Start up mobility van maker VPG shuts down

Van maker Vehicle Production Group -- recipient of a $50 million loan from the U.S. Department of Energy -- has suspended operations and is in the process of being sold, its former CEO said Wednesday.

The Allen Park, Mich., company, which made MV-1 vans for the disabled, terminated about 100 workers and closed its offices in February.

VPG was granted an Energy Department loan in 2010 under the Advanced Technology Vehicles Manufacturing loan program, mirroring struggling plug-in hybrid car maker Fisker Automotive.

Former CEO John Walsh said in an interview that two companies in the "automotive space" are interested in VPG, with one being a current partner that "has a lot to do with building the car."

His clues suggest AM General -- a manufacturer of specialized military and commercial vehicles like the Humvee -- which was contracted to assemble the MV-1 in Mishawaka, Ind. AM General also assembles Ford's Transit Connect Electric wagon.

An AM General spokesman couldn't be reached this afternoon to confirm.

Once the VPG's assets were frozen after falling below the cash threshold set by the government, Walsh said halting operations was the best move.

"It was the right thing to do for the employees," Walsh said. "Many people were going to continue to work there but not be paid, and I couldn't sleep at night having that happen. It was the best financial decision to suspend the business."

The rear-wheel-drive MV-1 was designed for individual wheelchair users and fleets. It's powered by a Ford 4.6-liter V-8 engine and can run on either gasoline or compressed natural gas. It's built on a platform originally intended for a taxicab.

The loan funded assembly of the compressed natural gas version of the MV-1.

VPG hasn't filed for bankruptcy, and Walsh said he wants taxpayers to know their money was well spent.

The company, which built 2,500 vans and raised $400 million in capital, still has a "big build up" of momentum, Walsh said. He said VPG still has a backlog of 2,300 vehicles.

The van has a deployable access ramp with a 1,200-pound weight capacity and 36-inch entryway. It can hold up to six passengers with an optional jump seat, including one or two wheelchair passengers and the driver.

Walsh said VPG executives ran out of time in getting funds in place, but he's optimistic about its future: "It just needs a little more cash infusion."

Reporters Lindsay Chappell and Diana T. Kurylko contributed to this report.

(Specialized van maker that won $50M US loan shuts down originally appeared on Automotive News, sub. req.)

By Vince Bond Jr.- Automotive News