In the four-plus years since the bankruptcy trust charged with leveraging former General Motors automotive assets into new jobs handed over ALL of the former GM Shreveport plant to Paul Elio, two things by now should be clearly understood.
1. Elio Motors was never a good or viable idea and never should have been given the exclusive option to purchase both the moveable and immovable property at the Shreveport plant. Paul Elio has an interesting vision for the future of automotive transportation. But that vision should be incubating in his garage, not in a publicly owned state-of-the-art manufacturing facility.
The only reason the plant and its assets were available to be leveraged in the public’s interest is because of the public’s role in the 2009 federal financial bailout out of GM. The move and a structured bankruptcy called for the creation of a trust to take possession of the GM properties, but the properties would not be a part of the post-bankruptcy or new GM. That trust was seeded with over $500 million and charged with cleaning up and leveraging 91 former GM properties to replace the jobs lost in the communities where they are located.
That has never happened in Shreveport, location of the best of the shut-down GM plants. At the time of its Dec. 1, 2012, shutdown, it was considered to be one of the most modern automotive plants in America. Despite this immense potential, the leadership of the bankruptcy trust charged with replacing our lost jobs quickly and exclusively zeroed in on Elio Motors and eventually added real estate magnate Stuart Lichter to the mix.
Despite a self-stated obligation to protect local communities from what they called “dreamers and schemers,” the bankruptcy trust officials, in coordination with some of our locals, advanced a narrative that basically said, “Go along with Elio and Lichter or we’ll demolish the plant for scrap value.”
In the 4-1/2 years since the January 2013 announcement of 1,500 direct Elio Motors manufacturing jobs, not a single vehicle has been manufactured in Shreveport. And based on the most recent Securities and Exchange Commission filings by Elio, none ever will be.
There has been no successful internal combustion engine automotive start-up in America since the first half of the 20th century. Betting the job-generating potential of the most modern manufacturing facility in the country on one man’s Quixotic fantasy should never have happened.
During this same time, the American automotive manufacturing sector rebounded to record levels, while other sectors of manufacturing saw significant increases as well.
Because of the actions and directives of the very people charged with replacing our lost jobs, the most modern automotive plant in America has sat vacant, had much of its best equipment sold for pennies on the dollar by Paul Elio, and despite now-public ownership, is unilaterally controlled by an out-of-town billionaire.
2. The current lease of the plant to Stuart Lichter is only a good idea only if you accept and believe that a 3.9 million square feet state-of-the-art manufacturing space that is sitting on almost 600 acres of land that’s adjacent to excellent roads and an expansive rail spur is only worth $7.5 million dollars.
The truth is, it’s worth way more than that. GM spent almost $2 billion on expansion and upgrades just over a decade ago. Lichter’s lease allows him to own the whole plant, lock, stock and barrel, once his lease payments total the $7.5 million that the people of Caddo Parish paid for the plant.
Some contend that because Lichter’s lease calls for him to cover the carrying costs associated with the former GM plant that this is an acceptable deal.
That point would have merit if those who advocated for a process that both rescued the domestic automotive industry and for effective repurposing of left-behind assets had not already taken such issues into consideration. That’s one of the reasons why the bankruptcy trust was seeded with over $500 million dollars.
These two points clearly illustrate why the status quo is unacceptable and why further action is necessary to correct what we all should view and accept as an egregious wrong against the people of Caddo parish and the state of Louisiana.
Rep. Cedric Glover (D-Shreveport)
House of Representatives Dist. 4