Michael Giberson
In other transportation alternatives news, Bright Automotive is folding after spending $15 over four years in an effort to secure a $450 million low-interest loan from the U.S. Department of Energy through the Advanced Technology Vehicles Manufacturing Loan Program.
The Advanced Technology Vehicles Manufacturing Loan Program was created in the Energy Independence and Security Act of 2007. The law passed in December, and a month later the company was formed. According to the company website:
In January 2008, Bright Automotive launched from Colorado-based Rocky Mountain Institute (RMI) with the goal of building on the work of a consortium of organizations to map an automotive solution to tackle the challenges of our economy, air pollution and diminishing oil supplies.
Enter: Bright Automotive
We are an American company comprised of automotive entrepreneurs, including some of the most experienced hybrid-electric vehicle and battery pack engineers in the industry. We created in less than 12 months what some automotive companies take years to achieve: an all-new, efficient, plug-in hybrid electric vehicle that customers want to buy and can afford.
It is efficient, customers want to buy it, customers can afford it, so what could possibly go wrong? This, from news reports:
After failing to secure a federal loan to finance its operation and production costs to build a hybrid delivery vehicle, Bright Automotive said Tuesday that it will cease operations….
“Bright has not been explicitly rejected by the DOE; rather we have been forced to say ‘uncle.’ As a result, we are winding down our operations,” Bright CEO Reuban Munger and Chief Operating Officer Mike Donoughe said in a scathing letter to Energy Secretary Steven Chu.
The company spent three years and $15 million negotiating with the DOE for the loan, said Michael Brylawski, vice president of corporate strategy. Each time the company submitted a proposal, he said, the government responded with more onerous requirements. […]
“Last week, we received the fourth ‘near final’ Conditional Commitment Letter since September 2010. Each new letter arrived with more onerous terms than the last,” Munger and Donoughe wrote. “The first three were workable for us, but the last was so outlandish that the most rational and objective persons would likely conclude that your team was negotiating in bad faith.” […]
In November 2010, Bright officials announced the opening of a research plant in Rochester Hills and, a year later, a production facility in Mishawaka.
Neither choice was in Bright’s original loan application, Brylawski said. The company’s original plan was to locate all its facilities at the Flagship Business Center.
“We were told by the DOE in August 2010 that Bright would get the ATVM loan ‘within weeks, not months’ after we formed a strategic partnership with General Motors (Corp.) as the DOE had urged us to do,” the two executives wrote.
“We lined up and agreed to private capital commitments exceeding $200 million — a far greater percentage than previous DOE loan applicants. Finally, we signed definitive agreements with state-of-the-art manufacturer AM General that would have employed more than 400 union workers in a facility that recently laid-off 350 workers.”
And then the company waited.
“We continued to play by the rules, even as you and your team were changing those rules constantly — seemingly on a whim,” the letter said.
Obviously the “efficient,” “customers want to buy it,” and “customers can afford it” claims stretched the truth just a bit, else sometime in the last four years they would have found a willing investor. Instead, the project lived on dreams of a federal loan and died when the company woke up to reality.