Connersville progresses on Carbon Motors deal

Connersville Mayor Leonard Urban says the city soon will clear legal and environmental hurdles that stand in the way of
Carbon Motors’ launching its operations there.

Urban said recently that the city hopes to contract with a
firm that would assume liability for pollution on the former Visteon plant, where Carbon Motors wants to make its high-tech
police cars.

Although Atlanta-based Carbon Motors chose Connersville, it can’t yet make use of the 1.8-million-square-foot
factory vacated by Michigan-based Visteon in late 2007. Connersville wants to acquire the property and flip it to Carbon Motors
for a low price or at no cost.

If all the pieces fall into place, the startup company could employ 1,550 people
in three years. Connersville is counting on Carbon Motors to help pull Fayette County’s unemployment rate out of double
digits.

The process is complicated by the fact that Visteon, an auto-parts maker, is in bankruptcy.

Carbon
Motors spokesman Stacy Dean Stephens said the company won’t announce a timeline for the start of manufacturing until the legal
and environmental questions are resolved.

Urban said the city has identified an environmental liability transfer
firm in St. Louis, but needs approval from state agencies. He declined to discuss the deal in further detail.

Connersville,
or possibly the state, would pay a fee to transfer the liability. That fee could be close to the estimated cost of cleaning
up the Visteon site.

The Indiana Department of Environmental Management has estimated a maximum cleanup cost of
$4 million, a spokesman said. The cleanup work has already started.

Parties that want to buy contaminated sites
contract with liability transfer firms in order to shed the unknown risks and cleanup costs. The firms assume liability in
exchange for a fee. Liability transfer firms profit if they keep cleanup costs under the price of the contract.

The
legal and environmental issues surrounding the Visteon site also stand between Carbon Motors and state tax breaks. In July,
the company announced its plan to move to Connersville, even though it hadn’t struck a deal with the Indiana Economic
Development Corp.

IEDC spokeswoman Blair West said the agency would have no comment on its talks with Carbon Motors.

Choosing a manufacturing site is a chief requirement for a federal loan. Carbon Motors is seeking $310 million from
the Department of Energy’s Advanced Technology Vehicle Manufacturing Incentive program.

Stephens, a co-founder
and sales development manager, suggested Carbon Motors is confident about opening the plant. Asked whether the company’s
plans hinge on getting the federal loan, he said, “I’ve already relocated my family and have a home in Connersville,
if that tells you anything.”

Urban is taking Stephens’ move as a positive sign. “As far as we’re concerned,
we’re on a go.”

Please enable JavaScript to view this content.

Story Continues Below

Editor's note: You can comment on IBJ stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Please note our updated comment policy that will govern how comments are moderated.

{{ articles_remaining }}
Free {{ article_text }} Remaining
{{ articles_remaining }}
Free {{ article_text }} Remaining Article limit resets on
{{ count_down }}