Another Car Company That Got A Federal Loan Is Shutting Down
The Vehicle Production Group, aka VPG Autos, produced the MV-1, a six passenger wheelchair-accessible van that can run on gasoline or environmentally-friendly compressed
It stopped operations after the DOE froze its access to federal money, when its finances fell below the threshold required by the loan, according to Bloomberg.
The DOE "wanted us to get the remaining capital raised and we couldn't get it done," former CEO John Walsh told USA Today.
The problem, he said, was not lack of orders for the MV-1, but cash flow.
The small automaker has not filed for bankruptcy.
The loan was approved in March 2011, under the DOE's Advanced Technology Vehicles Manufacturing program, created by the 2007 Energy Independence and Security Act to allocate $25 billion to fund highly fuel-efficient vehicles.
Other loan recipients include relatively successful Tesla Motors and defunct Fisker Automotive, which is in deep financial distress.
According to the DOE, the $50 million for VPG should have created 900 permanent jobs and taken 12,200 tons of carbon dioxide out of the atmosphere annually. The automaker was supposed to build as many as 22,000 vehicles every year (counting compressed natural gas and gasoline models).
Just six months ago, VPG seemed to be in solid shape. Between September 2011 and October 2012, it produced over 2,500 MV-1s, more vehicles than Tesla made in the same period, according to John Voelcker at Green Car Reports.
A Department of Energy spokesperson did not respond to a request for comment, and calling the phone number listed for VPG Autos led to an "after hours voicemail system."
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