TRIBAL MONEY AND LAND DRIVE MG TO OKLAHOMA

The Oklahoman newspaper reports that part of the reason Nanjing Automotive Group chose to locate its new US MG automobile assembly plant in Oklahoma was the availability of land and investment from affiliates of the Chickasaw Indian tribe.

In other words, "follow the money."

The Chickasaws, like many other Indian tribes in Oklahoma and elsewhere, are reaping huge profits from relatively new tribal casino operations. According to The Oklahoman report, the tribe wants to plow some of these profits into creation of a manufacturing and distribution hub at Ardmore Airpark, similar to Ross Perot's Alliance Airport project in the DFW area.

Tribal entities formed a group to buy the land and invest gambling profits in the MG project. Follow the money.

Under federal law, land owned by tribal entities is part of "Indian Country" and that may provide certain advantages to business operations conducted there. Current federal law and policy recognizes "tribal sovereignty," giving tribes the ability to skirt some state laws and regulations. The extent to which this may have played into Nanjing's calculations in unknown.

Idled plants in Oklahoma City, such as the shuttered GM plant and the huge former Western Electric / Lucent plant, or even MG's historic Longbridge, UK, plant are simply not as attractive as a greenfield site in "Indian country."

The Oklahoma plant also gives Nanjing a foothold in the US AND in the influential "tribal" lobby to obtain some shielding from future protectionist legislation, as well as permitting Nanjing to claim it creates "American" jobs in order to blunt criticism. It also provides a competitive hedge should the situation at Longbridge deteriorate (undoubtedly some in "labour" are less than excited at the prospect of a vastly reduced MG presence in the U.K.)

The rebirth of MG may be more of a "gamble" than was first apparent.