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USA: Energy Department rejects another auto loan request

Washington -Carbon Motors Corp., a startup aiming to build fuel-efficient diesel police cars and take on Detroit’s automakers, is the latest company to be rejected by the Energy Department for loans under the struggling $25 billion auto retooling program.

The privately held Connersville, Ind., company said the Energy Department informed the company it will not approve its request for $310 million 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.

Several startup automakers say they have spent millions of dollars, and in some cases, years, trying to win government loans. They accuse the Obama administration of refusing to approve any new loans because of concerns about political fallout from awarding loans to a company that could struggle — especially in a presidential election year.

Republicans have seized on the fact that solar-panel startup Solyndra LLC filed for bankruptcy putting 1,100 people out of work — a move that could cost taxpayers the $528 million they loaned the California firm.

“We are outraged by the actions of the DOE and it is clear that this was a political decision in a highly charged, election year environment. Since Solyndra became politicized last fall, the DOE has failed to make any other loans under the ATVM program, has pulled back one loan that it previously committed and, as of this month, the DOE has pushed aside the three remaining viable loans under active consideration,” said William Santana Li, a former Ford executive and chairman and CEO of Carbon Motors. “Each of these applicants has been caught for several years in a costly and extensive DOE due diligence process. Carbon Motors simply appears to be the last victim of this political gamesmanship.”

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.”
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