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MVP-RV Division Getting Foreign Trade Zone

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November 27, 2009 by   Leave a Comment

Riverside County, Calif., supervisors voted unanimously Tuesday (Nov. 24) to support an application for a foreign trade zone inclusion of a Moreno Valley site where electric cars are planned to be assembled.

CT&T Co. of Seoul, South Korea, signed a formal agreement in September to begin building electric-powered cars at a former recreational vehicle manufacturing site near March Air Reserve Base. Locating in a foreign trade zone gives companies reductions in import fees and streamlines the shipping of parts from South Korea, according to the North County Times, San Diego.

CT&T has contracted with Moreno Valley-based MVP EV to assemble, sell and service its line of cars. MVP EV is a sister company to RV builder MVP-RV.

The foreign trade zone is centered around the base. Because CT&T is outside the zone, its site would be designated a subzone, but eligible for benefits as if it were inside the actual zone. The next step in the trade zone request is up to the federal government, which also is considering applications from five other companies for inclusion in the zone.

For a company doing business overseas, “inclusion in an FTZ is absolutely essential for business attraction and retention,” said Tom Freeman, the county’s commissioner of foreign trade. Still to be resolved is the assignment of a customs officer to the zone; the federal government wants the county to pay the approximately $130,000 cost.

In public comment at the meeting, unofficial county watchdog Garry Grant said that the CT&T project is an example of outsourcing and ultimately will harm Riverside County’s economy.

Fifth District Supervisor Marion Ashley countered that the CT&T project is “in-sourcing” and just what the county economy needs.

Third District Supervisor Jeff Stone agreed, saying the car factory will send a positive ripple though the county economy.

“These new employees are going to need homes, they’re going to need to buy gasoline, they’re going to need to eat in restaurants,” he said.

MVP says it expects to begin assembling a basic two-seat car early next year. Initial hiring is expected to be about 120 workers, rising to perhaps 700 as the company adds new models.

Prices are expected to start at $10,000 for the basic CT&T car, which will run about 75 miles between charges. Other models could include a four-door passenger version, fleet vehicles, patrol cars for malls and campuses, and buses, although expansion to assemble those is at least a year and half out, said Brad Williams, president of MVP.

Economists say attracting manufacturing jobs represents a new chapter for the Riverside County economy, which relied heavily on housing construction before the recession.

CT&T’s basic e-car looks a bit like the Smart car, which is produced by Daimler AG of Germany. Cargo space behind the seats can accommodate several bags of groceries or similar cargo, and stowage space in the front could take a few more grocery bags.

It is envisioned as a family’s second vehicle, an errand runner, grocery hauler and chore wagon.

Top speed on the basic model will be 35 mph, but later models will be freeway-capable, the company said.

CT&T says it plans other assembly and distribution sites around the nation; it says it plans to form partnerships with American companies as it did with MVP.

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