Remember my assertion that it would be a cold day in Hades before an auto manufacturing plant comes to the Maritmes? Not so in the United States:
Louisiana governor Bobby Jindal has announced that San Diego-based V-Vehicle will create 1,400 new jobs and assemble an all-new vehicle in the state. This follows days of speculation about a significant auto assembly plant announcement in Monroe, in the northern portion of Louisiana.
VVC, as the company is also called, “wants to reestablish American leadership in the global automotive industry,” according to a Louisiana Economic Development (LED) info-sheet.
V-Vehicle was founded by ex Oracle Corp. executive VP Frank Varasano and is definitely not struggling to gather funds; it’s being financed by well-known California venture capitalists—including some also backing Fisker Automotive (Silicon Valley firm Kleiner Perkins Caufield & Byers)—along with T. Boone Pickens.
This type of project would be transformational in a place like New Brunswick or Nova Scotia but I just don’t see it happening.
Is it wise to start up new auto manufacturing in a world that already has a huge surplus of it, and virtually all of it is propped up by gov’t? We have to get in on the next boom, not the last one.
Good on them, at least private investors are realistic enough to see a winner in the new green economy when they see one.
Not sure Hatfield could.
Actually, the similarities to the Bricklyn are considerable here. There is $67 million going from Lousiana to the company, and that doesn’t include all the training and staffing that they will be supplying. The car also is not ‘green’, its simply ‘small’. GM has small cars, so does Ford. At this point there is no knowing what the success or failure will be. It’s one of those cases where if the car succeeds then its a template for ED, if it fails its an example of ‘corporate welfare’. A main reason that such a deal could not come to NB is that the building is already set up to make cars and ready to go, since it used to be a GM parts supplier. The building and land is also owned by one of the major investors-and that helps.
China’s automaker BYD, better known for its batteries for electronic gizmos entered the auto manufacturing world from scratch only 10 years ago. In December, 2008, BYD began selling a plug-in hybrid electric vehicle in China for the equivalent of about $22,000 (US), dramatically less than any Western manufacturer (http://tinyurl.com/mwytbb).
Once BYD decided that this was a market where they would be major players, their progress could best be characterized by a driving, foccused ambition to succeed with all barriers to that success as “temporary”. That and major investment by Berkshire Hathaway’s subsidiary, MidAmerican Energy Holdings, which bought a 10% stake in the BYD in September 2008.
lol
Who were the [non-governmental] angel investors in the Bricklyn deal?
Hey David, I guess I may have spoke to soon on your Nationals. Beat the Yankees last night, winning 3-0 in the fifth tonight!
I don’t know where the term ‘angel investors’ came from, but its ludicrous. This car is an investment vehicle, primarily for the co CEO of Oracle, I forget his name, but its probably in the article. He’s not doing it for philanthropic reasons, its to make money.
In Bricklyn, nobody invested as ‘angels’, but there were investors. The primary creditor was the First Pennsylvania Bank, and also Malcolm’s father Albert. There was also the GVI Design Group which had eastern european investors.
The province, at the end, was out $23 million, which is paltry compared to the regular buy in of 67 million here. But the similarities go even further. This is an ‘unproven’ automaker with no dealerships, just like the Bricklyn. It is an unproven company. It makes grandiose promises about a car not yet made (sound familiar).
But to paint more of a disstressing picture of New Brunswick, its notable that the unemployment rate at the time was about 25%, yet the assembly line was ‘manned’ mostly by women at one point because all the men left as soon as hunting season opened.
Another similarity is that this new design comes from the Miata car designer, but people forget that almost ALL the top level executives were former workers at Ford and GM. These guys were not unknowns. So it still remains to be seen whether this will be Louisiana’s Bricklin or not.
I don’t know where the term ‘angel investors’ came from, but its ludicrous.
Good one 😉
While I wish V-Vehicles the best of luck, I doubt that they will have it. Our state has a propensity to vilify any out of state firm as carpet baggers, even when they try (and often succeed in) helping us.
I am sure the Times-Picayune will hang them out to dry just weeks after they arrive like they have with so many others who have tried to help our economy and infrastructure. After 37 years in this state (yes I lived my first three years out of state) I still can’t figure out why this keeps happening.
Best of luck V-Vehicles – I will be pulling for you. I hope the rest of the state will be too.
Louisiana is pumping in something like 30 million in tax incentives.