$50 Million Loan from Government gets only $3 million
Washington — Indiana-based AM General agreed to acquire the Michigan-based MV-1 wheelchair accessible vehicle funded by the Obama administration with a $50 million loan.
AM General said it had reached a deal with the U.S. Department of Energy to purchase the DOE’s secured loan to the Vehicle Production Group LLC. AM General bought the loan for $3 million.
VPG originally developed and manufactured the MV-1, the only U.S.-built vehicle specifically designed from the ground up to meet the needs of wheelchair passengers. Built in Mishawaka, Ind. by AM General at its former Hummer facility, the wheelchair-accessible vehicle ran on compressed natural gas or gasoline.
The Obama administration said it will lose money on the investment
. It previously recouped a $5 million reserve fund, so it’s not clear how much of the remaining $45 million it lost. But chances are it lost tens of millions of dollars, since there was little outside interest for the start-up. The Energy Department auctioned off its outstanding loan in recent weeks to exit the troubled investment.
“After exhausting any realistic possibility for a sale that might have protected our entire investment, the Department determined that auctioning the remainder of VPG’s loan obligation offered the best possible recovery for the taxpayer.
We are pleased that — consistent with the intent of the loan — AM General has committed to the continued production of these very popular, handicap-accessible, natural gas-powered fleet vehicles in Indiana. Their plant will continue operations, generating job opportunities for American workers and helping to establish a domestic manufacturing base for these advanced vehicles,” Energy spokesman Bill Gibbons said.
Via: Autos Insider
. It previously recouped a $5 million reserve fund, so it’s not clear how much of the remaining $45 million it lost. But chances are it lost tens of millions of dollars, since there was little outside interest for the start-up. The Energy Department auctioned off its outstanding loan in recent weeks to exit the troubled investment. in Indiana. Their plant will continue operations, generating job opportunities for American workers and helping to establish a domestic manufacturing base for these advanced vehicles,” Energy spokesman Bill Gibbons said.
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