"This is a tremendously significant project,'' said Paul Krutko, San Jose's chief development officer, who called it an "opportunity to become a center of a new transportation technology in the United States.''
San Jose is on a short list of cities Tesla is considering for its manufacturing plant. Other contenders include Vacaville and South San Francisco. A decision is expected in weeks, as Tesla plans to begin production in late 2010.
Tesla officials said they provided information to the city about the potential impact of an automobile manufacturing plant but otherwise declined to comment.
Attracting middle-class "green jobs" in environmentally friendly technologies is a key part of Mayor Chuck Reed's Green Vision initiative approved by the city council last year. First among its 10 goals is creating 25,000 "clean tech" jobs and making San Jose a world center of "clean tech innovation."
The privately held Tesla was founded in 2003 with a staff of 80 people in California and abroad and a goal of producing an all-electric car that is both high-performing and stylish.
read more....
Earlier this year, the company began delivering its first production model, the two-seat, zero-emission Roadster, which sells for $109,000 and is built by Lotus in England. So far, 50 Roadsters have begun production and 27 have been delivered to customers. The company expects production to reach 40 a week by March.
Tesla is developing a more affordable sports sedan, the Model S, that would be built in the United States and sell for perhaps half the price of the Roadster.
The company initially proposed manufacturing the car in Albuquerque, N.M. But the firm decided to stay in the Bay Area, thanks in part to efforts by Gov. Arnold Schwarzenegger and Treasurer Bill Lockyer to offer state incentives, which include waiving the sales tax on $100 million worth of equipment.
The San Jose City Council last month authorized Krutko's office to aggressively secure a deal with Tesla for the new plant. A more detailed assessment of the estimated economic benefit to the city is pending, but it is only half of the equation the council will have to consider. The other half is what incentive package the city would offer the company to build its plant in San Jose. That is being negotiated privately, but it is likely to be substantial.
The proposed 600,000-square-foot Tesla plant is small by auto manufacturing standards. Fremont's 5.3 million-square-foot New United Motor Manufacturing plant, with 5,400 employees producing 420,000 cars and trucks a year, is about 10 times bigger.
But the city's preliminary analysis indicates that construction of the proposed plant would provide nearly 600 jobs and $40 million in wages, contributing an estimated $92 million to the local economy. The plant would initially provide 400 manufacturing jobs with average annual salaries of $48,000. Relocating the company's research and development and headquarters operations would bring an additional 525 jobs by 2012, with an average annual salary of $148,000.
Krutko said those jobs alone would have a collective annual buying power of about $3 million. About half that spending would be in San Jose, driving up sales taxes.
The plant is expected to produce 20,000 cars a year worth $1.5 billion. In addition, it is expected to draw suppliers to the area, indirectly producing $1 billion worth of parts and other related materials. The suppliers would add 116 new jobs that pay an average of $52,000 a year.
source:mercurynews
