A Michigan van maker that received $50 million in loan money from the Department of Energy has stopped operations and laid off 100 staff members.
DOE awarded Vehicle Production Group (VPG), which made wheelchair-accessible vans powered by natural gas, a $50 million loan in 2010 under the beleaguered Advanced Technology Vehicles Manufacturing (ATVM) Loan Program.
Although the company has not filed for bankruptcy, VPG has closed its office and laid off its staff. The shutdown followed the government’s decision to freeze VPG’s assets after the company failed to meet benchmarks conditional to the terms of the loan, USA Today reports:
Walsh, who left VPG with the rest of the staff when it closed in February, says the company had raised $400 million in private capital from such notable investors as financier T. Boone Pickens and built 2,500 MV-1 vans. Though VPG still had a healthy order backlog, it ran low on cash and didn’t have the dealer network that it needed. […]
VPG stopped operations after its assets were frozen by the Energy Department, he says. “They wanted us to get the remaining capital raised and we couldn’t get it done,” he says. The company did not announce the suspension of operations. An Energy Department spokesman could not be reached for comment, although the agency has stepped in before when borrowers fell short of expectations: Fisker was cut off after $190 million.
VPG’s DOE loan was controversial. In 2011, the Washington Post raised questions about a fundraiser for President Obama and and the loan. It reported VPG was part of the portfolio of companies under Washington, D.C., -based investment firm Perseus whose vice chairman, James Johnson, was an adviser and fundraiser to President Obama. Perseus said at the time that Johnson played no role in procuring the loan for VPG. The Energy Department said at the time that the loan was based entirely on its merit after two years of review.