Storm clouds – or maybe they’re vultures – continue to gather over electric-car manufacturer Coda Automotive, which by all appearances will soon go the way of Studebaker, DeLorean and all the others on the long list of American auto failures. And by the looks of the media reports out of LA, Coda could inflict some serious damage on a prominent mayoral candidate on its way down.
Since we reported on Coda’s troubles in December, when the company slashed its workforce by 15 percent, there has been another round of layoffs; word of several lawsuits from vendors demanding payment; the announcement that its snazzy store at a Century City mall would shutter (with Tesla moving in); and the revelation that UQM, Coda’s main drivetrain supplier, had “essentially written Coda off.”
None of which is too surprising, given that Coda had already suffered a recall for improperly installed airbags, scored badly on a crash test and sold fewer than 100 of its $37,250 MSRP sedans.
Against this backdrop, LA has been buzzing this week about City Council President Eric Garcetti’s role in getting Coda to move from Santa Monica to Los Angeles in 2011, a feat accomplished with the use of $1 million in redevelopment agency funds. Garcetti has been leading in surveys, but not by much in a crowded field, and the latest news can’t help when voters go to the polls next Tuesday.
LA Weekly reported that “it was Garcetti who deserved most of the credit” for luring Coda and what he hoped would be 650 jobs to Los Angeles – and that Garcetti took in “$8,000 in contributions from Coda executives and their spouses.”
LA Weekly hit Garcetti hard in the story, which had the headline, “Eric Garcetti’s Solyndra: Mayoral Candidate Pushed $1 Million Deal to Lure Troubled Electric-Car Company,” and other journalists, too, were asking tough questions of the candidate. LA Observed’s Mark Lacter wondered ”why was the $1 million given out without an application from the company or any written analysis from the city? Why did the council unanimously sign off on the payment without debate, according to the Weekly piece? And why was there no provision for repayment in the event that the company did not survive, which is looking more and more likely?”
For his part, Garcetti suggested to LA Weekly that Coda could survive on its battery business (“Most of the stuff they’re doing is not cars,” he said. “It’s actually battery technology.”) but that sounded dubious at best to an analyst the paper talked to.