it met certain hiring and investment goals. So far, the company has not notified any of them about its change in plans. Bill Schalliol, the economic development director for St. Joseph County, where the plant is located, says he hasn’t heard from the company recently and has had no indication of problems with the company.
Abby Gras, spokeswoman for the Indiana Economic Development Corporation, said the state agency has “received no indication from the company that their commitment to Indiana has changed or that their presence in Mishawaka is in jeopardy.”
People love to jump on Tesla for any number of perceived failings.
“It is too optimistic.”
“Nobody wants to buy electric cars.”
“It is on the verge of bankwupcy.”
“Elon Musk is too bold.”
“Elon Musk isn’t bold enough.”
In the final analysis, to paraphrase a famous line by Jerry Seinfeld, “Promising to build electric cars is easy. Actually building electric cars is hard.” SF Motors is not the first EV manufacturer to founder on the cruel rocks of reality, and it won’t be the last.