New car maker picks Monroe for new plant

Northeast Louisiana has apparently landed a "big one," with announcement last month of plans to locate a new car assembly plant in a vacant industrial plant in the Monroe area.

Governor Bobby Jindal and Louisiana Economic Development (LED) Secretary Stephen Moret joined executives from V-Vehicle Company (VVC), Kleiner Perkins Caufield & Byers (KPCB) partners, local businessmen and local officials to announce that VVC, a new American car company headquartered in San Diego, will begin assembling cars in Monroe.

The project will create over 1,400 direct jobs at an average annual salary of nearly $40,000 plus benefits, as well as capital investment of at least $248 million.

The company declined to release any details of the actual vehicle to be built at the Monroe plant, with speculation that it would be an alternative or hybrid fuel vehicle.

One of the company executives, Tom Matano, director of design, worked on design of the Mazda Miata, leading to speculation among industry watchers that the new vehicle may resemble that popular sporty car. One industry-watcher speculated that the V-Vehicle will be fueled by Compressed Natural Gas (CNG). Another predicted a fuel-efficient gasoline powered car. The company will not say yet, indicating that any detail about the specifics of the design, fuel system, or other information could tip potential competitors. The CNG fuel option is rumored possible, based on a recent visit to Northeast Louisiana by T. Boone Pickens, to announce opening of a CNG processing plant in the Vernon gas field near Chatham. Pickens, a major operator in the oil, gas, and alternative fuel industry, is an investor in the V-Vehicle project.

The assembly plant will be located in the old GM Guide plant off Interstate 20 east of Monroe, which was recently acquired by Ruston businessman James Davison. The building is to expanded to house the V-Vehicle plant.

In his announcement speech, Governor Jindal said, "By deciding to help reenergize 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."

In addition to Governor Jindal, participants at the announcement included LED Secretary Stephen Moret; VVC Founder and CEO Frank Varasano; VVC Vice President Horst Metz; VVC Director of Design Tom Matano; KPCB Managing Partner and VVC Board Member John Doerr; KPCB Managing Partner and VVC Board Chairman Ray Lane; Guideco Properties LLC Owner James Davison; U.S. Congressman 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.

"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."

According to company announcement, VVC 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 and this will be the iconic car of the next 25.

VVC will assemble the cars at the former Guide Corp. plant in Ouachita Parish, which has been closed for years. The 425,000 square feet plant currently occupies 189 acres of land and this project will increase the size of the facility to approximately 750,000 square feet.

An economic-impact analysis by Louisiana State University (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, VVC 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 VVC's planned operations in Monroe. A.T. Kearney concluded that VVC 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.

State and local officials assembled a customized incentive package to help secure the project. If all performance requirements are met, VVC will receive a state incentive package worth approximately $67 million, which will fund improvements to and expansion of the facility. In addition, Louisiana FastStart will provide, at no cost to the company, customized workforce recruitment, screening and training for VVC and its on-site suppliers. LSU estimates that VVC and its on-site suppliers will generate more than $131 million in new state tax revenue over the first 15 years of the project.

The City of Monroe, Ouachita Parish, the City of West Monroe, the Ouachita Economic Development Land Corp. and the I-20 Economic Development Corp. collectively have committed $15 million to the project for improvements to and expansion of the Guideco facility. LSU estimates that VVC and its on-site suppliers will generate $36 million in new local tax revenues over the first 15 years of the project.

The U.S. Commerce Department's Economic Development Administration or EDA is expected to contribute up to $5 million for rail and infrastructure improvements. VVC also has applied engineering and manufacturing loans under the Advanced Technology Vehicle Manufacturing Loan Program (ATVM), 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. Starting in August 2008, KPMG carried out the site selection process for VVC. According to VVC, Louisiana was selected after KPMG and the company evaluated approximately 400 potential sites in 10 different states. Critical site-selection criteria included the quality of the labor pool, availability of customized workforce training programs, characteristics of available sites and facilities, business taxes, electricity costs, and financial incentives.

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.

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 the former Guide Corp. plant.

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