Yet Another Government-Backed Car Company Has Failed

Illustration for article titled Yet Another Government-Backed Car Company Has Failed

The U.S. Department of Energy's Advanced Technology Vehicles Manufacturing program, which floated taxpayer-funded loans to Fisker Automotive and four other companies, has been taking a lot of heat lately in the wake of Fisker's troubles. Critics now have another reason to be angry: The Vehicle Production Group.


The company, also known as VPG Autos, ceased operations today and laid off its staff of about 100 people, according to USA Today. The company's product was a wheelchair-accessible van powered by a Ford 4.6-liter V8 that was also slated for limousine and taxi duty. The vans were built under contract by AM General and also had a natural gas option.


The newspaper reports the Energy Department froze VPG Autos' assets after their finances "dipped below the minimum threshold required by the government as a condition of the loan", which totaled $50 million under the ATVM program. From former CEO John Walsh:

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.

[...] The federal loan money was spent wisely, Walsh says, and he expresses hope that it will all be repaid if the company is sold. He was CEO for about a year.

"I hung in there as long as I could," says Walsh, who is now an executive at another disabled mobility company. "I saw the handwriting on the wall months ago. We just couldn't get the capital to keep it going."

As Business Insider reports, VPG Autos was supposed to produce 900 jobs, produce 22,000 vans annually and take 12,200 tons of carbon dioxide out of the air each year. How they were supposed to do that with a body-on-frame, rear-wheel-drive V8 van is beyond me, but I'm guessing that was the goal of the natural gas engine. Between September 2011 and October 2012, more than 2,500 MV-1s were produced.

This now means that of the five companies given government loans, two — Fisker and now VPG Autos — have failed. Nissan, Ford and Tesla also received loans under the program. And it's sure to give critics of the program, and by extension, the Obama administration, more firepower.

We'll start counting the days before Walsh and other people in his company get hauled before Congress like Fisker did.

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Brian, The Life of

I never really understood this one. How can a car company with such a niche target market compete with the alternative of a modified mass-produced platform like a minivan? I've got a few disabled friends in wheelchairs who all own converted accessible vehicles today. One thing they all have in common is not wanting to "stand out" as being disabled when they are behind the wheel because they don't want to project vulnerability. For this reason they eschew disabled license plates in favor of mirror placards on their vehicles.