Another company backed by DOE loans shuts down
Vehicle Production Group closed its office, but owes $50 million to the Energy Department
Chris Woodyard | May 8, 2013
A Michigan maker of vans for the disabled that received a $50-million Energy Department loan has quietly ceased operation and laid off its staff.
Vehicle Production Group, or VPG, stopped operations after finances dipped below the minimum threshold required by the government as a condition of the loan, says its former CEO, John Walsh. Though about 100 staff were laid off and its offices shuttered, it has not filed for bankruptcy reorganization.
VPG, of Allen Park, Mich., received its Energy Department loan under the same clean-energy programs under fire by House Republicans, especially the $527 million to troubled plug-in hybrid car maker Fisker Automotive and $535 million to solar startup Solyndra, which filed for bankruptcy reorganization…
VPG stopped operations after its assets were frozen by the Energy Department, he says. "They wanted us to get the remaining capital raised and we couldn’t get it done," he says. The company did not announce the suspension of operations. An Energy Department spokesman could not be reached for comment, although the agency has stepped in before when borrowers fell short of expectations: Fisker was cut off after $190 million.
VPG’s DOE loan was controversial. In 2011, the Washington Post raised questions about a fundraiser for President Obama and and the loan. It reported VPG was part of the portfolio of companies under Washington, D.C., -based investment firm Perseus whose vice chairman, James Johnson, was an adviser and fundraiser to President Obama. Perseus said at the time that Johnson played no role in procuring the loan for VPG. The Energy Department said at the time that the loan was based entirely on its merit after two years of review.
Gee, the loan was given to an Obama fundraiser. What a surprise.
VPG’s MV-1 vans, which went on sale in 2011 at a starting price of $39,950, were built under contract by AM General, maker of the Army’s Humvee transports. AM General spokesman Jeff Adams declined comment on VPG’s shutdown, saying his company was only the contract builder but he added that it will support the MV-1s already sold with parts and technical support.
Walsh says production of MV-1s was stopped about six months ago to prepare for a new model. He says the VPG had about 2,300 vehicles on order at the time including a half-filled order from New York’s MTA, which ordered 250 for paratransit service. Lack of orders wasn’t the big issue that led to the shut down. Rather, he says, the company lacked the strong network of dealers that are mobility specialists…
BS. If there was enough demand they could find a way to sell their vehicles.
Chris Woodyard | May 8, 2013
A Michigan maker of vans for the disabled that received a $50-million Energy Department loan has quietly ceased operation and laid off its staff.
Vehicle Production Group, or VPG, stopped operations after finances dipped below the minimum threshold required by the government as a condition of the loan, says its former CEO, John Walsh. Though about 100 staff were laid off and its offices shuttered, it has not filed for bankruptcy reorganization.
VPG, of Allen Park, Mich., received its Energy Department loan under the same clean-energy programs under fire by House Republicans, especially the $527 million to troubled plug-in hybrid car maker Fisker Automotive and $535 million to solar startup Solyndra, which filed for bankruptcy reorganization…
VPG stopped operations after its assets were frozen by the Energy Department, he says. "They wanted us to get the remaining capital raised and we couldn’t get it done," he says. The company did not announce the suspension of operations. An Energy Department spokesman could not be reached for comment, although the agency has stepped in before when borrowers fell short of expectations: Fisker was cut off after $190 million.
VPG’s DOE loan was controversial. In 2011, the Washington Post raised questions about a fundraiser for President Obama and and the loan. It reported VPG was part of the portfolio of companies under Washington, D.C., -based investment firm Perseus whose vice chairman, James Johnson, was an adviser and fundraiser to President Obama. Perseus said at the time that Johnson played no role in procuring the loan for VPG. The Energy Department said at the time that the loan was based entirely on its merit after two years of review.
Gee, the loan was given to an Obama fundraiser. What a surprise.
VPG’s MV-1 vans, which went on sale in 2011 at a starting price of $39,950, were built under contract by AM General, maker of the Army’s Humvee transports. AM General spokesman Jeff Adams declined comment on VPG’s shutdown, saying his company was only the contract builder but he added that it will support the MV-1s already sold with parts and technical support.
Walsh says production of MV-1s was stopped about six months ago to prepare for a new model. He says the VPG had about 2,300 vehicles on order at the time including a half-filled order from New York’s MTA, which ordered 250 for paratransit service. Lack of orders wasn’t the big issue that led to the shut down. Rather, he says, the company lacked the strong network of dealers that are mobility specialists…
BS. If there was enough demand they could find a way to sell their vehicles.
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