The bus stops here

By Dick Hughes  

JULY 28, 2011 11:11 a.m. (0)

Proterra, which has a bus assembly facility in Greenville, headquarters in Golden, Colo., and offices in California and Colorado, inevitably will centralize operations in Greenville, according to a ranking officer.

“I have no doubt Greenville will be in very short order the center of everything,” said Marc Gottschalk, chief counsel and business development director.

“For a company in the early stages, it is really helpful to have all the key people in one place, so I think it is pretty inevitable” that place will be Greenville, he said.

Proterra has five employees in Golden, mostly corporate officers.  Greenville’s employment numbers declined to 80 when production slowed during the company’s financial troubles, but it now expects to resume hiring as new orders come in.

Proterra’s financial struggles date back to the last months of 2010. Proterra had slowed or stopped payments to suppliers as it waited for $8 million from its main source of funding, MK Energy and Infrastructure of Stamford, Conn. The company had already invested $20.4 million in Proterra.

Then in January, Francisco Illarramendi was indicted on charges of defrauding hundreds of millions of dollars from pension funds of Petroleos de Venezuela, the state-run oil company. Unbeknownst to Proterra, those ill-gotten gains funded the $20.4 million investment. Illarramendi pled guilty and awaits sentencing.

The investment firm of Kleiner Perkins Caufield & Byers invested $30 million in June. That includes $6 million from General Motors’ venture firm, giving the automaker its first ownership stake in zero-emission electrical buses for mass transit.

Gottschalk lives in California and Proterra President Jeff Granato lives in Golden.

The company is headquartered in Golden because that’s where Dale Hill, founder and, until recently, chairman, lives.  He no longer has an operational role with the company. When Kleiner took control of Proterra in June, Hill was replaced as chairman and dropped from the board.

Proterra had planned to keep headquarters in Golden but now “that’s not going to happen,” Gottschalk said.

“Whether we move every person from Golden to South Carolina and whether I pack up my belongings and move to South Carolina is still an open question.”

Gottschalk also said the company is not yet in a position to construct a manufacturing plant to replace the 90,000-square-foot warehouse it converted to a temporary plant.

Proterra’s original intent was to break ground this year on a $33-million plant on 25 acres on the CU-ICAR campus.

The plant was envisioned at 220,000 square feet and with assembly lines capable of producing more than 300 EcoRide buses a year.  It was projected to have 1,300 workers within seven years.

“The last six months before we got the additional funding really cost us a lot in slowing things down and now we are having to reassess and rebuild,” Gottschalk said.

It doesn’t make sense, he said, to be in a big building “if we don’t have orders for it.”

Gottschalk added that he expects a new order soon and several more in the fall and winter.

He said Proterra has a number of opportunities from transit agencies qualified to buy electric buses under federal grants covering 80 percent of the cost.

That gives Proterra confidence, he said, because its EcoRide BE35 is the only bus on the market meeting federal standards for grants.

Gottschalk said Proterra will need “another slug of capital” when it has more orders and needs to increase production. “This is a capital intensive business, and the people who go into investments like this know what they are facing.”