A major car manufacturer has filed for bankruptcy after falling into financial meltdown.
California-based manufacturer Proterra said in court filings that it was struggling to be financially profitable while developing customized buses for transportation provider CapMetro, The Washington Post reported in August.
One reason for Proterra’s difficulties is that the company doesn’t recognize revenue until it delivers buses to CapMetro.
“While our world-class electric vehicle and battery technologies have set an industry standard, we have faced various market and macroeconomic headwinds that have impacted our ability to efficiently scale all of our capabilities simultaneously,” Chief Executive Officer Gareth Joyce said in a statement press release announces bankruptcy.
The sharp increase in inflation during this time reduced the company’s margins and brought the company to its knees financially.
Nevertheless, Proterra has assured customers that the developments will not affect the transport company’s service.
A CapMetro spokesperson said they are in contact with Proterra and Proterra is fully committed to fulfilling existing contractual obligations.
The hope is that Proterra will “strengthen its financial position” after voluntarily filing for Chapter 11 protection by pursuing a recapitalization.
“The restructuring is intended to maximize the value of each independent business unit,” Proterra spokesman Shane Levy told TechCrunch, noting that it is ongoing and the end result is unclear.
Cracks began to appear in January 2023, when the company cut 300 jobs in South Carolina to cut costs.
“The consolidation of manufacturing sites will also enable the company to better manage ongoing supply chain disruptions and reduce facility costs,” the company said at the time.
This came after the largest groundfish company on the East Coast filed for bankruptcy, leaving employees without a job as all locations closed.
Blue Harvest Fisheries filed for Chapter 7 bankruptcy on Friday, meaning the company will most likely have to close and liquidate all of its business assets.