AM General Purchases VPG

Financially troubled automaker Vehicle Production Group - manufacturer of the accessible MV-1 purpose-built car - is in line to be purchased by AM General, best known for producing military Humvee vehicles and formerly its civilian counterpart, the Hummer.

An AM General announcement in early September said the company had "reached an agreement with the United States Department of Energy (DOE) to purchase the DOE's secured loan to VPG."

AM General had assembled the MV-1 in the past, but going forward will own and operate the newly created Mobility Ventures LLC, which "will acquire the assets of VPG," according to the news announcement.

The MV-1 - touted as being the only automotive vehicle in the United States to be expressly built to be wheelchair accessible - is expected to be back in production in approximately late October, AM General added.

This latest news comes after a number of mainstream automotive publications, including Auto Week and Motor Trend, announced in May that VPG had halted production of the MV-1, and that nearly all VPG employees had been laid off.

USA Today said John Walsh, VPG's most recent CEO, blamed the situation on cashflow problems and a dealer network that wasn't robust enough.

Ironically, VPG first made headlines in the mobility industry for announcing in the summer of 2010 that it would launch and sell the MV-1 without using any sort of automotive dealer network. The move shut out not only mobility dealers, but also mainstream car dealers as well.

Instead, VPG asked would-be buyers to visit the manufacturer's Web site, make a $250 down payment, and fill out an online order form. VPG more recently had formed a mobility dealer network.

The MV-1's claim to fame was that it was designed and built from the start to be wheelchair accessible. VPG's original CEO, Dave Schembri, was quoted in the mainstream press as contending that converted vehicles in comparison offered poorer ride quality and handling, claims that did not sit well with automotive conversion manufacturers.

During the ownership transition process, AM General said it would "continue to provide service parts and technical support to the network of more than 80 MV-1 dealers and distributors throughout the U.S. and Canada." The MV-1 will continue to occur at AM General's Mishawaka, Ind., assembly plant, and its new owner is planning "the accelerated restart of production and sales."

AM General added that the resumption of MV-1 production is expected to create hundreds of new jobs.

About the Author

Laurie Watanabe is the editor of Mobility Management. She can be reached at lwatanabe@1105media.com.

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