Pickens To Fund New Car Company In Lousiana

Toronto, June 17, 2009: According to Canada.com, a new carmaker called V-Vehicle Co. is announcing plans this afternoon to build high-mileage car at an idled auto factory in Louisiana.

A former designer of Mazda’s Miata car is involved in the new company, which is being financed by California venture capitalists as well as Texas billionaire T. Boone Pickens, according to local reports. Mr. Pickens is the founder of BP Capital Management and has launched a much-publicized campaign to boost the use of natural gas-powered vehicles in North America.

V-Vehicle’s founder and chief executive, Frank Verasano, was executive vice-president of Oracle Corp. from 1999 to 2001.

San Diego, California-based V-Vehicle is pledging to create 1,400 jobs at the former Guide Corp. plant in Ouachita Parish. Workers will earn an average of US$40,000 a year, the state’s top economic development official said.

Several automakers have located assembly factories in the U.S. South in recent years, including Mercedes-Benz and Volkswagen AG. Manufacturers are attracted to the area because of lower energy costs and taxes, cheaper land and the lack of organized labour.

That contrasts with the U.S. northeast and Canada, where GM and Chrysler in particular have been pulling back their footprints and renegotiating labour contracts they concluded were too onerous.

The new company launches at a time when new vehicles sales in the United States are at 20-year lows.