Startup car company locating in Louisiana

MONROE, La. — A startup automobile company plans to assemble a new fuel-efficient car in Louisiana, employing an estimated 1,400 people once production starts, state and company officials announced Wednesday.

San Diego-based V-Vehicle Co. will take over a vacant plant in Monroe, Gov. Bobby Jindal said at a news conference.

The state put up an incentive package of $67 million to fund improvements and expansion of the plant, while Monroe-area local governments put up another $15 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 the investors were proceeding with the plan, but the loans “are very important. If we don’t get them, we have to get the money somewhere else.”

Metz said production would begin in about 18 months. Company and state officials said the plant would employ 1,400 people and would create hundreds more jobs nearby.

Besides Varasano, investors in the project include the venture capital fund of Kleiner, Perkins Caufield & Byers, energy investor T. Boone Pickens, who has been pushing for increased use of wind-generated and other alternative power, and Louisiana trucking magnate James Davison, who bought the vacant plant in 2007.

Company chairman Ray Lane said Varasano’s original concept was to build the car in China, but “it made more sense to build it in America and then it made even more sense to build it in Louisiana.”

The car’s designer is Tom Matano, who designed the Mazda Miata and now works as VVC’s design director. Matano would not discuss the style of the car, only saying he believes it will be an iconic vehicle in 25 years. Davison said the plant will produce midsize cars, but company officials refused to discuss any other details about the vehicle, including its projected price tag or fuel mileage prospects, or how a dealer network was being assembled.

Stephen Moret, the state’s economic development secretary, said details of the car were being kept secret for competitive reasons.

Metz said the plant did not expect to have a union, such as the United Auto Workers, but added “that is the choice of the employees.”

Auto plants have sprouted throughout the South since the 1990s. Mississippi snagged Nissan and Toyota plants, Mercedes Benz located in Alabama, South Carolina was chosen by BMW and General Motors Corp. picked a Tennessee site to build its Saturn models.

The choice of Monroe would give Louisiana its second auto assembly plant. GM assembles the Hummer line and Chevrolet and GMC pickup trucks at a plant in Shreveport.

Employment at the GM plant has been cut from a recent high of 3,000 employees to about 800 as the manufacturer suffered financially and new vehicle sales dropped dramatically. China’s Sichuan Tengzhong Heavy Industrial Machinery Co. has agreed to buy the Hummer brand and reportedly plans to shift additional production of Hummers from a plant in South Africa to Shreveport.

AP writer Alan Sayre in New Orleans contributed to this report.