Hybrid maker Bright Automotive goes bust

@CNNMoney February 29, 2012: 3:02 PM ET
Hybrid vehicle maker Bright Automotive has announced plans to close, citing its inability to secure a loan from the Department of Energy.

A prototype of Bright Automotive's "Bright Idea" plug-in hybrid van, designed with an eye to big companies that buy vehicles in bulk.

NEW YORK (CNNMoney) -- Hybrid vehicle maker Bright Automotive has announced plans to close, blasting the Department of Energy for failing to finalize a loan that the firm says would have kept it afloat.

In a letter dated Tuesday to Energy Secretary Steven Chu, Bright CEO Reuben Munger and COO Mike Donoughe said they were withdrawing their application for a $314 million loan and winding down their operations. The executives claimed they had been strung along for the past few years as the government insisted on increasingly stringent loan requirements.

"The actions -- or better said 'lack of action' -- by your team means hundreds of great manufacturing and technical jobs ... and thousands of indirect jobs in Indiana and Michigan will not see the light of day," the letter said.

The Indiana-based company was founded in 2008 and had developed a prototype for a plug-in hybrid van, but had not yet begun manufacturing.

Energy Department spokesman Damien LaVera said the two sides could not come to an agreement "on terms that would protect the taxpayers."

"We understand that this is a difficult day for Bright Automotive and their workers," LaVera said in an email. "Over the last three years, the Department has worked with the company to try to negotiate a deal that supported their business while protecting the taxpayers."

Under a program authorized in 2007, the Energy Department offers loans for the production of energy-efficient vehicles, funding $8.4 billion in projects so far. Past beneficiaries include Tesla Motors (TSLA), which secured a $465 loan in 2010, and Ford (F, Fortune 500), which received $5.9 billion in 2009 for U.S. factory upgrades.

The auto loan program is part of a broader initiative by the DOE to support all manner of renewable, clean, and energy-efficient technologies. The initiative, which goes back to 2005 but was expanded under the stimulus plan in 2009, has funded over $34 billion in projects so far.

The Energy Department's loan portfolio has come under scrutiny of late, however, following the failure last year of solar cell manufacturer Solyndra, which went bankrupt despite a $535 million loan guarantee from the government. To top of page

Find Your Next Car

Get the latest car news:

CNNMoney Sponsors

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.