Taxpayer-backed van maker shuts down

A Michigan company that received a $50 million federal loan to make vans for the disabled has stopped production and laid off its 100 workers. 

Vehicle Production Group, or VPG, suspended operations in February after its finances dipped below a minimum level required as a condition of the federal loan. 

The Allen Park, Mich., company received the loan in 2011 under the same clean-energy program that provided a $529 million loan to electric car maker Fisker Automotive Inc. Fisker had received $192 million before a series of problems led U.S. officials to freeze the loan in 2011. The Obama administration seized $21 million from Fisker after the company laid off three-fourths of its workers last month. 

An Energy Department spokeswoman called VPG's suspension of operations "unfortunate," but said it was "the exception rather than the rule" for the loan program's portfolio of more than 30 clean-energy projects. 

The loan program "was always intended to involve taking some risks by supporting innovative and cutting edge technologies that hadn't been tried on a commercial scale before," said Aoife McCarthy, a DOE spokeswoman. 

Even with the Fisker and VPG losses, the program has spent only a small fraction of the money set aside by Congress to cover expected losses, McCarthy said. The DOE recouped $5 million from VPG last month, she said. 

John Walsh, VPG's former chief executive officer, said Thursday that the company was a victim of poor timing. 

"Sales took a little bit longer to get going" than expected, he said. "Cash got depleted." 

Walsh, who now works for a bus manufacturer, said the DOE loan was a small piece of the $400 million VPG raised, mostly through private investors like Washington-based Perseus LLC. 

Perseus Vice Chairman James Johnson is a major fundraiser for President Barack Obama, and he briefly headed Obama's vice presidential selection committee in 2008. A DOE spokesman said in 2011 that Johnson, a former CEO of housing mortgage giant Fannie Mae, played no role in persuading the Energy Department to award the loan to VPG. 

Before its collapse, VPG sold more than 2,000 wheelchair-accessible vans that were made at an Indiana plant that formerly made H2 Hummers. The plant is owned by AM General, which made the vans on a contract basis. AM General is considered a likely buyer for VPG. 

The company's main product, a van that costs about $39,000, has a built-in ramp for a person in a wheelchair. It also has room for a driver and three other passengers. 

About 25 percent of the VPG models run on compressed natural gas, a feature that helped the company win the DOE loan.

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Senators raise alarm over another possible sale of taxpayer-backed firm to Chinese

Republican senators complained Wednesday that U.S. taxpayer dollars could end up boosting the Chinese economy, following reports that a Chinese firm is leading the pack of companies bidding for a majority stake in government-backed Fisker Automotive. 

The troubled California-based electric car maker, which was backed by U.S. taxpayers to the tune of nearly $530 million, for months has been looking for a financial partner. Reuters reported earlier this week that China's Zhejiang Geely Holding Group is favored to take over, though Fisker is also reportedly weighing a bid from another Chinese auto maker. 

The development comes after Fisker's main battery supplier -- U.S. government-backed A123 Systems -- was recently purchased by a separate Chinese firm. 

Sens. John Thune, R-S.D., and Chuck Grassley, R-Iowa, voiced concern Wednesday that Chinese companies are benefiting from U.S. taxpayers' investment. 

"Obama's green energy investments appear to be nothing more than venture capital for eventual Chinese acquisitions," Thune said in a statement. "After stimulus-funded A123 was just acquired by a Chinese-based company, it's troubling to see that yet another struggling taxpayer-backed company might be purchased under duress by a Chinese company." 

Grassley added: "Like A123, this looks like another example of taxpayer dollars going to a failed experiment. Technology developed with American taxpayer subsidies should not be sold off to China." 

Despite the Reuters report, Fisker stressed that the bidding process is still very much open. 

"The company has received detailed proposals from multiple parties in different continents which are now being evaluated by the company and its advisors," Fisker spokesman Roger Ormisher said in a statement. 

The Obama administration also defended the Energy Department's overall loan program, which originally extended the nearly $530 million loan to Fisker in 2010. 

"The department's loan program invests in advanced hybrid electric vehicles because they have the potential to significantly improve performance and fuel economy for American consumers. Every one of these loans has strict conditions in place to protect taxpayers," department spokesman Bill Gibbons said. "The department is working with Fisker to determine the best path forward so the company can meet its benchmarks, produce cars and employ workers here in America." 

Fisker has tapped about $200 million of its U.S. government loan to date, while raising roughly $1 billion from the private sector. 

The company has run into daunting financial problems since the original loan. Last year, the Energy Department stopped disbursements on the loan because the company purportedly failed to meet production and sales goals on its electric plug-in sedan, the Karma. 

The lack of funds was followed by the company halting operations at a Delaware facility, a formerly abandoned General Motors plant. 

According to local news reports, the state of Delaware continues to pay utility bills for that facility while waiting for Fisker to resolve its financial situation. 

Fisker took another hit when A123 Systems filed for bankruptcy. 

Reuters reported that, according to one unnamed source, Fisker is looking to strike a deal for majority ownership by mid-March. 

FoxNews.com's Judson Berger and Fox News' Mike Emanuel contributed to this report.

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