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Carbon Motors Denied Federal Loan

Posted On March 08, 2012
Carbon Motors

The E7 as dispalyed at a 2009 announcement by Carbon Motors at the former Visteon plant in Connersville.

(Connersville, Ind.) – It’s a huge letdown for the depressed town of Connersville, which three years ago appeared to have more than 1,500 new jobs on the way.

 

In 2009, Carbon Motors announced it planned to assemble an advanced, energy efficient police car known as the E7 at the former Visteon plant, which put hundreds out of work when it closed years earlier.

 

A $310 million loan from the U.S. Energy Department to Carbon was a key part of the deal to help the startup. The department said the loan has been denied after several years of discussions.

 

The company broke the bad news on its website Wednesday, calling it a political decision.

 

“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. Since Solyndra became politicized last fall, the DOE has failed to make any other loans under the ATVM program, has pulled back one loan that it previously committed and, as of this month, the DOE has pushed aside the three remaining viable loans under active consideration,” said William Santana Li, Carbon Motors chairman and chief executive officer.

 

Governor Mitch Daniels, who took part in the 2009 announcement, expressed his disappointment for the people of Connersville in a released statement Wednesday.

 

“It would have been far better if the federal government had never gone into the banking business,” Daniels said. “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. As President Reagan once said, ‘When you get in bed with the federal government, you get a lot more than a good night’s sleep.’”

 

Li said the quest to manufacture the advanced cars is not over. Having sourced $200 million in matching funds from a variety of private and state and local government sources, Carbon is examining its strategic and financing alternatives, he said.

 

Carbon said it had 20,000 reservations placed for the E7 by over 500 law enforcement agencies across the country. The company claims it would have employed 1,550 people in Connersville, leading to 10,000 more indirect jobs in the Fayette County community.

 

“Bureaucrats in Washington may view inaction as the safest bet for them personally, but those who are without jobs today in Connersville and facing a very uncertain future have a very different view,” said Li.

 

The full statement lashing out at the Energy Department can be found on Carbon Motors’ website, http://www.carbonmotors.com/news-releases/144/Carbon-Motors-ATVM-Loan-Caught-in-DOE-Political-Crossfire.