Next Autoworks to restructure operations after failing to secure $320M loan

Article by Christian A., on December 22, 2011

After failing to secure a $320 million government loan in November, fledgling vehicle manufacturer Next Autoworks will reduce its number of employees, shut down its San Diego headquarters and consolidate into its suburban Detroit technical center, Kathleen Ligocki, CEO of Next Autoworks, discloses.

The automaker had sought financing from the a U.S. Department of Energy loan program in order to start manufacturing a low-cost, efficient small vehicle at a facility in Monroe, La., previously owned by General Motors. In a company statement published in November, the automaker revealed that it withdrew its application after knowing that it would not be approved due to "political and credit-risk concerns" that involve startup companies.

The government agency has previously denied an earlier loan application from Next Autoworks in March 2010. With the decline of its loan application, the automaker found it necessary to restructure its operations and evaluate strategic alternatives, Ligocki told Automotive News in a statement.

The automaker had successfully secured funds earlier from major players in the venture capital industry such as Google Ventures, T. Boone Pickens and Kleiner Perkins Caufield & Byers. Next Autoworks is the second startup vehicle manufacturer to publicize that its business plans were impeded by a lack of funding. On December 2, Carlsbad, Calif.-based Aptera Motors disclosed that it would liquidate after it was unable to obtain private-sector funding to manufacture a midsized electric sedan. It had also sought a Department of Energy loan. [source: Autonews]

Topics: united states

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