The current administration has used nearly $15 Millions of tax payer dollars on just one very speculative endeavor. That speculation is the Ashland Aluminum plant. (click here for other details).
First, just consider the job claims regarding the number of workers, the claims of $70,000 salaries, $1 lunches and free day care. (click here for the article on these claims). This sounds like a good deal on the surface. Yet without Union representation those jobs and wage structures have yet to materialize as far as job postings on their website. CEO Bouchard was quoted with regard to unions as saying, “We don’t need anyone else telling us how to build that business.” Certainly without union representation, promises of those salaries and benefits are far from certain.
The administration also claims that Braidy “some day” return about $250 million back to the state. (click here for link to CJ article for info quoted in this paragraph) Governor, business proposals, especially large-scale investment ones require some kind of pro forma five-year revenue stream projection. Just where is that information? At no time have you ever produced said pro forma revenue projections; nor is there any such information available on the Braidy Industries web site. So just where is this $250 Millions you claim are there, coming from?
In a separate article the Governor claims that Braidy has sold their “whole first year’s production”, (click here for that article) , and again there is no information at all on the Braidy Industries website announcing such contracts exist. As a business person, I can tell you one thing, if I have sold my entire first year of product, there is no chance I am not putting out a press release to announce that.
Additionally, if as an owner of a company, if I have that much in pre-sold contracts, I would not even be looking for investment or investors because I can use futures on AP and signed contracts to fund any of my capital expenditures on. Why would Braidy do this? Why are they giving away so much of their company value? Especially when it is listed in these articles that the state would own nearly 20% of the company? There is no business person in the world that would literally “give away” that much dilution of their company to a government agency with that much sales equity. As an entrepreneur, I might go up to 7% on par value of the company, but no more.
So again, Governor, where is the revenue? And even a larger question is, where are the company issued warrants which will provide some guarantee, that we the tax payer, will get that investment back in returned revenue?
The last huge question mark is the claim that this company will not even begin to produce products until 2020, but is only required to keep 51% of its assets in Kentucky, or, (and this is the real kicker), just maintaining a headquarters here in Kentucky until June 1st, 2022. The way this deal is structured there is no guarantee that this company will not just pick up and move to some other state or location after that date leaving workers without jobs and the tax payer holding the bag on a $15 Millions in investment with no real opportunity to get that returned.
If the tax payers are going to own 20% of a company with an investment of $15 Millions, we need that investment guaranteed for longer than just 2 years, and so do the workers who depend on those jobs.