Lincoln Parish expected to feel impact of start-up company
T. Scott Boatright, Reporter
06-18-2009
State leaders hope Wednesday will become known in the future as “VL Day” — as in victory in Louisiana day.
Gov. Bobby Jindal was in Monroe to help announce the new tenant of the former Guide Corp. facility, owned by Ruston’s James Davison. That new tenant says it plans on revolutionizing the American automobile industry.
Community Trust Bank President Drake Mills is involved with helping Davison manage the Guide Plant and said Lincoln Parish will feel future benefits from the start-up company.
“This is big,” Mills said. “Big for northeast Louisiana, big for the state as a whole and big for the entire country. For Louisiana, it gives the state the opportunity to be involved in fundamentally recreating the American automobile industry. The impact this is going to have on north Louisiana will be amazing.”
Jindal echoed Mills’ sentiments.
“We’re joined by some of the most revered names in American business to build the next great American car in northeast Louisiana,” Jindal said. “We’re here to announce an opportunity to transform the entire American auto industry and the economy of northeastern Louisiana. The concept is amazing, and the team behind the company is first class.”
San Diego-based V-Vehicle Co. will take over the vacant plant. The state put up an incentive package of $67 million from its megafund to fund improvements and expansion of the plant, while Monroe-area local governments put up another $15 million. The state also will add work force training from the state’s FastStart program valued at more than $12 million.
Former Oracle Corp. executive Frank Varasano, who founded VVC in 2006, said the company has applied for $340 million in loans from the federal government. The loans would come from a $25 billion pool of money approved by Congress in 2007 to spur automotive technology.
VVC Vice President Horst Metz said investors were proceeding with the plan, but the loans are key to the deal.
“If we don’t get them, we have to get the money somewhere else,” Metz said.
Metz said production will begin in about 18 months. Company and state officials said the plant will employ 1,400 people and will create another 1,800 nearby jobs indirectly.
Besides Davison and Varasano, investors in the project include the venture capital fund of Kleiner, Perkins Caufield & Byers and energy investor T. Boone Pickens, who has been pushing for increased use of wind-generated and other alternative power.
The car’s designer is Tom Matano, who designed the Mazda Miata and now works as VVC’s design director. Matano and other officials declined to discuss the style of or specifics about the car other than the company name. But Matano did say he believes it will be an iconic vehicle 25 years from now. VVC was founded in 2006 to produce a high-quality, environmentally friendly and fuel-efficient car for the U.S. market.
“The current business model is broken,” Varasano said. “It’s not working for manufacturers, suppliers, dealers or the American people. The industry has to change.”
Varasano said that 750 construction jobs will be available soon because the plant has to be expanded in size from 425,000 square feet to about 750,000.
He said support positions will be filled later this year, but most of the hiring for the permanent jobs won’t be made until fall 2010. Jindal said the average annual salary for positions at the plant would be around $40,000 plus benefits.
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