Elio Motors, would-be makers of the 3-wheeled Elio two-seater, may receive a boost that will give it the chance to purchase the shuttered General Motors plant in Louisiana that it’s been pining after.
The company has been making deposit payments to a trust which cares for the Shreveport General Motors assembly plant. Elio must make a closing payment by September 4th to retain its bid for the plant or risk losing it to auction. The final payment is beyond Elio’s reach, however, and the company has requested help from the Caddo Parish, who stands to gain from the jobs created.
Caddo, however, cannot directly invest in a startup business, according to its attorney, so the town must come up with a different plan if they want to get involved. An alternative would be for the parish to allocate money to purchase the plant themselves and then lease it to Elio through a third party.
The move could, politically and legally, be a problem for the parish. To purchase the plant, hand it over to an out-of-state management firm (in this case, they plan to use Industrial Realty Group from California, which has a track record of doing well with these sorts of arrangements) and dictate that the lease be then forwarded to Elio Motors could be seen as favoritism and may be challenged in court should other interests – such as property developers – wish to gain ownership of the land and facilities.
Elio would create up to 1,500 jobs were the plant to go live and begin producing the 3-wheeled cars, though, and commissioners on the parish board are seeing the $75 million in annual payroll as incentive to move forward. Others are not so sure, since if Elio fails, it would be a political football akin to the problems facing others when heavy government subsidization and investment in startups like Fisker Automotive and Aptera (another 3-wheeled car startup) failed to come to fruition, collapsing spectacularly in the press.
Concerns and thoughts on Caddo’s potential roundabout investment in Elio were aired in the local Shreveport Times paper (read that here).
The Elio is a popular concept and one that many, including myself, have said they’d like to see succeed. With the firm unable to raise enough outside funds – a mere $10 million at this point – to gain the assembly plant they require in order to build the car, though, my earlier concerns about the reality the company faces financially seem justified.
