Zap! runs out of juice in Kentucky
Zap's plans to build a factory in Kentucky have once again run into the harsh light of reality as the cost escalated and money has become scarce. The plant, originally projected to cost $84 million now has a price tag of up to $200 million. The state of Kentucky originally put up $48 million in tax breaks, but one of the main investors in Integrity Manufacturing, as the joint venture is known, has bailed out of the project. GE Capital had previously agreed to buy $125 million in bonds for the factory but has now withdrawn that offer. The joint venture is now hoping to tap into federal money from a DOE fund for alternative energy projects. CEO Randall Waldman is now looking at other options such as building elsewhere if someone will provide funds or else scaling back and building a smaller factory and expanding in stages over time. Thanks to Michael for the tip!
[Source: Lexington News]
Reader Comments (Page 1 of 1)
Diffrunt 10:47AM (11/20/2008)
Zap should look around, there seem to be lots of shut down assy plants to be had cheap
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Richard 12:36PM (11/20/2008)
Diffrunt, was going to say the very same thing. Also, since GM, and Ford, and Chrysler seem to not be able to sell anything, they have excess capacity to build other models. Maybe a coop would be in order.
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deebee 3:44PM (4/09/2009)
Unfortunately, it isn't just the Big 3 that's not selling vehicles. Toyota, Nissan, and Honda are all reporting huge losses (30-40%) in the first quarter of '09. This isn't an 'American' issue, it is global! Americans are the largest consumers of cars in the world, however. When we stop buying cars, domestic and foreign automakers will all suffer. They all need to get on the ball with alternatives, particularly pure electric. It's the only technology with zero emissions that can be powered with 100% renewable energy (wind, solar, tidal). Period.
jpm 12:46PM (11/20/2008)
How much of a factor was Zap's low quality suckiness a factor in the investors backing out?
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TIMMAH! 1:15PM (11/20/2008)
So this would make it "twice burned" for investors then... Can't wait for the next go-around...
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rob 8:23PM (11/20/2008)
Since it was their own money, GE probably did a lot better due diligence than the State of Kentucky did.
Imagine my total lack of surprise at this turn of events...
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Chris M 3:25PM (11/21/2008)
Now it turns out that GE Capital Management wasn't involved at all, ZAP management was lying again. See:
http://www.manufacturing.net/News-GE-Capital-Deal-With-ZAP-Cars-Didnt-Exist.aspx?menuid=36
There was no agreement between GE Capital and Zap or its partner to be withdrawn!
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Alex Campbell 4:11PM (11/21/2008)
Let's be fair, ZAP never made such a statement about GE.
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