Okay, So What Is The Real Deal?

[JEBar]

This has all the hallmarks of a classic scam.

I've noted in prior post that when I first looked into EM, my initial reaction was it had to be a scam/con .... getting people to spend up to $1,000 for nothing but a place in line sure seemed like it .... after doing more checking, I realized that the facts at hand didn't support my initial reaction .... the purpose of any scam/con is to make money .... the folks running EM show absolutely no indication of doing so .... some have put most everything they own into the company .... if EM should go under, they will be the ones who suffer the most .... we should see concrete indications within the the next few months that will tell us how its going to go

 

[eddie66]

LOCAL
LED: Risk

Henrietta Wildsmith/The Times

Manufacturing activity at the former General Motors Assembly Plant is more

SHREVEPORT – Louisiana Economic Development isn’t usually in the business of providing up-front infrastructure or relocation incentives to start-up business ventures such as Elio Motors.

The reason: risk management.

This means many budding companies will have to produce real jobs before they’re awarded state financial incentives.

“Startup companies commonly face challenges raising the funding needed to launch their projects. Accordingly, LED is careful to avoid placing state funds at risk with such firms,” said Stephen Moret, LED secretary, in an email to The Times.

Upfront incentives are not given to startup companies unless major national investors are behind them or a project is fully capitalized, Moret said.

In the case of Elio Motors, generating enough capital for production has been a difficult process. The company intends to manufacture its highly anticipated, cost efficient, 3-wheel vehicle. Elio Motors initially was expected to employ 1,500 people by the end of 2015.

The promise of well-paying manufacturing jobs led Caddo Parish’s Industrial Development Board to bankroll — to the tune of $7.5 million in public dollars — the purchase of the former General Motors assembly plant, where Elio is subleasing space from Industrial Realty Group.

IRG leases the building from the IDB.

Funding issues have plagued Elio Motors. The thousands of jobs promised for Caddo and Northwest Louisiana residents have yet to come to fruition. The company needs roughly an additional $230 million to start production.

The problem raises questions about why Caddo Parish bankrolled a start-up now struggling to get off the ground while state officials opted to wait for results.

LED and state officials are normally at the helm of major economic development announcements.

For example, Gov. Bobby Jindal and IBM executive Colleen Arnold stopped in Monroe on Monday to announce the company’s decision to build an applications center that would bring 400new jobs to the area.

But it’s been relatively quiet about Elio Motors.

There is nothing LED can do until the company has raised the capital it needs to move forward, Moret said. “LED has no control over the GM-Shreveport facility or arrangements between the parish and IRG.”

Scott Martinez,North Louisiana Economic Partnership president, said performance-based incentives are normal for companies with no record of sales.

“In general with start-up companies, it’s a risky proposition because there’s no history of job performance,” he said.

The risk, with regard to public dollars, is mitigated with performance-based incentives earned on the back-end, Martinez said.

While some disagree with the parish’s decision to finance the purchase of the former GM plant, Martinez said he believes Caddo acted in good faith to create jobs and use the property in a way that would benefit citizens.

The state wouldn’t give Elio incentives on the front end. However, state officials did offer a performance-based incentive package that includes the Competitive Projects Payroll Incentive and LED FastStart. The company would have to start production, create the jobs promised and meet certain goals.

CPPI provides annual 13 percent performance-based payroll rebates for each qualifying job for the first 10 years a company is in operation. The incentives are provided following the completion of each project year once the actual payroll for each year is verified.

“The total amount of CPPI payments depends upon actual wage levels and ramp-up schedule; because Elio hasn’t commenced with manufacturing, no funding has been provided to date,” Moret said.

During a January community meeting, Paul Elio, the company’s founder, announced another production delay — this time until the first half of 2016.

Elio also said he was selling surplus equipment in the facility to help raise capital for production. He also asserted the company’s effort obtain a $185 million U.S. Department of Energy Advanced Technology Vehicles Manufacturing loan was going well.

Bill Callen, spokesman for RACER Trust, said the trust and Elio have agreed to extend the company’s deadline to create 1,500 promised jobs until mid-2016.

“We believe that Elio Motors, while behind schedule, is taking the necessary and appropriate steps to overcome its challenges and start production,” Callen said.

The original deadline expired Feb. 1.

Most major economic development projects the state announces are the result of targeting a company or responding to a firm’s request, Moret said.

“The Elio project was unique in that their primary engagement with the local community and state was through RACER,” Moret wrote. “The project wasn’t spearheaded by LED, but LED did offer support, just as we would for any economic development project.”

Moret said state officials met with Elio Motors based on RACER’s recommendation. Callen said Elio approached RACER in February 2012 with interest in acquiring one of the former GM properties.

Callen said RACER seeks to align prospective purchasers with federal, state, local and private funding sources or incentives — though it’s not a party to any agreements between the state and Elio. Callenalso said RACER does not have financial interest in the facility.

“We do have an interest in the performance of our buyers here as at every site,” Callen said. “We are confident that new jobs will be created at the Shreveport plant.”

 

[John Painter]

Oh nooooooooooooo! you had to ask the question. LOL

I'm much less snarky when someone is legitimately psychotic and needs to talk.


"This has all the hallmarks of a classic scam."

 

[eliothegreat]

This has all the hallmarks of a classic scam.

Actually, no it doesn't. It has some of the hallmarks, but definitely not all of them. There is overwhelming evidence that elio wants to build the vehicle. They have put a lot of work into legislation, for instance. They have spent time and money on computer simulations and engineering.

On the other hand, they have engaged in advertising practices that are aggressive and over-optimistic at best, and quite misleading at worst. The have not engaged in any significant real-world building of prototypes or testing. They have repeatedly missed projections.

So, no, this is not a classic scam. People will lose their money the same as if it were a scam, but there is more to it than that.

 

[eliothegreat]

I fear one more delay will sink this whole project. I was thinking their contract to hire employees ended at the close of 2014 but today I heard on a phone interview (I think Ediie66 posted) that contract officially ended on February 1st 2015......

So, does that mean if they don't hire 1,500 employees by August 1st 2015 they'll have to pay the penalty of 7.5 Million? If so, I'm not feeling very fuzzy about actually ever getting to own an Elio. I mean if they have to hire employees by August and they're projecting mid 2016 for start of production, something don't add up ???

Maybe Goofyone could enlighten me (us) ???

Pure speculation here: I believe that paul elio is betting that, if he can get funding, and start hiring and production on any level, the Parish will waive the penalties, or extend the deadlines. I also believe that to be a reasonable gamble on his part. I don't think he will get the funding without giving up far more than a controlling interest in the company.

 

[eliothegreat]

I'm much less snarky when someone is legitimately psychotic and needs to talk.
<snip>

Speaking of bovine excrement... You keep posting on fb that there are four prototypes. Only three have been built. The P2 is the P1. They just added the body panels to the P1 and called it the P2. I admire your enthusiasm, but your research and fact-checking could stand a little work.

 

[outsydthebox]

This has all the hallmarks of a classic scam.

Hey Floyd, Welcome to the.....nevermind.

As we here have no authority to actually "lynch" genuine "scam artists", I recommend that you rush to your nearest FBI headquarters and report this travesty, Immediately!

 

[goofyone]

Speaking of bovine excrement... You keep posting on fb that there are four prototypes. Only three have been built. The P2 is the P1. They just added the body panels to the P1 and called it the P2. I admire your enthusiasm, but your research and fact-checking could stand a little work.

I believe we are back to enthusiast bovine excrement again. Before you attempt to correct someone else using such terms you should really have followed your own advice and done good research and fact checking. Had you done so you would have found out that the P2 is not actually just a body and interior simply slapped on the P1 chassis but instead involved changes to both the chassis and suspension configuration. As a result, while it started out as the P1 chassis, the P2 really does fully deserve its recognition as the second generation of EM vehicle prototype.

 

[eliothegreat]

I believe we are back to enthusiast bovine excrement again. Before you attempt to correct someone else using such terms you should really have followed your own advice and done good research and fact checking. Had you done so you would have found out that the P2 is not actually just a body and interior simply slapped on the P1 chassis but instead involved changes to both the chassis and suspension configuration. As a result, while it started out as the P1 chassis, the P2 really does fully deserve its recognition as the second generation of EM vehicle prototype.

It is the same vehicle. There have been three prototypes built. The P2 is a rework of the P1, not another vehicle. Recognized as round 2, yes. Recognized as a separate vehicle, no.

 

[goofyone]

It is the same vehicle. There have been three prototypes built. The P2 is a rework of the P1, not another vehicle. Recognized as round 2, yes. Recognized as a separate vehicle, no.

I am sorry to inform you however you are wrong yet again.

The fact is that there have been 4 prototype builds which resulted in 4 prototype generations being built. The fact that today there only exists 3 vehicles because the P2 was built using in part some of the P1 chassis and parts is simply an interesting factoid.

This can be easily demonstrated by the fact that had the very same P2 vehicle been built from the ground up with all new parts, and to the same specs, it would not be referred to as the second P1 build but this time with body panels. Instead it would be the P2 in recognition of the fact that considerable engineering changes were made to the chassis and suspension, reflecting lessons learned from the earlier build, as well as the fact that it was outfitted with an automotive style interior and exterior.