Published September 06, 2013
The Vehicle Production Group (VPG) is back in business, but it cost taxpayers a few bucks to get it there.
The company behind the MV-1 wheelchair-accessible van ceased operations earlier this year due to cash flow issues, after it was cut off from a $50 million secured loan from the U.S. Department of Energy for failing to meet certain financial obligations.
Now AM General, the Indiana vehicle manufacturer that had been producing the MV-1 for VPG under contract, has purchased the rights to that loan for $3 million and is also taking over the assets of the company, according to The Detroit News.
"After exhausting any realistic possibility for a sale that might have protected our entire investment, the Department determined that auctioning the remainder of VPG's loan obligation offered the best possible recovery for the taxpayer," DOE spokesman Bill Gibbons told the newspaper.
It’s not clear how much of the line of credit was tapped by VPG, but the DOE did manage to recoup $5 million from a reserve fund. The loan was earmarked toward the production of versions of the MV-1 that run on compressed natural gas, and game from the same Advanced Vehicle Technology Manufacturing program that gave funds to Ford, Nissan, Tesla and Fisker to develop fuel efficient vehicles.
Tesla has since paid its $465 million loan back in full, while Fisker had its $529 million loan suspended after drawing down about $179 million of it for failing to meet production milestones and has essentially mothballed the company as it looks for industry partners to get it back on track.
In a press release announcing the deal, AM General says it is rechristening the company as Mobility Ventures LLC and plans to restart production within 45 days, creating hundreds of new jobs in house and at its suppliers in the process.
The MV-1 features a built-in ramp and attachment points for wheelchairs and other mobility devices. VPG claimed to have sold over 2,500 of them, mostly to fleets and special taxi services, before suspending production in February.