Just 3 days ago, in the last Canoo manufacturing post , I said it literally doesn't matter who the 3rd party manufacturing agent is and I hadn't planned on spending much time speculating about the topic again. But just yesterday we saw an interesting development that has turned my attention back to it. Unfortunately, the development just leads to more speculating and jumping to conclusions - so view this post as much more of an "opinion" piece than anything fact based.
Yesterday, the Mid-America Industrial Park's board of directors held a last minute special board meeting in Tulsa at the Tulsa Regional Chamber Offices.
This by itself doesn't indicate much but it's a clue that something might be happening. There are a couple of agencies and companies who all are interwoven in their plans and goals for economic expansion within the NE area of Oklahoma concerning "advanced mobility" and this isn't even a complete list:
Not included in the list are all companies and state agencies in connection to the Oklahoma-Arkansas partnership to create a "Super Region for Advanced Mobility".
At the center, or at least very near the center of all the advanced mobility talk, is Canoo - especially when both MAIP and TRC are in the same room.
Although there is nothing to definitively point at to confirm the board meeting was about Canoo - I personally find it extremely likely to be concerning them directly, or if not, then at least partially in relation to Panasonic negotiations.
This morning a legislative group recommended approval for Tulsa's request for $50M in ARPA funds to beef up the infrastructure of the Fair Oaks Ranch Industrial Park. This is the proposed location of the land that Oklahoma tried to woo Tesla with.
Is Oklahoma gearing up for a "Plan B" site for Panasonic's "Project Ocean" if the $300M TIF is rejected by Mayes County residents this November? Maybe...It's been indicated that Panasonic told officials that without the TIF passing they won't come to Pryor.
I think it's really brilliant to make the investments in the infrastructure even if it's not about being plan B for Panasonic. The region is set to see tremendous growth over the next several decades so they will see an ROI on that $50M one way or another.
If the board meeting wasn't about Project Ocean - what other item would it be for concerning Canoo? Manufacturing! To quote Tony directly from the last ER "We are in current negotiations for additional facilities near our core locations in Bentonville and Pryor for additional capacity to help with our increasing demand. "
If the meeting had to do with Canoo getting some local low-volume manufacturing going, then Tulsa would make the most sense for the location of an impromptu meeting given all the different partners that would be involved, most being Tulsa based.
It is not clear if Canoo is looking at these locations to man and operate themselves, or just provide a location for a 3rd party to handle the actual manufacturing with Canoo's robotics. Per Tony, Canoo has "80% of [their] supplier tooling [and they] have the capacity to produce over 50,000 units on an annual basis."
Bringing in the required expertise to the area from out of state might not be an easy task, but it's not impossible either. Plus there are local friends and partners to assist in the efforts or perhaps head the programs outright.
The Cherokee Nation has been manufacturing for the aerospace and defense industries for 50 years providing systems sustainment and integration, manufacturing, engineering and program management. If using contract manufactures is a long term plan now for Canoo, the tribe could even apply for a loan to retrofit or build new facilities from the DOE using their Tribal Energy Loan Guarantee Program(TELG). Thanks to the Inflation Reduction Act, this program was recently expanded from $2 billion to now $20 billion in total loan capacity!
There is also the likes of Lyseon North America Inc. (LNAI) - They are setting up a 200k sq. ft. facility at the Tula Port of Catoosa. The company offers engineering, metal stamping, welding and coating, mainly for the U.S. automotive industry, targeting a low annual production volume.
Aside from the obvious benefits of having manufacturing close to home, there is of course another area where Canoo bringing more jobs even sooner helps themselves and the politicians backing them: Public Relations!
I will attest that there is a VERY common misconception among Oklahoma voters that Gov. Stitt gave $300M to Canoo in a back room deal and left the tax payers holding the bag.
I see it being used in arguments online constantly. This is not a political website, and I am not giving or implying any endorsement for or against any political party/candidate.
Despite the theme of this particular post being quite speculative, I want to make one thing absolutely clear: Neither Oklahoma or Arkansas have paid out money to Canoo in association with the publicized and promised incentives packages. Of the contracts and definitive agreements we've seen that are actually signed, to date, they are all performance based contracts and only pay money to Canoo as their promises are being kept and delivered on.
In recent polling, Gov. Stitt and his challenger Joy Hofmeister are neck and neck with only 2 months left of the campaign season. Stitt would probably really welcome any perceived political wins with being able to announce bringing more jobs and economic development to the state and prove that Canoo is still delivering and worthy of the promised incentives to come.
Back in May of this year, I had a brief twitter-conversation with Andy Fugate, who is running for a seat in the Oklahoma House of Representatives. I felt that he was erroneously implying that same argument from above that OK had wasted $300M on Canoo with nothing to show for it so I took him to task on it. In the end, his argument came down feeling the arrangement between Oklahoma and Arkansas was lopsided being that Oklahoma was putting up the larger chunk of incentives. I still disagree with that line of thinking but if Canoo were to bring some of the initial manufacturing to Oklahoma it would disable that line of attack completely.
Going back to the Board Meeting again, it had three items on the agenda:
A behind closed doors "executive session" where matters deemed sensitive or private in nature can be discussed
A public discussion about economic developments
and a vote to approve David Stewart, chief administrative officer, to negotiate and execute a lease agreement for Building 625
Building 625 was originally slated in March of this year to go to Northern Data AG, a German based tech company to serve as its North American operational headquarters and data centers. I wasn't able to attend the public portion of the MAIP board meeting so I don't know if Building 625 is still going to ND or not - but if not, it could be that Canoo has its sights on it as a potential location.
Obviously there are some big positives to Canoo speeding up their time-line for Oklahoma based manufacturing and my own personal thoughts on any production happening faster can be summed up in simple 3 words - "Giddy up partner!"
Authors disclosures: I am long Canoo - I own common shares, warrants and call options.