Solyndra Critic Support Fails to Win U.S. Loan for Carmaker

The support of House Energy and Commerce Committee Chairman Fred Upton, a critic of U.S. Energy Department lending, failed to win the startup carmaker Carbon Motors Corp. a loan to develop fuel-efficient police cars.

Upton, a Michigan Republican who is investigating U.S. financing for failed solar-panel maker Solyndra LLC, hosted a forum last year to connect his state’s suppliers with Connersville, Indiana-based Carbon Motors after talking with one of its engineers at a wedding.

“He said I will do whatever it takes to help this program succeed,” Stacy Stephens, chief brand officer for Carbon Motors, said in an interview. “He was specifically talking about the loan.”

Upton’s panel is studying the relationship between President Barack Obama’s administration and Solyndra, as well as the decision to grant the company a $535 million loan guarantee through another department program before it filed for bankruptcy protection last year.

The financing drew Republican criticism ahead of this year’s presidential election, and the agency hasn’t awarded any new vehicle program loans since the bankruptcy.

At least 14 members of Congress wrote letters to the Energy Department in support of Carbon Motors’s application for $310 million in financing from the Advanced Technology Vehicle Manufacturing loan program, one of three such initiatives the agency administers. Upton, who signed letters supporting applications from EcoMotors International, General Motors Co. and Chrysler LLC, wasn’t one of them.

‘Great Potential’

“Fred hosted a jobs fair last year to connect Michigan-based parts suppliers with an auto manufacturer in neighboring Indiana, Carbon Motors, as the company prepared to develop a new breed of public-safety vehicles,” said Sean Bonyun, a spokesman for Upton, who added that Upton didn’t request a loan. “This sort of regional manufacturing partnership, which happens without any federal financing or mandates, has great potential to support job creation at a time when Michigan needs it most.”

Carbon Motors said it wanted to deliver diesel-powered police cars getting 30 miles a gallon in three years, announced on March 7 that its loan application had been denied.

“We’d been through the process of writing out the agreement,” said Stephens, whose closely held employer has about 100 investors it doesn’t disclose and is responsible for about 200 direct and indirect jobs. “The week before we found out, they were telling us we just have some routine questions. And the next thing we know, we get the rejection letter. We didn’t even have a chance to respond.”

Ford Motor Co. and Fisker Automotive Inc. are among companies that received low-interest loans from the Energy Department’s program to spur development of electric and other fuel-efficient vehicles. General Motors and Chrysler withdrew their applications. The $25 billion program has awarded $8.4 billion in loan commitments.

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