Complex deals ripe for doubts




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Analysis: Complex deals ripe for doubts
NewsOK.com, March 29, 2007
Don Mecoy, Business Writer

Thinking outside the box couples big rewards with high risk.

One such idea is the plan of Nanjing Automobile Corp., a Chinese company, to build a British sports coupe in Ardmore. It's a creative, but complex, concept that could bring millions of dollars and hundreds of jobs to the state.

But the clash of cultures and delicate negotiations surrounding the prospective deal made it easy for some to believe a report Wednesday on National Public Radio that the Oklahoma project was dead.

Not, however, for Dick Rush, president and chief executive officer of The State Chamber.

"My first reaction was: Oh, God, not another rumor,'" Rush said. "If I had a dime for every bit of energy over my 34 years of chamber work in killing rumors, we'd be a millionaire here."

As recently as Wednesday morning, a chamber official at a Tulsa conference on mergers and acquisitions touted the Nanjing deal as evidence of the growing globalization of the Oklahoma economy. State politicians and business leaders have been giddy about the possibility of a massive manufacturing operation in southern Oklahoma since Nanjing announced the deal with great fanfare in July.

But Wednesday's National Public Radio report, quoting a Nanjing employee, is not the first time doubt has been cast on the Oklahoma/MG venture.

British media reported last year that a Nanjing executive said plans to build in Oklahoma were merely an idea. Duke Hale, the former head of MG Cars North America, later told a reporter that the executives, unfamiliar with English and Western ways, may not have understood the question.

Hale stepped down this month as chief executive of the company planning U.S. assembly and marketing of MG roadsters.

Earlier this year, reports in the British automotive press, mirrored on Nanjing's Wikipedia Web page, surfaced that Americans had grown frustrated with the Chinese manner of doing business and lack of progress on the Ardmore plant.

But Marc Nuttle, head of Oklahoma Global Motors LLC, last month said American workers returned from Europe not because of any rift, but because they had completed work on intellectual property rights.

The negotiation period after a major announcement produces little tangible evidence of progress, and that, Rush said, can be frustrating. "I know we'd love to see those MGs rolling off the plant down in Ardmore tomorrow, but from all we have been told the negotiations are ongoing and on track," Rush said. "That won't be said by those involved if it's not true."

Nuttle, an attorney and former legislator, has acknowledged that many obstacles must be overcome before cars can start rolling off an Oklahoma assembly line. But none of those hurdles is insurmountable, he said.

Nuttle issued a statement on Wednesday saying that he was in China as recently as a week ago and that negotiations continue.

He did not return calls seeking comment Wednesday.

In an interview with The Oklahoman last month, Nuttle said his group had submitted plans for the Ardmore plant and was working on concepts for the vehicle to be assembled there and the dealer network that would market the car. If negotiations are completed quickly, Nuttle said cars could be rolling by the spring of 2008.

"There's a cultural barrier," he said. "There's a lot about Western contracts that still the Chinese government doesn't understand. They just don't. You just have to be patient."

For some, patience can be difficult.

Rush suggested the media and the public put their pessimism aside.

"You're always going to have those that expect problems, and unfortunately they sometimes get the headlines," Rush said. "And that's a shame because it changes the perspective of anybody that looks at any deal."



 
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