Richard Pollock @ Washington Examiner:
President Barack Obama gestures during a tour of Smith Electric Vehicles in Kansas City, Mo. Smith Electric Vehicles is an all-electric, zero emissions commercial truck manufacturer that received a $32 million Recovery Act grant to build all-electric trucks July 8, 2010. (Official White House Photo by Chuck Kennedy)
Another company that got millions of federal tax dollars in clean energy economic stimulus funds and a promotional visit by President Obama appears to be in jeopardy of going out of business.
Smith Electric Vehicles, a British company now based in Kansas City, canceled its scheduled September 21 Initial Public Offering (IPO) listing, and now faces an uncertain future reminiscent of the last days of the Solyndra solar energy firm before it went banktupt.
Smith makes electric powered trucks favored by the Obama administration, yet has never turned a profit and is heavily in debt. Smith originally scheduled its IPO to seek $125 million in new investment, but cut that back to only $75 million, then cancelled the offering outright.
“It is an astonishing disaster and it is likely the next step might be a Chapter 11 bankruptcy filing,” said Eric Meltzer, a Philadelphia-based manager of distressed companies.
The failed IPO is being compared to Solyndra because it also cancelled an IPO just before filing for bankruptcy solar energy company. Solyndra cancelled its public offering just before filing for bankruptcy.
The U.S. Department of Energy fast tracked $10 million in stimulus money to the company only eight months after the British firm acquired a building in Kansas City and was without any production capability. The administration eventually awarded the firm $32 million in grants.
The latest setback comes as the firm admitted it would fail to meet its projected 620 trucks this year. It cut back its goal to 380 trucks, a 40% reduction. But as of June it was off that modest projection, producing only a claimed total of 79.
The U.S. company was founded by its British parent company, the Tanfield Group a week before Obama’s inauguration in January 2009.
Visiting the plant on July 8, 2010, Obama hailed Smith Electric as a “promising, innovative” green business. Democratic Senatorial candidate Robin Carnahan, a member of Missouri’s powerful Carnahan political dynasty accompanied Obama to the plant. Carnahan lost her Senate bid that year.