Feds’ $50M loan to automaker could create 900 jobs

The Department of Energy will announce on Monday it is giving a $50 million loan to Vehicle Production Group, which makes wheelchair accessible vehicles at a Mishawaka plant.

Officials say they expect the loan to create more than 900 jobs in an economically ravaged part of Indiana.

The announcement from the Department of Energy comes a day ahead of an expected visit to Indiana by President Barack Obama.

Vehicle Production Group manufactures six-passenger, wheelchair accessible vehicles known as MV-1s. The vehicles run on compressed natural gas and will use no gasoline and produce lower emissions than normal cars and trucks.

"What's attractive about this project is that the physical plant and the skilled human resources are readily available in this area to make it work," said Jonathan Silver, the executive director of the programs office at the Department of Energy. "It's not starting from a standstill, it's a very, very highly skilled labor force."

Once a manufacturing hotbed, northwest Indiana has been particularly hard hit by the economic downturn. St. Joseph County's unemployment rate in September was 11 percent, higher than than 10.1 percent statewide average. The MV-1 is built at the AM General assembly plant in Mishawaka, where the Hummer H2 also is manufactured.

The loan is being administered through the Department of Energy's AVTM Loan Program, which offers support to advanced technology and green energy jobs.

Silver said the loan will allow Vehicle Production Group to ramp up its work designing and producing wheelchair accessible vans that run on compressed natural gas. He said the Department of Energy's investment in the company was on par with other loans it had made in the last year seeking a cleaner, more energy efficient auto industry.

He said the loan program being used was "helping to advance the secretary of energy and the president's agenda with respect to a cleaner, greener energy sector."