Could Trump tariffs revive U.S. factory visions, like this Philly steel man’s cheap electric car plan?
Barry Bernsten gave up, but he says a new generation of factory builders might use tariffs to rebuild American manufacturing.
Backed by new tariffs on archrival China, President Donald Trump’s administration says it’s time for America’s industrial dreamers to invest here at home in factories of the future.
It’s too late for Barry Bernsten, a Society Hill-based steel trader and international steel-mill builder who in the late 2000s projected a string of U.S. plants assembling electric cars at affordable prices — $16,000 new — in any state that would help build them.
Bernsten never got his factories. But his attempt sheds light on what it takes to resurrect mass-market manufacturing in a nation that has moved on from the basic industries that once made it rich.
His company, BG Automotive, launched in 2008 during the Great Recession. Private capital was scarce. But the Obama administration found hundreds of millions of dollars each to pump into Tesla and Fisker, American companies that hoped to build electric luxury cars, and into other emerging industries.
Some of it worked. While Fisker and other high-end electric-vehicle makers went bankrupt, by 2020 Tesla was the most valuable carmaker in the world, though its sales have lately fallen. Bernsten wanted federal funding, too, but couldn’t get any.
Bernsten believed there ought to be room not just for high-end hybrid sports models, but for a working people’s electric car.
He had a Bucks County engineer develop an electric motor. He sourced batteries to East Penn Manufacturing Corp. in Berks County and welded chassis from China’s Chery Automobile, which at the time had a well-known overproduction problem, like much of that nation’s state-backed export industry.
“Chery had excess capacity of 300,000 units a year,” Bernsten recounted from Colorado, where he’s planning his retirement. “We were going to bring it here and reinforce it to meet the crash test standards of North America.
“Even with the inefficient, heavy batteries of those days, we still got 75 or 80 miles from a charge, enough for any suburban person to drive the kids to school, shopping, the YMCA, a sporting event. The average person only drives 35-40 miles a day. You’d plug it in overnight. Today, we’d get 250 miles on a charge, easily.
“We had the know-how. My engineer up in Bensalem had his own shop. He assembled electric motors as fast as I could get him the parts.”
Bernsten wasn’t content to make the kind of state-approved, low-speed Neighborhood Electric Vehicles (NEVs) — essentially souped-up golf carts — that became popular at Florida and Colorado resorts.
He wanted a car his neighbors could spin around the city and the nearby suburbs and could stand up to I-95 and the Schuylkill Expressway as needed.
At the time, Bernsten expressed frustration that Tesla and Fisker, which still had no prototypes, were getting massive U.S. Department of Energy investments while his more modest plan to serve a wider range of customers couldn’t get similar financing.
Turning to recession-wracked states desperate for the hundreds of assembly jobs each BG factory promised, Bernsten got then-Delaware Gov. Jack Markell and the governors of Connecticut, Massachusetts, and Nevada among others to take the wheel in his bright green prototype.
“We got ‘em out of their offices,” Bernsten recalled cheerfully. “The states offered $300,000, $400,000. But we needed millions.”
No state would commit the millions Bernsten as an independent factory developer needed for engineering studies.
Delaware did burn through $20 million in a failed attempt to get U.S.-backed Fisker to restart a closed GM plant outside Wilmington. That site is now Amazon’s largest warehouse, also state-subsidized.
The real problem, Bernsten now admits, was his unwillingness in “tight money” times to give up his steel business and devote himself to full-time, go-for-broke fundraising.
“In hindsight I should have gone out to four or five guys and raised $10 million [privately] for the engineering studies,” he now says.
Other countries have embraced the small, affordable model: India swarms with electric Tatas. Factories in Romania, Poland, and Czechia have been making roadworthy electrics. Small Nissan hybrid trucks are catching on in Mexico. China is shipping electric BYD cars to 70 countries, not including the U.S.
Meanwhile, in the United States, cheap electric cars-about-town are still a dream. GM shut down its Volt and Bolt lines, and Ford focuses on electric trucks and sports cars.
Is it finally time?
The Trump administration says it wants to reindustrialize the U.S., making it easier for visionaries to persuade investors to bet on making cars and other complex products here.
“A lot of overseas companies say they want to build here now” under the threat of Trump tariffs, Bernsten said.
It would be hard to restart his plan to use China-built car bodies, since stiff new tariffs escalate the cost of using China products in a U.S.-assembled car.
Even if mass-market manufacturers can raise capital and source parts for new U.S. plants, would they find American workers ready for factory jobs?
Back in the Great Recession when unemployment peaked at two and a half times the recent 4%, “labor was not a problem,” Bernsten said. But these days, with U.S. employment at record levels, higher-paying industrial employers including Pennsylvania steel mills, the Hanwha Philly Shipyard, and building-trades apprentice programs have all struggled to recruit young workers.
If investors build factories today, “they will find the labor eventually overseas,” Bernsten predicted. Though that could conflict with another part of the Trump agenda — restricting immigration.