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WASHINGTON, D.C. (Chris Woodyard, USA Today) - A Michigan maker of vans for the disabled that received a $50million Energy Department loan has quietly ceased operation and laid offits staff.

Vehicle Production Group, or VPG, stopped operationsafter finances dipped below the minimum required as a condition of thegovernment loan, says former CEO John Walsh. Though about 100 staff werelaid off and its offices shuttered, the company has not filed forbankruptcy reorganization.

VPG, of Allen Park, Mich., received itsEnergy Department loan under the same clean-energy program -- now underfire by House Republicans -- that originally committed $527 million totroubled plug-in hybrid carmaker Fisker Automotive and $535 million tosolar start-up Solyndra, which has filed for bankruptcy reorganization.VPG was deemed eligible for the clean energy loan because some of itsvans were to be fitted to run on compressed natural gas.

Walsh,who left VPG with the rest of the staff when it closed in February, saysthe company had raised $400 million in private capital from investors,including financier T. Boone Pickens, and built 2,500 MV-1 vans. ThoughVPG still had a healthy order backlog, it ran low on cash and didn'thave the dealer network that it needed, Walsh says.

In 2011, thecompany's then CEO, Dave Schembri, said he hoped that it couldeventually ramp up production to about 30,000 vans a year, not only forindividual sales to the disabled, but for sales to taxi and limousinefleets needing handicap-accessible vehicles. The company showed a taxiversion at the 2012 New York Auto Show.

VPG stopped operationsafter its assets were frozen by the Energy Department, he says. "Theywanted us to get the remaining capital raised, and we couldn't get itdone," he says. The company did not announce the suspension ofoperations. An Energy Department spokesman could not be reached forcomment, although the agency has stepped in before when borrowers fellshort of loan conditions: Fisker was cut off after drawing $190 millionof its loan package.

VPG Chairman Fred Drasner could not be reached for comment.

VPG's DOE loan was controversial. In 2011, The Washington Post raisedquestions about a fundraiser for President Obama and the loan. Itreported that VPG was part of the portfolio of companies underWashington, D.C.-based investment firm Perseus, whose vice chairman,James Johnson, was an Obama adviser and fundraiser. Perseus said at thetime that Johnson played no role in procuring the loan for VPG. TheEnergy Department said at the time that the loan was based entirely onmerit after two years of review.

VPG's MV-1 purpose-built vans,which went on sale in 2011 at a starting price of $39,950, were builtunder contract by AM General, maker of the Army's Humvee transports. AMGeneral spokesman Jeff Adams declined comment on VPG's shutdown, sayinghis company was only the contract builder. But he said it will supplyalready-sold MV-1s with parts and technical support.

Walsh saysproduction of MV-1s was stopped about six months ago to prepare for anew model. He says VPG had about 2,300 vehicles on order at the timeincluding a half-filled, 250-van order from New York's City's transitauthority.

The federal loan money was spent wisely, Walsh says, and he expresses hope that it all will be repaid if the company is sold.

Walshwas CEO for about a year. "I hung in there as long as I could," saysWalsh, who is now an executive at another disabled mobility company. "Isaw the handwriting on the wall months ago. We just couldn't get thecapital to keep it going."

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