MISHAWAKA — The company that once planned to create hundreds of jobs building electric vans at the former Hummer H2 plant said it now plans to file for Chapter 7 bankruptcy.
Officials from ELMS or Electric Last Mile Solutions made the announcement Monday morning. Chapter 7 bankruptcy means the company’s assets will likely be liquidated to pay creditors, investors and others.
ELMS was the third company to occupy the former H2 plant since AM General stopped using the facility to assemble the Hummer, a handicap-accessible van and a Mercedes Benz utility vehicle.
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In 2017, the plant was sold to SF Motors, which was eventually rebranded as Seres Automotive in 2019. Ultimately, the companies planned to build a midsize electric crossover vehicle at the plant, which is just off McKinley Highway.
But those plans fell through, even though about $20 million was spent upgrading the 20-year-old plant. The upgrades were one of the reasons that ELMS was attracted to the facility in the first place.
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And business appeared to be moving in the right direction with prototypes and distribution agreements for a small Class 1 commercial of that would provide 150 to 200 miles of electric range.
The company’s fortunes reversed course earlier this year, however, when it announced the resignation of CEO James Taylor and Chairman Jason Luo following an investigation by a special committee of the board.
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The committee determined that some executives had inappropriately purchased equity in the company before ELMS announced an agreement to go public in December 2020.
Shauna McIntyre, a member of the company’s board of directors, was appointed to take Taylor’s place and Brian Krzanich was appointed non-executive board chairman, replacing Luo.
But even with apparent progress that was being made since then, the company made the decision to liquidate because those events and a pending SEC investigation “made it extremely challenging to secure a new auditor and attract additional funding,” the company said in a release.
“I’m very disappointed by this outcome because our ELMS team demonstrated incredible determination to get our electric vans ready to meet the critical need for clean, connected vehicles that reduce carbon emissions from ground transportation,” McIntyre said in the release.
“Unfortunately, there were too many obstacles for us to overcome in the short amount of time available to us,” she added. “This is a viable and essential technology, and I am confident that many of our talented employees will play a future role in this energy transition effort.”
Local officials expressed disappointment with the news, but said the ELMS van and the plant should have value to investors or another auto company.
“We didn’t have any incentives in the deal,” said Bill Schalliol, St. Joseph County’s executive director of economic development. “But still it’s disappointing because of jobs and tax revenue the plant would have generated.”
The Indiana Economic Development Corp. offered ELMS up to $10 million in conditional tax credits, and up to $200,000 in conditional training grants based on the company’s job creation plans.
The IEDC also offered up to $2.8 million in conditional tax credits from the Hoosier Business Investment tax credit program based on the company’s planned capital investment.
However, those tax credits were performance-based, meaning the company was eligible to claim incentives once Hoosiers were hired.
The company said employment at the plant could reach 900 by 2025 as it ramped up production of the Class 1 van and other vehicles it had in the pipeline. But Jeff Rea, president and CEO of the South Bend Regional Chamber of Commerce, said he believes employment probably peaked at around 100 or less late last year.
“It seemed like ELMS had a lot of promise with good ideas and some snazzy marketing,” said Rea, referring to the Troy, Mich.-based company. “But even with the bankruptcy, there’s still a great plant that’s had a lot of investment.”
Whether it’s someone taking over the ELMS’ commercial of project or another automaker in need of space, Schalliol agrees the plant should draw attention.
“In the last five years, it has seen $20 million in improvements,” he said. “It has to be one of the better positioned facilities for a user to come in and do something in it.”