The latest company rejected by the Energy Department for loans under the struggling $25 billion auto retooling pogram is Carbon Motors Corp., a startup aiming to build fuel-efficient diesel police cars and take on Detroit’s automakers.
The Energy Department declared that the company will not be approved the $310 million loan under the Advanced Technology Vehicle Manufacturing that was created in 2007 and funded by Congress in 2008 with $7.5 billion to cover taxpayer losses. Other startup automakers have tried for years and spent millions of dollars trying to win a government loan, blaming for this the Obama administration’s concerns about political fallout from awarding loans to a company that could struggle.
The company said the failure to approve any new loans in two years “represents a glaring failure of the Obama Administration to create jobs that are clearly within its power to create.”
Carbon Motors closed a deal to buy diesel engines from BMW AG in 2010, purchased a 1.8-million-square-foot factory in Connersville previously owned by Visteon Corp., once a Ford Motor Co. subsidiary, and planned to add 1,550 jobs. The government has awarded four loans totaling $8.4 billion to Ford Motor Co., Nissan Motor Co. and startups Fisker Automotive and Tesla Motors. This month, Chrysler Group LLC abandoned its application for up to $3.5 billion in loans after the Energy Department proposed very restrictive terms and reduced the amount of the proposed loan to under $2 billion.