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Bright Automotive to Cease Plans to Create Green Vehicle, Adds Jobs in Rochester Hills

The company had been awaiting a government loan to build the Bright IDEA hybrid vehicle and bring more than 200 jobs to the city.

Bright Automotive, a startup hybrid electric vehicle company that had planned to invest $12 million and create more than 200 jobs in Rochester Hills, says the government has forced the company to cry "uncle" and shut down operations.

The Indiana-based company, which in 2010 received tax credits from the Michigan Economic Growth Authority and a matching tax exemption from the city of Rochester Hills, was awaiting a loan from the Advanced Technology Vehicle Manufacturing Program, a $25 billion program created by Congress in 2008 to advanced President Obama's goal to create green auto jobs.

In total, more than 100 companies applied for $42.7 billion in loans. But just $8 billion has been awarded, and the loan program has received criticism from members of Congress and CEOs.

in the former Chrysler tech center off Hamlin Road in Rochester Hills. The plan was to design and test its Bright IDEA, a 100-mpg plug-in hybrid electric vehicle commercial fleet van.

After several persuasive letters to U.S. Energy Secretary Steven Chu and his department urging the awarding of the loan, Bright executives wrote a final letter to Chu dated Tuesday, announcing its plans to withdraw the loan application and close up.

"Bright has not been explicitly rejected by the DOE; rather, we have been forced to say 'uncle.' As a result, we are winding down our operations," CEO Reuben Munger and COO Mike Donoughe wrote.

The letter (attached as a PDF file) went on to say the company has received a series of "conditional commitment" letters from the energy department, each one including more "onerous terms than the last."

"The first three were workable for us, but the last was so outlandish that most rational and objective persons would likely conclude that your team was negotiating in bad faith," the letter stated.

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

"For us, this is a particularly sad day for our employees and their families, as well as the employees and families of our partners."

Rochester Hills Mayor Bryan Barnett said he personally spoke with Chu while in Washington, DC, last year, urging him to approve the Bright loan.

The project was estimated to generate new taxes in the city from a planned $12 million investment in personal property — computers, software and other equipment.

Erin February 29, 2012 at 07:22 PM
This is beyond frustrating, and a sad, unnecessary loss for our city. I’ll lay it out for you. “..the loan program has received criticism from members of Congress and CEO’s..” Yes, it’s called the hysteria over Solyndra. A $500 million investment from a grant application under the Bush administration, facilitated under the current. Due to the failure of one green energy company, a partisan advantage was seen and seized. The facilitation and failure was poorly handled, no question. However, the percentage of failures within the DOE program is still low. The main problem Solyndra was that they were in the disaster that is the solar panel industry. Panel prices fell by half last year. Another US panel company shuttered today. So are we spending time on the REAL issues with Solyndra failure? That of: Fair Trade and Currency Manipulation by China (1994 China set its currency at 50% of US dollar. China taxes US imports at 25%, US taxes China’s at 2.5%, and they subsidize solar to the point where they can sell panels at BELOW COST). It’s getting even worse: http://www.bloomberg.com/news/2012-02-24/china-encourages-solar-product-makers-to-expand-amid-supply-glut.html No, instead, we waste time on political theatre in the hearing entitled “Solyndra and the DOE Loan Guarantee Program.” And, let’s keep it on the front page for months and make sure all the stumping candidates push the narrative that green technologies are a huge waste. (cont'd)
Erin February 29, 2012 at 07:23 PM
Part II - Why are CEO’s complaining? " a series of "conditional commitment" letters from the energy department, each one including more "onerous terms than the last." –Yes, because of the DOE Solyndra grilling, it now has to bend over backwards twice to prove that a particular project will likely be successful. To do this, DOE has been forced to put increasingly more “onerous” demands on applicants. That has led to an essentially frozen grant process and now conditionally approved projects are falling through. The result: WHO LOSES in political theatre? We do Rochester Hills. Look at what it’s done to an exciting project, jobs, city revenue here in our town. Rabid partisanship and gridlock don’t help a recovering economy. We’ve shot ourselves in the foot. Sorry folks, I’m a pragmatist and apparently one of a dying breed of moderate Republicans who still think it’s ultimately more important to get things done, forge ahead with new technologies and to put country first.
Marty Rosalik March 01, 2012 at 02:44 AM
Erin: it's not too late. The field Bright is trying to get into is my field. It is not easy or cheap. Maybe they were rooted out by these tougher screening processes post Solyndra. Every year at the auto show somebody shows up with some uber car that defies all laws of physics. Every year my in-laws grill me as to why my company can't make this or that like the annual uber car. And every year like the dandelions these new guys wilt away only to have some new one pop up the next year. It's too bad because I welcome the competition. I planned on applying at Bright for product development engineering. In a few short years there will be enough hybrid and electric major components to allow some company like Bright to buy my big expensive new parts to integrate their ideas. The economy of scale will help us both. On another post someone went on and on about the batteries and the post vehicle use hazards. Well I plan to build some very low volume electric vehicles (toys)and some whole house uninterruptable power supplys using old hybrid and electric vehicle batteries. Problem is hundreds of others have the same idea and the used batteries are scarce. I am standing in line waiting for parts to become available. I"m now considering approaching battery companies about buying new for my post retirement ideas.
Scot Beaton March 01, 2012 at 04:26 AM
Erin, thanks for you comments with you 100% with this one.
Scot Beaton March 01, 2012 at 05:17 AM
2011 : U.S. trade in goods with China. All figures are in millions of U.S. dollars. TOTAL 2011: Exports $103,878.6   Imports $399,335.1 Balance -$295,456.5 The successful American businessman and investor Warren Buffett "The U.S trade deficit is a bigger threat to the domestic economy than either the federal budget deficit or consumer debt and could lead to political turmoil... Right now, the rest of the world owns $3 trillion more of us than we own of them." 
Daryl Patrishkoff March 01, 2012 at 12:23 PM
Marty, I was that "someone" who talked about what to do with the old spent auto batteries. You have a great idea, and there are plenty of spent batteries that have already hit the trash pile over the years. Previous and older electric hybrid cars (GM EV1 California, Toyota Prius, many others) that are already out there. Go get them and make it happen. With this large supply already out there why hasn't anyone done it yet?
Daryl Patrishkoff March 01, 2012 at 12:50 PM
Erin, You are correct the Solyndra loan was applied under Bush's program and it was denied due to a poor business plan. Once the administration changed Solyndra reapplied and after a review it was rejected again saying they would go bankrupt in the future (as it turned out they were off by a month with their projections). But the loan was approved anyways, it was a political decision. The Bright Automotive loan seems to be a long drawn out process with no quick answer to them so they could not choose another direction. These delays were before and after the Solyndra issue, so the delay was not just the recent scrutiny. Let’s not blame the looking at loans to make sure the companies have a good plan before just giving money. I expect them to be good stewards with our taxpayer’s money, but they do owe the companies a quick answer so they can explore other options. We did this no scrutiny approach with home mortgages and we all know that lead to the financial collapse. Why do companies rely on the government for loans? Why don't they take their business ideas and plans to the free market for investment? There is plenty of cash on the sidelines looking for good secured investments on a good business plan.
Marty Rosalik March 01, 2012 at 01:58 PM
Daryl the supply is actually not there yet. I check internet Craigslist, used auto parts, hybrid blogs etc on a regular basis. I'm trying to get some. The individual NiMh modules in a Prius pack are almost excatly the same as the GM packs. Same manufacturer Panasonic. They are perfect for my whole house power supply. But alas supply is still low and demand from guys like me is still relatively high. Second on NiMh the nickel is easy to get back and it fetches a great price as a recoverable commodity. So NiMh rarely wind up in trash. They are simply worth too much dead or alive. Thus the ones that are on the market are out of my hobby price range for now. Lithium may be quite different. Not as easy to get the expensive elements back so they may be easier to come by. But there are already companies waiting for old lithium Volt batteries to do exactly what I'm planning to do.
Daryl Patrishkoff March 01, 2012 at 02:39 PM
If I was an investor I would look in the past to see how the market reacted and try and use this data to see if this would work. Here is some hard data from the GM and Toyota volumes to see the available 10 year old batteries: 1996-1999 GM EV1 produced 1,117 units 2000-2002 Toyota Prius Hybrid produced 42,100 units What has happen to these 43,217 batteries? Did they get used the way you are proposing? Did they get recycled? On recycling: Europe has much stronger recycle laws and the whole automotive industry now rates their vehicles on recyclability. As a supplier of plastic resins to the auto industry we had to register our new resin on the global website and declare if it is recyclable. Then the auto suppliers selected our resin because it is recyclable and helps the status of the vehicles. Interesting work done to get ready for the large volume of electric car batteries hitting in 7-10 years: http://www.nytimes.com/2011/08/31/business/energy-environment/fancy-batteries-in-electric-cars-pose-recycling-challenges.html?pagewanted=all
Marty Rosalik March 01, 2012 at 02:57 PM
Daryl asked. "What has happen to these 43,217 batteries"? EV1 batteries were recovered and recycled by GM. I know I was there. Early EV1 were lead acid. Later were NiMh. The Prius now has about 2 million total produced and most are still on the road. The Volt goes on sale in Europe as the Ampera and their regulations are well known. When an electric vehicle battery won't meet automotive specs anymore... it if still good for many other uses. As for the later maybe "high volume" check these guys out. They are already ramping up for what I wanted to do. More players comming. The "grid balancing" is a great way to power more homes and buisnesses with less power plants. But you need "smart meters" to do it. http://gigaom.com/cleantech/gm-abb-seek-chevy-volt-battery-afterlife-in-grid/
Daryl Patrishkoff March 01, 2012 at 03:33 PM
Marty, Good stuff and they are lining up to do this right! For the electric car industry to work it has to also be financially viable. With the high price of these vehicles, even after government subsidies, the public is not buying them. If you notice many of these vehicles are purchased by wealthy people, is the government subsidizing the wealthy people to buy these vehicles? When will the normal middle class (high volume) buyer find this attractive? As gasoline engines and transmissions get more efficient, the gas mileage and emissions are getting much better. This is all done by improving existing known technology by the private sector. As these gasoline vehicles increases in performance at a great price the electric car needs to demonstrate a stellar financial proposition without governmental subsidies to the public to sell electric vehicles. I have not seen anything that shows a financial value proposition that makes it work. If we close our eyes to this and “hope” we will see it bubble and crash down the road. Look at the many bubbles we have seen in the past that just were overlooked for political reasons. There has to be a complete business plan that makes viable sense before we proceed, this is called due diligence.
Marty Rosalik March 01, 2012 at 03:59 PM
Daryl, none of these new electric technologies will be sustainable if they don't make buisness sense. As for engines, the cost of making them better is exponentially increasing while fuel economy is marginally increasing. Standard engine technology today in "grocery getters" was beyond exotic race equipment in the 80s. My job is to bring down the electric technology cost as fast as possible. In the near term due to regulation the increasing conventional engine/transmission technology will converge with decreasing or near steady cost of electric. Market demand will pick the dominant technology. I just want to by there with the menu to order from.
Scot Beaton March 01, 2012 at 07:52 PM
Erin, Marty & Daryl, ...thanks for the info enjoying the learning curve. CO2 emissions... I buy the new Nissan Leaf zero CO2 emissions, think I'm doing the planet a "world of good" lets say hypothetically everyone bought an electric car... we all plug in every night... that would be a major strain on the grid, and 60% of Michigan electricity comes from dirty coal so what are we accomplishing here?... and this country going to have to bring online a lot more power plants to charge all those cars. Not trying to be a Debbie Downer... just trying to keep the conversation going.
Daryl Patrishkoff March 01, 2012 at 08:23 PM
Scot, You are correct on the electric grid crashing and how it creates electricity. The whole chain needs to be looked at and common sense needs to prevail. The money we are spending on electric cars is leading to a bubble that will burst because the whole picture does not add up, it is a political decision. I am not a fan of electric cars, they have limited use and are not practical in today’s technology. We need to prove the technology works before we "double down" and ensure it makes financial sense. This is not the first time the auto industry did an electric car, look at the GM EV1 and it did not work in the market and financially. We have to stop making political decisions and start making factual decisions based on real numbers, not fabricated ones. Figures do not lie, liars figure.
Marty Rosalik March 01, 2012 at 10:10 PM
Scot, ready for some math? Powerplants do not throttle up or down well. Nukes and coal become inefficient off peak. For a Volt I plug in on a standard 120V outlet. 120V charging takes 8 hours to 10 depending on how cold it is. Some of that wall outlet power is used to keep the battery warm. 10 hours worst case at 10 amps = 1200 Watts. (outside in cold not in garage) So 12 KW hrs @ $0.15 per KWH = $1.80 Worst case no discount. If I had the bigger charger 220V and the discount about $1.30. Regardless of charger 12KWH = 12 KWH. Time of day matters. Now let's look at dinner time and grid load. We come home from work and put a pot on to boil. (3KW) Roast in oven (3 to 4.5 KW) Big screen TV and computer on while dinner cooks (1KW) Electric dryer to finish the laundry. (4 to 5 KW) Lights all over the house and other (1.5 KW) Air conditioning another 2 to 4 KW. Most of us are using about 10 to 15 KW peak morning and dinner time. Then we go to bed and the grid has to adjust. A Leaf or Volt charging @ 120V = 1.2 KW. Charging 220V, 2.2 to 2.4 KW. If you program the car to charge while you are sleeping, you are doing the grid a favor by stabilizing it. Hence this is why Edison offers a significant discount to charge off peak. I actually have a patent application filed to utilize systems already in our electric cars to facilitate discount off peak charging with NO "smart meter" required. We would ALL have to plug in during peak to hurt the grid.
Marty Rosalik March 01, 2012 at 10:29 PM
Daryl, I hope I explained to Scot the concept of off peak grid stabilization. Now to my buisness case. Edison offers about a 30% discount for off peak vehicle charging but I don't own an electric vehicle. What I want to do is purchase off peak power and charge my BIG box of recycled EV batteries while I sleep. Then I want to use this power to run my AC or even possibly SELL it back to Edison on a 92 degree, 80% humidity, August afternoon around 3pm. Of course I sell it back for more than I pay for it since I invested in the storage capacity and hardware.
Scot Beaton March 02, 2012 at 12:00 AM
1912 Detroit Electric Most people think that electric cars are a recent phenomenon. The truth is that in the early 1900's the electric car was a common site on the American road. Electric cars were used in a large part by women and doctors. Doctors needed a car that they could get in and go and gasoline engines were not that easy to start or reliable. Because hand cranking a car was difficult to say the least and could be downright dangerous the electric cars were very popular with women. In fact one of the downfalls of early electric cars is that they were thought of as a women's car and men did not want to be seen driving them. Interesting note: The expression that someone is "cranky" comes from trying to start a crank car with out much success. When it would not start it was being cranky! There were of course other factors in the demise of the electric car. The price of a Detroit Electric in 1914 was about $2,650 and if you wanted to upgrade to the Edison Nickel Iron batteries that went up about $600. At the same time you could buy a new model T for that same $600.
Scot Beaton March 02, 2012 at 12:03 AM
Thomas Edison and Henry Ford decided to work together to make the electric car the main transportation in U.S.. There goal was to have charging stations where people could "fill up" their cars. Henry's wife Clara refused to drive gasoline cars or "explosion cars" as they were called mostly by electric car salesman". Her 1914 model 47 resided at Fair Lane from 1914 thru the 1930's. There is 1 1915 currently on display at the Ford museum in Detroit. Henry Ford was reportedly quoted saying that he would die a failure if he did not die broke and planned on spending his fortune to make the electric car the mainstay of American transportation. Marty and Daryl... thanks I'm going to side with Henry Ford on this particular issue.
Erin March 02, 2012 at 02:47 AM
Daryl – I’m not sure you got the gist of my response, and that of the complaints of the applicants. I’ll try to reply to your response: “The Bright Automotive loan seems to be a long drawn out process with no quick answer to them so they could not choose another direction.” Wow, a federal grant taking a long time?? Not exactly unusual. Heck, I went to a Tienken Rd improvement meeting last night – the $$ was from a grant application originally from 2006. “These delays were before and after the Solyndra issue, so the delay was not just the recent scrutiny.” Yes, and No. The delays and pressure are much more amplified now, and given it’s an election year, NOTHING is going to get done due to this extra scrutiney. It’s not business, as you say, it’s political. “Let’s not blame the looking at loans to make sure the companies have a good plan before just giving money”. I never said that, of course we look at the business plan, I was responding more specifically to the CEO’s complaints of “onerous” restrictions and the reasons for such. “I expect them to be good stewards with our taxpayer’s money, but they do owe the companies a quick answer so they can explore other options.” Again, quick answers + government money = not reality. (cont'd)
Erin March 02, 2012 at 02:48 AM
Daryl - Part II - “We did this no scrutiny approach with home mortgages and we all know that lead to the financial collapse.” You’re losing me here. That’s Housing, and that is a whole of mess/discussion. And the financial collapse was WAY more complicated than people getting more house than they could afford. “Why do companies rely on the government for loans?” Ah, OK, so I think we get to your real objection here, and it’s ideological. You don’t believe government should be involved in private industry at all. Why not just say that? Personally, I believe there’s definitely a place for private/public partnerships. And if we don’t pursue them and the rest of the world does as a matter of course, we’re necessarily behind. “Why don't they take their business ideas and plans to the free market for investment? There is plenty of cash on the sidelines looking for good secured investments on a good business plan.” In the last 3 years, that pile of sidelines cash has first frozen, and then barely moving. And, was this the same “plenty of cash” that was available to the Auto Industry in the Fall of 2008? From all accounts I’ve heard, business lending has just finally begun to loosen up in the last 2 months, literally. Thanks for the discussion, as always -
Erin March 02, 2012 at 02:53 AM
Marty - thanks so much for your comments. I don't want to gush, but, you had me at "ready for some math?"
Daryl Patrishkoff March 02, 2012 at 11:01 AM
The politicians do not make business decisions and ask the tough business questions. They ask political questions and make decisions based on politics. I have a strong opinion on which method will deliver the goods and which one is full of waste. The home mortgage mess triggered the whole financial market to fail. Let me just mention the government controlled entities that set it all in motion. Fannie and Freddie Mac were under management by a few politicians making political decisions. We were told by these politicians that this was solid and under control just prior to the collapse. To this day we keep them a free pass and do not hold them accountable. We now are covering the top few managers’ huge legal bills and more money to bail them out. Sounds like the US Post Office, Amtrak and Greece, all political entities. I appreciate the dialog and I did not direct all my comments to you, just pontificating!
Daryl Patrishkoff March 02, 2012 at 11:01 AM
Erin, Yes I believe that government is into too many things, needs to scale back, set fair rules and get out of the way. You made my point exactly; it takes too long to get any action after all the political theatre they go through to make decisions. Bright Automotive chose the path to get a government loan, according to the article and their statements they were "slow walked" even longer than the normal process. I do not know the facts, but they seem to think that happen to them. I also do not know if they tried for other loans in the private sector, but it makes sense that they should have had a dual path in case one of them did not develop. I do know there is plenty of money ready to invest in a solid business plan; they will not invest in a political plan. It is up to the company to put together the case and sell it to the investor group. They are a tough group that expects answers that are fact based. I am intimately involved with a start-up with a very solid business plan and product, we have secured investors in this same timeframe to get the business going, it was hard work. We are on the edge, all start-ups are, and it keeps the management team focused. Wow, that is our free enterprise system and it works.
Daryl Patrishkoff March 02, 2012 at 11:37 AM
Marty, I agree with Erin, you had me at "ready for some math?" I love data and let the facts tell the story, not the opinion. You seem to have a well thought out concept and I am not sure if you are ready for primetime yet. There are many sources of private investors you could take this idea to in a business plan format. I have worked with several in the area that do a great job and try to help these ideas come to reality. To name a few: Ann Arbor Spark, Oakland University Incubator, Tech Town and the State of Michigan Pre Seed fund. I also know of an Angel Investor group that is just forming looking for ideas just like yours. Other resources like Shifting Gears has plenty of unemployed technical professionals who are looking for unpaid internships at companies and startups, their win is exposure and resume building. I would be happy to discuss with you further if you are interested.
Marty Rosalik March 02, 2012 at 02:22 PM
Thanks Daryl. I have a few ideas but all of them require a relatively inexpensive supply of used electric and hybrid vehicle batteries. One is remanufactured HV batteries. There are companies out there but I have some very specific ideas on how to do this better and I'm not sharing that. Honda is having all sorts of trouble with their IMA battery. Even class action law suits. There are re-man outfits but they aren't doing a very good job. The other idea of what I call distributed storage is in the works by several big companies. The Volt Afterlife link above is one of the big ones. They too are looking for these used batteries. So there are already competitors circling these waters. Since I'm too much of a technical geek I will need to "hire my own boss" when I go to start up. I know the technology not the buisness. Thanks again for the offer.
Daryl Patrishkoff March 02, 2012 at 10:42 PM
Marty, I am a member of the Michigan Academy for Green Mobility Alliance (MAGMA) because of my work with technical training and my project developing Compress Natural Gas passenger vehicles. We had a meeting all morning and we were discussing the various programs they have for electric vehicles and I thought of you. The colleges involved are looking for adjunct professors with electric storage and systems technical knowledge with vehicles. If this is something you are interested in doing I can put you in touch with the right people to see if there is a fit. Guess what, I brought up the reuse and recycling opportunities and they are interested in building a curriculum to have people ready for that wave of batteries. We also have GM, Ford, Chrysler, A123 and many other companies represented in the committee. Right now MAGMA is focused on only electric vehicles, I am trying them to expand into Compressed Natural Gas vehicles, we have over 10 Million of them in the world, but only 100,000 fleet vehicles in the US. What does the world see that we do not in the US?
Marty Rosalik March 05, 2012 at 08:23 PM
Daryl, I just saw this press release. I only know of one public CNG filling in Ann Arbor. "2013 GMC and Chevrolet Bi-Fuel Pickups Unveiled Chevrolet and GMC today announced details of GM's bi-fuel 2013 Chevrolet Silverado and GMC Sierra 2500 HD extended cab pickup trucks. Fleet and retail consumers can place orders beginning this April. The vehicles include a compressed natural gas (CNG) capable Vortec 6.0L V8 engine that seamlessly transitions between CNG and gasoline fuel systems. Combined, the trucks offer a range of more than 650 miles. The Silverado and Sierra will be available in standard and long box, with either two- or four-wheel drive."
Daryl Patrishkoff March 05, 2012 at 08:24 PM
Marty, Thanks, I just got the news release this morning. I also hear Chrysler will announce a Ram Truck bi-fuel vehicle tomorrow. This is getting exciting. Our approach is very different than these but glad to see the momentum.
Marty Rosalik March 06, 2012 at 02:01 AM
I'm hopefull that more CNG filling stations will be installed. Not many anywhere near here. Right now CNG is nowhere near the volitility of liquid dino fuel. Or price. The truck including heavy duty 3/4 ton is a great product. Towing, hauling, plowing, landscape... all possible. Some Larry The Cable Guy wannabe will probably lift one up to the moon. The Bi-fuel capacity even more versitile. And if Larry jacks it up... it won't smoke like the Badger.

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