Another Government Backed Company Shuts Down image

Vehicle Production Group, another company which received a federal loan, stopped production and sent home most of its 100 workers in Michigan.

Vehicle Production Group is the latest company to receive a federal loan worth $50 million and the most recent setback for the green energy loan program supported by the Obama administration and aimed at encouraging emerging fuel-efficient technologies in the auto market. The administration offered loans valued $8.5 billion, before it stopped the rest of the loans.

VPG has not manufactured a single vehicle in the past six months due to its cash problems, similar to Fisker’s situation. CEO John Walsh, who ran the company from April 2012 until April 2013, sais that the company’s collapse came in late February.

“While this is unfortunate news about a very promising company, it is the exception rather than the rule for our portfolio of more than 30 projects that are supporting tens of thousands of American jobs and making our country more competitive,” said Energy Department spokeswoman Aoife McCarthy.

The $50-million loan was offered to help the company with the development of its six-passenger MV-1, a wheelchair accessible vehicle which ran on gasoline or compressed natural gas. Now the company looks for a buyer to help the automaker keep going.

Source: The Detroit News