Production has been stalled at Earthbound Recreational Vehicles since last summer, but the company insists it will restart soon.
President Charles Hoefer said the company continues to hope for success in Marion and recently unveiled plans for three separate lines of travel trailers.
If it fails, he acknowledged the company was "on the hook for everything."
The City of Marion incentivized the company's start up in 2010 by backing a $2 million bond with county economic development income tax (CEDIT) money.
If Earthbound fails to make payments on its $2 million loan, the city may ultimately use the CEDIT money to pay the debt.
During the Feb. 7 Marion City Council meeting, Joselyn Whitticker, D-At-large, raised questions about the company's financial condition and how it could impact the city.
Whitticker could not be reached for comment or elaboration.
The company originally projected that at full production it would hire around 180 workers to produce 400 or more coaches a year at its 1001 E. 38 St. factory.
From the start of production in July 2010 until layoffs in July 2011, the company produced around 150 coaches and hired around 50 employees.
Hoefer said the company ran into issues on its production lines and has since worked to resolve and learn from them. He said the decision to halt production was to keep the company viable.
"We really are first people in RV industry building this type of product (and) that has a learning curve," he said.
City Development Director Darren Reese said the city did not see a negative outcome on the horizon and continued to work with the company.
"It's clear that we are partners with them and we'll leave no stone unturned and no opportunity missed," he said. "We do that, honestly, with all local businesses."
Reese said he did not foresee a "worst case scenario," but that if the company fails the city was still unlikely to pay the $2 million in CEDIT money. He said before that money is tapped, the city's agreement includes collateral that includes personal properties, residences and the business itself.
Earthbound, which is a family-owned business, continues to hope to restart production and honor its commitment to Marion, Hoefer said.
He said the ownership group is internally funding the company to keep the offices open and keep drawing up engineering plans as the company reaches out to outside funding.
"Obviously we're not producing so we don't have revenues," he said.
Since the fall, Earthbound has been retooling plans for future production and has three announced models for 2012.
Earthbound occupies a unique niche in the recreational vehicles market. It manufactures high-end towable travel trailers with eco-friendly materials and lightweight designs.
Whereas it previously planned to exclusively go toward a "custom" line with a higher price point, Earthbound's recently unveiled L2R, "Live to Roam," model is more in line with previous pricing at $65,000 to $79,500.
Hoefer said the L2R is similar to the models produced last year, but with upgrades such as all-LED interior and exterior lighting and a newly designed cabinetry. He said the company worked hard to keep costs low.
"It's something that should have acceptance in the market," he said.
The company is receiving the most calls for its Earthbound model, Hoefer said, which is within its mid-range price range from $84,900 to $115,900.
Hoefer said the company's "custom line" has evolved into its Azzero line. He said the company was hoping to offer options similar to million-dollar motor homes, but at a much lower price and the ability to be towed behind an SUV.
"All three should move down lines in the factory," he said.
Hoefer declined to give a timeline for when production would begin, but said he hoped the first few months should have 20 to 30 works in production.
"If the facility is running at (maximum) capacity, that would be in the range of 60-plus building and around 75 in a single shift," he said. "If we push beyond, as we're hoping in two years, we're looking at separate sites and multiple shifts."
Reese said he understood concerns with the company, but didn't want the impression to be that a worst case scenario is near. He said the city continued to work on a positive outcome.
"It's in ours, theirs and the community's best interests to develop alternative manufacturing in Marion," he said.