Green Car Advisor

Would-Be EV Maker's 'Plan' to Save NUMMI Auto Plant a Long Shot at Best

Tesla Motors Already Rejected Idea of Using Sprawling Factory Because of its Size

nummi_building.jpgBy John O'Dell, Danny King and Scott Doggett

A California EV powertrain developer with a design but no cars, eight employees and big dreams has garnered a bit of publicity after announcing a "plan" to save the giant New United Motor Manufacturing Inc. plant near San Francisco and turn its 4,700 employees into electric-car builders.

We'd love to help lead the cheering, but we see an awful lot of obstacles to what seems at best a tenuous and barely developed proposal that's hanging on hope and hype rather than rooted in reality.

In its announcement, Aurica Motors said its plan calls for it to obtain an unspecified amount of money from federal economic stimulus program grants and loans to save the 48-year-old NUMMI plant - operated as a joint venture of General Motors and Toyota since 1984 - from being closed March 31.

It would use the money - which would have to total close to $1 billion - to refurbish and retool the plant to make Aurica EVs, thus saving the 4,700 jobs at the plant and, by extension, helping preserve the jobs of some of the "50,000 people [who] work for companies who supply the massive plant with parts and services."aurica_recurvedrive.jpg

Aurica has designed an electric-drive system that uses independently controlled electric motors in each of a car's four wheels, all tied together through a central computer.

All well and good, but consider:

  • Aurica Motors' general manager, Matt Pitagora, told us today that the company has no intent to actually buy or run NUMMI - it hopes that NUMMI's present management and employees will do some sort of employee buyout, then partner with Aurica to use the money Aurica hopes (there's that word again) to get from the feds to finance the retooling needed to turn it into an EV factory.
  • The company announced its "plan" this week, he said, largely in hope it would generate interest from local politicians and potential investors.
  • Aurica hopes to get production up to 50,000 cars a year by 2015, but one analyst we talked to says a plant that size would need to be churning out 150,000 vehicles annually to cover operating costs and post a profit.
  • Aurica is basing its hope for federal funding on the fact that two more-established companies, Tesla Motors and Fisker Automotive, last year received almost $1 billion between them from federal stimulus funds to refurbish existing factories for production of the Tesla Model S electric sedan and the Fisker "Project Nina" extended-range plug-in electric cars.
  • Aurica is a start-up, with uncertain funding, no track record and no working car. Pitagora says the company is a spin-off of Aurica Labs, a four-year-old R&D company owned and operated, and funded almost singlehandedly, by Greg Bender, a research physicist with a big interest in electronics and sustainable transportation.
  • None of the eight staff members at Aurica Motors have automotive industry experience; their backgrounds, Pitagoras said, are in electronics.
  • The company doesn't want to build a car - it has designed an electric powertrain, the Aurica Recurve, that it hopes to market to a partner or partners who would then build cars using the Aurica system.

The NUMMI plant is huge - 5.3 million square feet (approximately 380 acres), and the costs of keeping it running are massive. Not even Toyota - still a powerhouse despite its current problems with safety recalls and reputation - could justify keeping it up and running after GM pulled out of the partnership during its bankruptcy reorganization late last year.

The idea of using NUMMI as an EV assembly plant already has been considered - and rejected by a company with a lot better background than Aurica.

Tesla Motors' chief technical officer, J.B. Straubel, told Green Car Advisor several months ago that Tesla had been wooed as a NUMMI tenant by politicians and economic development people from the area in which the big plant draws most of its employees.

But Tesla - which has all of about 550 employees and plans to ramp up to around 2,000 when it starts building its next vehicle in 2012, the Model S electric sedan - took a look a the costs involved and rejected the idea out of hand.

The plant, said Straubel, is about 10 times the size of a facility Tesla would need to build even 20,000 cars a year.

The electricity bill alone for a 5.3-million-square-foot automotive manufacturing plant is likely to eat up $50 million or so per year.aurica_car.jpg

True, said Pitagora, the power costs for an auto plant are tremendous, but the State of California gave GM a big subsidy on power to help persuade it to build the plant and Aurica hopes a similar deal could be cut to keep the plant running now - although no one's talked to the state yet about doing such a deal.

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Sketch of a potential Aurica car, from company's Web site.

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Analysts who follow the auto industry say it'd be a long shot for Aurica to make a go of utilizing the entire plant.

With auto assembly line machinery needing to be so specialized for each car model, it'd be cheaper to start from scratch than to retrofit the factory, said Rebecca Lindland, director of automotive research at IHS Global Insight in Lexington, Mass. 

"This type of manufacturing is incredibly complex," said Lindland. "It's not just a simple matter of tearing out a row of machinery and putting a new row in."

Additionally, Bender's "plan" to save the 4,700 jobs at the plant implies that he'd operate at full capacity. While Pitagoras says Aurica hopes to see production of 50,000 cars a year by 2015, a plant as big as NUMMI  would require production of about 150,000 vehicles a year to cover operating costs and clear a profit, said Jim Hossack, consultant at Tustin, Calif.-based AutoPacific.

Still, with local governments looking to save jobs and federal stimulus money earmarked toward alternative automotive technology, securing funds to operate at least part of the plant may not be so far-fetched, said Hossack.

"It's like you and I saying, 'let's get into the airline business,' " said Hossack. "It just sounds unlikely to me. But I didn't think Fisker and Tesla would get a half billion dollars either."

If we haven't worn it out yet, we'll toss in that word one more time:  We won't be holding our collective breath, but we can certainly hope that Aurica's dream comes true.

O'Dell is senior editor of Green Car Advisor; King is a frequent contributor; Doggett is contributing editor.

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