Damage Control: BYD Brings Crisis Manager to Address Issues

(We’re not going to republish every Long Beachize article on Streetsblog, so you really should Like us on Facebook and Follow us on Twitter. – DN)

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Lanny Davis

Like sand through the hourglass…

In an attempt to create some form of damage control, BYD Motors brought on a crisis management lawyer by the name of Lanny Davis to help alleviate some of the problems the bus manufacturer currently faces. Specifically, Davis attempted to iron out concerns regarding alleged labor violations, Altoona testing problems, and possible delivery delays for Long Beach Transit (LBT)’s electric bus fleet.

Additionally, Davis even sent out a letter to LBT President and CEO Kenneth McDonald—not even six months into his position—as well as Mayor Bob Foster, the entire City Council, and the entire LBT Board. In it, he sought to “set the record straight” on subjects that BYD & Company “understands why you might be confused” over.

They brought out Supervisor Michael Antonovich, the conservative overseer of the County’s district where Lancaster, the site of an apparent BYD manufacturing facility, is. They brought out the mayor of Lancaster, R. Rex Perris (ah, good ol’ Rex, kinda reminds me of the Mayor of Windsor, Canada, who also sang the praises of BYD bringin’ a manufacturing plant to town only to have a whole choir perform for an empty church).

The irony is not just the fact that they brought out players we’ve heard of before—Rex had a lovely full-page national spread in the Los Angeles Times if you didn’t catch wind of it—but the fact that their message hasn’t really much altered.

In a nutshell, I present to you the press conference: We didn’t violate labor laws; we’ve just been cited for the possibility of having committed them. We have no idea why LBT is expecting delays; we are testing the right bus despite LBT Boardmembers stating otherwise. We find no reason to panic over our Altoona testing; despite cracks in the rear and faulty bracket installation and failed subassemblies, everything is perfectly safe.

Davis failed to mention that BYD has been handed 112 citations, to be exact, by the DIR and the investigation is currently ongoing with the possible determination—to use Davis’s own word—of a $100K fine occurring should the allegations prove true.

Davis was adamant to the point of being redundant about supposed “misinformation on the Internet” and “negative rumors or innuendo, certainly those reported in the newspapers anonymously.”

“I just want to address issues that we believe to be beyond factual dispute and that are capable of being substantiated,” Davis said. “The [State of California Department of Industrial Relations, or DIR] has given citations which are allegations of violations; they are not determinations. And a citation is different than a fine, which some news reporting confused those two words.”

Davis failed to mention that BYD has been handed 112 citations, to be exact, by the DIR and the investigation is currently ongoing with the possible determination—to use Davis’s own word—of a $100K fine occurring should the allegations prove true.

According to BYD officials and Davis, both admitted that the company did indeed hire five Chinese nationals over the course of some four or so months; two have left while the other three should be gone by the end of this month. However, according to DIR accusations, BYD failed to properly pay these workers the legal wage; according to Davis, this is “totally baseless and made up or misunderstood by somebody.”

Davis claimed these workers received somewhere between $12 to $16/hour, well above the $8/hour state minimum. What Davis did not address is what these workers were precisely doing—engineering? assembly line? janitors?—which makes the number seemingly dubious. And though Davis said he would happily provide direct substantiation of these numbers, when Longbeachize made such a request, I received the following email from Mr. Davis:

“In light of your factually inaccurate Internet post yesterday [December 14] and failure to report on the facts as I stated in the press conference, it appears that you are not interested in the facts. Therefore until I speak to your publisher or your editor, or hear from you directly as to why you are not interested in reporting the facts, I will advise BYD not to respond to your inquiries.”

Though I did reach out directly, Davis did not respond for further comment via phone and the documents I requested have not been provided.

Additionally, BYD says it has 35 full-time employees: 15 at its Lancaster manufacturing plant and 20 at its administrative offices in Downtown Los Angeles (which was provided to them via the City of Los Angeles, which spent $1.2M to hand BYD the space). Of these 35, 21 are U.S. citizens, seven hold Green Cards, and the remaining seven have legal documents which support them working here. Davis has not provided specific titles or wages of the workers at either Lancaster, presumed to be engineers or assembly line workers, or Downtown, presumed to be executives and administrators.

According to an unknown estimate, BYD is expected to have created some 200 jobs in the States by the end of 2015.

In regard to Altoona testing—cracks that were discovered near the rear of the BYD bus undergoing Altoona testing—BYD seemed confused over LBT’s request that a bus manufactured in Lancaster, i.e. the actual bus LBT will be procuring, undergo Altoona testing as well. According to LBT, the current BYD bus which has undergone some 6,000 miles of testing is one which was manufactured in China and the Board’s request that a U.S.-built version be tested could result in delays.

“Long Beach Transit’s Board of Directors requested that a U.S.-built BYD bus, that meets our model specs, be tested in Altoona,” said LBT spokesperson Kevin Lee. “That would be the upcoming BYD engineering bus, which would be built in Lancaster. We are awaiting a decision from the FTA as to whether they will fulfill that request or continue with the current bus that is at Altoona. This is how the process of request goes: LBT Board requested it of LBT staff. LBT staff requested it of BYD. BYD requested it of the FTA. It is ultimately in the hands of BYD, because it is their bus.”

Davis, however, seemed unsure of precisely what Lee was referring to.

“The bus currently being tested in Altoona is indeed the production unit that will be delivered to LBT,” Davis said. “We do have a disagreement with the Federal Transit Authority on that subject… While I agree there is a misunderstanding, I am not sure if it was BYD’s own miscommunication. Sometimes, there are honest misunderstandings and that is the best explanation I can offer… There is only one set of facts and that is that there is one bus—not two—being tested at Altoona with no safety issues.”

So there we have it, folks: five temporary Chinese workers are being rushed out of the States while BYD undergoes investigation (totally not sketchy); there are just labor violation accusations (y’know, by the State of California, no biggie, happens all the time) and no fines have been officially issued (because they’re being investigated); there is no need to worry about a crack in the rear of their bus (one of the most vulnerable parts of a bus); and the FTA and LBT are “confused” or “misinformed” and BYD is the poor, misunderstood corporate conglomerate that is doing nothing but amazing things for both the world and the United States.

BYD is required to deliver the buses by June of 2014. Until then, these are the days of our lives…

Read more:

  • calwatch

    I’m not surprised BYD refused to talk, since in past articles (not just the December 13 one) there appeared to be no attempt to reach BYD for comment. I think that BYD should be more transparent, and that they should post the information on their web site.

    Still, I am sympathetic to BYD’s claims. California labor law, particularly the “executive, administrative, or professional” exemption that allows a person to be paid a fixed salary instead of an hourly wage, is significantly stricter than the FLSA exemption. Addison also fails to note that BYD provided free housing and transportation to their employees from China, and that their wages in the US, which may seem low at $12 to $16 in the United States, but in China, actually puts someone in the upper middle class there, particularly when they can save almost all of it since there are no housing costs. The Chinese workers were probably there on a temporary basis and would have to go back to their families at some point anyway, or to start up factories elsewhere – Addison’s snark and nativist tone is unwarranted. Lanny Davis, who parsed Clinton’s statements years ago, is absolutely correct – these are all allegations that haven’t even been scheduled for a hearing, let alone adjudicated.

    As far as the bus, if the processes and materials that built the bus in China are the same processes that will build the bus in Lancaster, functionally they are the same bus. There probably is some confusion there. And, BYD’s statement on their website completely denies the existence of ANY cracks. It’s not that they are saying “don’t worry about it”, it’s that they don’t exist at all. BYD should do a better job of differentiating the Chinese-assembled bus used in Altoona testing and the American-assembled bus which is currently going out there at LBT’s request. However, this muddled explanation from Addison doesn’t really help either. Rather than speculating as to whether the bus will pass Altoona, which is what Addison and some members of the LBT board want to do, I would prefer to wait for the actual results as to whether the bus passes or fails, before passing judgment on the structural integrity of the bus.

    And no, BYD is not paying my bills either.

  • Irwin Chen

    I think it is time for Brian to disclose if he has any financial interest or ties to BYD’s competitor.

  • Oh, that canard again.

    I am guessing they are like mine with all of AnsaldoBreda’s competitors.

    Brian’s style may ruffle your feathers, but the facts are beginning to speak for themselves. I hope that BYD faces more scrutiny from both Long Beach Transit and the LA Metro Inspector General.

    “Follow the Money” Brian!

  • But Uncle Mike and Rex promised jobs, lots of jobs, for “We the People”, the unemployed of the High Desert!

    Or were these “jobs” really only for imported indentured servants from another country, the one whose constitution’s preamble includes “Under the leadership of the Communist Party of China and the guidance of Marxism- Leninism and Mao ZedongThought, the Chinese people of all nationalities will continue to adhere to the people’s democratic dictatorship and follow the socialist road…”

    http://english.people.com.cn/constitution/constitution.html

  • Funny how this:

    “LA Authority Manager Hunt said: ‘The technology of this BYD bus system is truly break-through, especially the battery, which is long-lasting and safe and is superior to any competitor alternative that I know of.'”

    http://www.businesswire.com/news/home/20131213005908/en/LA-Area-Transit-Officials-Tout-Electric-Bus-Company

    reminds me of this:

    “‘The 2550 is as technologically advanced as any light rail car operating
    in the United States,’ said Roger Snoble, Metro’s chief executive officer.”

    http://www.prnewswire.com/news-releases/first-of-50-italian-made-light-rail-vehicles-for-metro-blue-green-and-gold-lines-delivered-by-russian-super-transport-plane-54619727.html

  • Of course we do have alternative sources who are reprinting the press relea…er, um, covering the issue!

    http://usa.chinadaily.com.cn/epaper/2013-12/16/content_17176825.htm

    Brian, did you mention that Warren Buffett is an investor in BYD yet? ;-)

  • calwatch

    What engineering talent who is qualified to work on buses lives in the High Desert? As far as I know Lockheed and Edwards AFB are not laying off people, and in fact Americans who can pass background clearances and have degrees in mechanical engineering are still in quite high demand. Once assembly begins, BYD will hire from the local area, same as Siemens, AnsaldoBreda, and NABI.

    If a company wants to rotate their staff around the world for experience, I see no problem with that. American companies do that all the time and the Chinese are no different. How many Americans did Nissan hire to get their Smyrna plant up and running? Most of the initial folks were Japanese.

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