Good news for my old home town!!! 
Updated, 8;50 p.m.: New V Vehicle plant in Monroe; how the megafund factored in | thenewsstar.com | The News Star
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New V Vehicle plant in Monroe;
how the megafund factored in
By Greg Hilburn •
ghilburn@thenewsstar.com • June 17, 2009
Monroe, LA - Ouachita Parish could be the genesis for the transformation of the American auto industry, executives of the V Vehicle Co. predicted Wednesday while announcing the company's first plant and its 1,400 new jobs will be located at the former Guide Corp. facility.
V Vehicle Company CEO Frank Varasano announces a new auto
plant in Monroe on Wednesday, accompanied by Monroe Mayor
James Mayo, far left; Louisiana Gov. Bobby Jindal, right; and others.
(Margaret Croft/The News-Star)
But VVC chief executive Frank Varasano, Chairman Ray Lane and director of design Tom Matano revealed few other specifics about the car's design or business model, other than the company's name.
“We’re trying to be protective of the things we need to be (because of potential competition),” said Varasano, the project's visionary and former executive vice president of Oracle Corp. “We want to tell you about the car and distribution system all at once.”
But Gov. Bobby Jindal and economic development Secretary Stephen Moret said they know enough to commit $67 million toward the project from the state's megafund and work force training from the state's FastwStart program valued at more than $12 million.
“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 in front of more than 300 people at the plant just off of the Millhaven exit on Interstate 20.
“We’re here to announce an opportunity to transform the entire American auto industry and the economy of northeastern Louisiana,” the governor said. “The concept is amazing and the team behind the company is first class.”
Moret said the state commissioned an economic evaluation of the project from the consulting firm A.T. Kearney Inc. that concluded the project is viable.
“Based on the information provided by the Project Liberty leadership team, industry benchmarks, third-party market research, as well as our automotive expertise and analysis, we believe that Project Liberty has a compelling business model, and targets economics that are reasonable and achievable,” A.T. Kearney said in its report to Moret.
Varasano said hiring of selected positions could begin within a matter of weeks, but the bulk of the hiring won’t begin for 12 to 15 months.
The first of the mystery cars, which are expected to be gas-powered high mileage economy vehicles, are set to roll off the assembly line in Ouachita Parish near the end of next year after a $100 million expansion that will almost double the 425,000-square-foot facility.
Louisiana business mogul James Davison of Ruston owns the former Guide plant, which ceased production of head lamps in 2006.
Jindal and others said Davison helped drive the project to Ouachita Parish.
“James committed a tremendous amount of time and support to make this a success,” Jindal said. “Not only is he an investor, but a big booster of the region.”
“Maybe we’ve reborn the auto industry right here,” Davison said.
Lane and John Doerr of Kleiner Perkins Caufield & Byers are famed Silicon Valley venture capitalists who have raised $100 million to fund the company so far.
Among the investors: Oklahoma energy baron T. Boone Pickens.
Fifth District U.S. Rep. Rodney Alexander, R-Quitman, said he is working to secure a $263 million federal loan. Lane said the company’s goal is to raise $400 million to $500 million in capital through equity and loans.
Lane, the managing partner of KPCB, was previously president of Oracle Corp., while Doerr has backed such projects as Google and Amazon.
“(Kleiner Perkins Caufield & Byers) is the most well known and successful venture capital firm in the world,” Moret said.
Lane admitted any new start-up is risky, saying only one out of every 40 companies his firm backs experiences the success of a Google. “But we believe this project has that potential,” he said.
Matano, who designed the Mazda Miata in 1989, said he believes the new VVC car will make a similar splash.
“I feel strongly that this car will (also) be an icon in 20 years,” he said.
Jindal, who has seen the company’s concept car, was similarly optimistic.
“I told (Matano) that he had a great practice run (with the Miata), but his second car is going to be even better,” the governor said, laughing.
“We think the vehicle is spectacular,” Varasano said.
“This is probably one of the biggest decisions we’ll ever make,” Varasano said. “We’re counting on the people here to make it a success. We want you to be part of our team to make it a reality.”
Excerpts from Louisiana Gov. Bobby Jindal's speech
“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.”
V-Vehicle plant's 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, 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.
Who was there today
Participants at the announcement included Gov. Jindal; 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. 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.
LED already trumpeting plant
Louisiana Economic Deveopment has already posted information about the new V-Vehicle venture in Monroe, saying: "The New Louisiana is fully loaded."
The update includes company info and bios, a press release and a newly produced video. More here: ledlouisiana.com.
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