Commissioners ask for LiV grant extension

LiV Golf Cars could have an extra year to fulfill its promise to employ 22 people at its Libby manufacturing facility, if the Montana Department of Commerce approves the request made by the Lincoln County Board of Commissioners. Last week the commissioners sent a letter to the department asking for an extension of the company’s $368,000 community development block grant, which was set to expire July 2.

Under the terms of the block grant program, LiV was to have 22 employees on the payroll by September 2015. Failure to meet that requirement could result in an accelerated repayment of the financial aid package provided to the company two years ago. LiV currently employs four people at the Libby facility, but the commissioners said technical and sales difficulties, which have now been overcome, justify the requested extension.

“As an early-phase entrepreneurship company in the pre-sales mode, LiV underwent exceptional delays in their research and development process to ensure a successful launch,” the commissioners wrote. “As they felt confident in the product design and engaged in the sales process, they learned of additional challenges. The company was able to overcome these early challenges despite the loss of momentum and erosion of the start-up capital. They have now passed two milestones; 1) they are position to be attractive to outside investors and 2) ready to engage in sales with some demonstrated success. It should be noted that 25 lithium-powered golf cars were transported from the Kootenai Industrial Park in Lincoln County to southern California on April 11, 2015. Lincoln County respectfully requests your consideration of an extension on the contract.”

LiV struggled with design and technical difficulties early, including problems with turning radius, set design and the foot pedal design. While these issues were relatively minor and did not adversely impact performance, the company decided to take the time necessary to perfect the issues prior to product launch. At the same time, a software issue in the battery management system required 12 months to resolve. The delays caused significant pressures for the company’s capital reserves while delaying the launch of their product.

Those pressures, the commissioners said, were exacerbated when the company’s first fleet sale of 76 cars was delayed due to the withdrawal of the leasing company from the transaction. In order to overcome that hurdle, company owner Jon Hoster raised an additional $250,000 in working capital from his friends and family to fund the deal. The full order was shipped to California in May, just a month behind schedule.

Facility manager Phil Equiaga said the company is behind on its goal to hire 22 people this year, but some of that is due to his personal philosophy. Equiaga said when he hires people, he is looking for a long-term relationship. He doesn’t want to bring people on for a temporary production surge and then have to lay them off later.

“My attitude is that I don’t want to hire for short-term spurts and then have to lay people off,” he said. “I want to hire people when I know the job is going to be there for the long run.”

In the long-term, Equiaga said, things are looking good for LiV. He wouldn’t provide specifics about as-yet unsigned deals, but said the future is looking bright.

“There are a lot of things in the pipe right now,” he said. “Things are looking pretty darn good.”

Calls to the Montana Department of Commerce regarding the status of the extension request were unreturned as of press time, but a spokesperson told The Western News in December extensions are generally granted if the company is making what they consider to be a good-faith effort to meet their obligations.