State Taxpayers May Eat $1.6 Million Loan for Defunct Green Bus Company
In September of 2009, Fisher Coachworks was mentioned in a press release from Gov. Jennifer Granholm as a “green technology” company that was part of the “new energy economy for Michigan.” Two years later, the state says Fisher Coachworks is out of business and the state has to write off $1.6 million it loaned the electric bus manufacturing company.
Edgar Benning, general manager of Flint’s Mass Transportation Authority, said in an email that Fisher Coachworks went out of business in the development phase of making two $1.1 million electric buses that Flint was going to purchase with grants from the American Recovery and Reinvestment Act, commonly referred to as the “stimulus plan.”
Fischer Coachworks officials could not be reached for comment.
Michael Psarouthakis, vice president of business acceleration for the Michigan Economic Development Corp., said Fisher Coachworks would not repay $1.6 million in loans it had received from the state. The MEDC had approved Fisher Coachworks for a $2.6 million loan, but never gave out the final $1 million because the company was struggling, Psarouthakis said.
“It was clear that they were going to have some serious financial difficulties even with our funding,” Psarouthakis said. “They needed significant funding above and beyond that.”
James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy, said some green energy companies wouldn’t make it without government aid.
“Granholm opened the floodgates for any green business to get state money,” Hohman said. “This is her legacy. I think it is an important piece of the legacy that the businesses you are picking to win and whose business plans you support with state tax money wind up being big losers. That says some of these green energy business plans are likely to be facades held up with state support.”
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.