Carbon Motors says DOE won't give it $310M loan

March 7, 2012

Carbon Motors Corp., which hoped to create hundreds of jobs and thousands of high-tech, fuel-efficient police cars in Indiana, announced a major setback Wednesday.

The Connersville-based company said the U.S. Department of Energy has “indicated that it will not proceed with Carbon's $310 million application for a direct loan under the Advanced Technology Vehicle Manufacturing, or ATVM, program.

Carbon Motors was counting on the loan to establish a major manufacturing plant in Indiana.

The company, founded in Georgia, announced in 2009 that it had selected the Fayette County community of Connersville in mideastern Indiana to manufacture its police cruiser in a 1.8-million-square-foot facility formerly occupied by Visteon Corp. The company said it could ultimately employ more than 1,500 workers. (See video below for a tour of the cruiser's prototype.)



Carbon Motors said it had working under the assumption it would receive the loan for almost 30 months. But public and political outrage over $525 million in loan defaults by California-based solar panel maker Solyndra LLC has put the ATVM program on hold.

Solyndra became the first alternative energy company to receive a loan guarantee under the stimulus-loan program that President Barack Obama promoted. After the company went bankrupt in September, Republicans seized on it to criticize Obama.

“We are outraged by the actions of the DOE and it is clear that this was a political decision in a highly-charged, election year environment,” CEO William Santana Li said in a prepared statement. “Since Solyndra became politicized last fall, the DOE has failed to make any other loans under the ATVM program …"

Li said Anderson-based Bright Automotive, General Motors, Chrysler, Next Auto, Aptera all have been hurt by the DOE’s loan process. Bright called it quits late last month after it gave up on receiving a $450 million DOE loan.

"Each of these applicants has been caught for several years in a costly and extensive DOE due-diligence process,” Li said. “Carbon Motors simply appears to be the last victim of this political gamesmanship.”

The company said it had lined up an additional $200 million in loans based on the DOE loan receiving approval.

Carbon Motors said “is actively examining its strategic and financing alternatives” to continue its goals as a company.

Indiana Gov. Mitch Daniels said he was "deeply disappointed for the people of Connersville and those who tried to bring this promising business here."

"It would have been far better if the federal government had never gone into the banking business. Companies like Carbon that might have proceeded and succeeded with a conventional business plan were seduced into wasting irreplaceable years chasing federal subsidies that never happened," Daniels said.
 

ADVERTISEMENT

Recent Articles by IBJ Staff and Associated Press

Comments powered by Disqus