06/17/2009
New American Car Company Will Make History in Louisiana
V-Vehicle Company selects Monroe, La., to
begin assembling new automobiles and create 1,400 jobs
Today, Gov. Bobby Jindal and Louisiana Economic Development
Secretary Stephen Moret joined executives from V-Vehicle Company,
Kleiner Perkins Caufield & Byers, or KPCB, partners, local
businessmen and local officials to publicly announce that VVC, a
new American car company headquartered in San Diego, will begin
assembling cars in Monroe, La. The project will create over 1,400
direct jobs at an average annual salary of nearly $40,000, plus
benefits, as well as a capital investment of at least $248
million.
Participants at the announcement included Gov. Jindal; LED
Secretary Stephen Moret; V-Vehicle Founder and CEO Frank Varasano;
V-Vehicle Vice President Horst Metz; V-Vehicle Director of Design
Tom Matano; KPCB Managing Partner and V-Vehicle board member John
Doerr; KPCB Managing Partner and V-Vehicle board Chairman Ray Lane;
Guideco Properties LLC Owner James Davison; U.S. Rep. Rodney
Alexander; Monroe Mayor Jamie Mayo; West Monroe Mayor David Norris;
Ouachita Police Jury President Shane Smiley; and Ouachita Economic
Development Land Corp. President Ben Peters.
Gov. Jindal said, "What we are here to officially announce today
is not a typical economic development project. Most business
recruitment projects for the state involve large, long-established
companies building another plant similar to one they already have -
similar to facilities that other companies in their industry
already have. Those are great projects and we appreciate the jobs
they provide, but today's announcement is different.
"Today, we are here to announce that through quick, aggressive
action to pursue a transformative opportunity, we have a chance
here in Louisiana to re-energize the entire U.S. auto industry.
Indeed, this project also has the potential to transform the entire
Monroe area, and this project could be a game changer for the
economy of Northeast Louisiana.
"Some might argue that we should only invest in companies that
want to build the same factory they already have here in our state,
but every once in a while, we are presented with an opportunity to
throw long - to move the ball down the field in a major way with a
single transformational project.
"This is that kind of project we are here to announce today, and
for that reason we were willing to pursue an extraordinarily
aggressive approach to not only invest in a major economic
expansion for the people of Northeast Louisiana, but also a
transformational project for the U.S. automotive industry.
"By deciding to help re-energize and reinvent the American auto
industry in Louisiana, V-Vehicle is helping create a brighter
future for Northeast Louisiana, our entire state, and we hope soon,
our entire country."
"The thing that excites me the most about V-Vehicle Company is
that it is a holistic change," said Lane. "We're thinking about,
from beginning to end, how to reconstruct a car company. The
V-Vehicle Company has the opportunity to change the automotive
business in the United States."
"I am delighted to see our vision for a new American car company
coming to life here in Monroe, La.," said Varasano. "We've designed
and engineered this car from start to finish to give the U.S.
consumer a quality car with great value made right here in
America."
V-Vehicle will produce a high-quality, environmentally friendly
and fuel-efficient car for the U.S. market. The goal of the company
is to provide the American car buyer greater product value and a
superior automotive experience.
Matano, whose Mazda Miata design was recently recognized by
BusinessWeek as the most iconic car of the last 25 years
said that "this car will be another icon of American industry.
Miata was recognized as the iconic car of the last 25 years; this
will be the iconic car of the next 25. Not many designers have the
opportunity to work on such a project, so I'm really excited that I
have an opportunity to do another one."
V-Vehicle will assemble the cars at the former Guide Corp. plant
in Ouachita Parish, which has been closed for years. The
425,000-square-foot plant currently occupies 189 acres of land;
this project will increase the size of the facility to
approximately 750,000 square feet.
"The Monroe facility was chosen because it has the ideal
infrastructure for this type of industry, combined with the strong
work ethic of the people of North Louisiana," said Davison, who
owns the facility.
Economic Impact
An economic-impact analysis by LSU suggests that the VVC
facility will provide an injection of over $19.6 billion in new
state economic output from 2010 to 2024.
LSU estimates that the 1,400 direct, new on-site jobs will
create 1,800 indirect jobs for a total of 3,200 new jobs in
Louisiana. Accordingly, V-Vehicle will become one of Louisiana's
top 30 economic-driver firms based on direct and indirect job
impact.
LED engaged A.T. Kearney Inc., a leading global management
consulting firm with a large automotive industry practice, to
assess the market and economic viability of V-Vehicle's planned
operations in Monroe. A.T. Kearney concluded that V-Vehicle has a
compelling business model, an impressive leadership team, a strong
supplier base and financial projections for the Guide facility that
are reasonable and achievable.
Incentives
State and local officials assembled a customized incentive
package to help secure the project. If all performance requirements
are met, V-Vehicle will receive a state incentive package worth
approximately $67 million, which will fund improvements to and
expansion of the facility. In addition, Louisiana
FastStartTM will provide, at no cost to the company,
customized workforce recruitment, screening and training for
V-Vehicle and its on-site suppliers. LSU estimates that V-Vehicle
and its on-site suppliers will generate more than $131 million in
new state tax revenue over the first 15 years of the project.
"V-Vehicle has the potential to re-energize the American auto
industry, and they are going to accomplish that starting from a
manufacturing base in Louisiana," said Moret. "This announcement,
backed by some of our country's most visionary and successful
businessmen, will have a lasting impact on Northeast Louisiana and
our state for many years to come. And it sends a clear message that
Louisiana is a new frontier for business opportunity."
The city of Monroe, Ouachita Parish, city of West Monroe,
Ouachita Economic Development Land Corp. and I-20 Economic
Development Corp., collectively, have committed $15 million to the
project for improvements to and expansion of the Guide facility.
LSU estimates that V-Vehicle and its on-site suppliers will
generate $36 million in new local tax revenues over the first 15
years of the project.
"I want to thank the governor and Louisiana Economic Development
for their hard work in bringing this project to Northeast
Louisiana," said Norris. "Being selected for an investment of this
magnitude says something very positive about our community and our
state."
"Both the state of Louisiana and the local Ouachita Parish
community have seized upon a wonderful opportunity, which would not
have been possible without the superb cooperation of all parties
involved," said Peters.
The U.S. Commerce Department's Economic Development
Administration is expected to contribute up to $5 million for rail
and infrastructure improvements. V-Vehicle also has applied for
engineering and manufacturing loans under the Advanced Technology
Vehicle Manufacturing Loan Program, a $25 billion loan program
established by Congress in 2007 and administered by the U.S.
Department of Energy to spur innovation in automobile
technology.
Site Selection Competition
Starting in August 2008, KPMG carried out the site selection
process for V-Vehicle. According to V-Vehicle, Louisiana was
selected after KPMG and the company evaluated approximately 400
potential sites in 10 different states. Critical site selection
criteria included quality of the labor pool, availability of
customized workforce training programs, characteristics of
available sites and facilities, business taxes, electricity costs
and financial incentives.
Varasano noted that, "In the end, there were several states that
met our criteria and had very large incentive packages. In fact,
Louisiana did not have the largest incentive package. It was the
people from Louisiana - not just the leaders that we had met, that
we were working with - and the conviction that because of
incentives like the Louisiana FastStart program, we could identify
and train people that will ultimately determine a large part of our
success. It was the conviction that Louisiana could provide this
workforce that sealed the deal."
To strengthen Monroe's competitive position, state leaders
expect to use new and enhanced economic development programs
recently funded by Gov. Jindal and the Legislature. First,
Louisiana FastStart, a new turnkey workforce solution for new or
expanding companies, engendered confidence that qualified employees
can be recruited and trained quickly enough to meet V-Vehicle's
aggressive launch schedule. Second, recent increases to the Mega
Project Development Fund enabled the state to provide a competitive
incentive offer.
Investors
Private sector investors include the Silicon Valley venture
capital firm KPCB, T. Boone Pickens and James Davison, among
others.
KPCB has invested in entrepreneurs and new companies that have
gone on to redefine and revolutionize their industries. The venture
capital firm has provided pre-initial public offering funding to
leading Internet companies, pharmaceutical manufacturers, digital
media companies, software developers, electronics manufacturers and
data storage providers, such as Google, Amazon.com, Genentech,
Electronic Arts, Intel, Compaq and Sun Microsystems.
Referencing other KPCB investments, Doerr said, "These companies
that we've been privileged to work with and to help grow - the
Genentechs, the Compaqs, the Sun Microsystems, the Amazons, the
Googles, the Intuits with Quicken - they've all created tens of
thousands, and in some cases hundreds of thousands, of jobs. I
think that V-Vehicle Company has all the potential that any of
those companies have."
T. Boone Pickens is a successful businessman who has invested in
the energy industry since founding Mesa Petroleum in 1956.
Recently, he has invested in a proposal to reinvent U.S. energy
resources by promoting oil alternatives, such as natural gas, wind
power and solar energy.
Ruston, La., businessman James Davison is the owner of the
former Guide Corp. plant.
Background
Visit OpportunityLouisiana.com
to watch a brief video highlighting the vision behind
V-Vehicle.
