Carbon Motors Files Bankruptcy

A prototype of the advanced police cars Carbon Motors had once planned to manufacture in Connersville. The company filed for bankruptcy last week.

file photo

(Connersville, Ind.) - Carbon Motors, once the recipient of a multi-million dollar grant from the City of Lawrenceburg, is filing for Chapter 7 bankruptcy.

The company had once hoped to open a high-tech police car plant at the vacant Visteon facility in Connersville. Starting with a big public announcement in 2009, the city, Fayette County, and the state had welcomed the prospect of the startup vehicle manufacturer creating more than 1,500 jobs.

Those plans all but fell through last year when the U.S. Department of Energy rejected Carbon Motors’ bid for a $310 million loan to finance the start of production. Company executives called the department’s rejection a political decision.

Then-Governor Mitch Daniels fumed at the federal loan denial.

“Companies like Carbon that might have proceeded and succeeded with a conventional business plan were seduced into wasting irreplaceable years chasing federal subsidies that never happened,” he said at the time.

According to documents filed Friday in U.S. Bankruptcy Court, the company has more than $21 million in liabilities and only around $18,000 in assets. After being rejected the federal loan, Carbon Motors CEO William Santana Li vowed to continue working towards getting the business Messmore.

Hoping to re-create the success of helping bring a Honda manufacturing plant to Greensburg, the City of Lawrenceburg’s 10-County Regional Grant Program awarded a $5 million grant to Carbon Motors in 2010.  A recent Indianapolis Star report showed that most of the money went towards vehicle engineering and improvements to the Visteon plant, however, about $400,000 was used to pay for executive salaries and travel.

In 2006, Lawrenceburg granted $10 million to the City of Greensburg, which has been viewed as a key factor in Honda’s decision to build a $550 million manufacturing facility of Interstate 74 which currently employs about 2,000 people.

The bankruptcy filing will protect Carbon Motors from any litigation, including a lawsuit earlier this year in which former executives claimed they were owed $600,000 in salaries.

LINKS:

Report Puts Magnifying Glass On L'burg Grant Program

Carbon Motors Denied Federal Loan