Well Mike Boyle finally pulled the plug on Vectrix, they personally owed me money and never paid, but I didn't care. I was always a supporter of the brand, I didnt agree with the sales reps eating at Ruth Chris or St Elmos at the tradeshow in Indy since I knew the financial mess they were in. I felt bad because had I worked at Vectrix (not just given advice) I would have done things a little different. I saw the writing on the wall which saddens me because I still feel there is room for an electric scooter.
I should know I tried and failed with the Malaguti Electric Ciak (www.Malaguti.com) Back in the day before the tech existed the Italians tried to do this on a smaller scale in Italy with a 50cc model and it was a disaster. Still I always tried to push the idea of an electric highway or street capable unit. I think the tech is there now, but there is more to running a company than just good tech. Star Trek is more about people than the incredible future they present.
At the height of gas prices I thought wow maybe this time Americans will pick high speed rail, electric cars, maybe this time we won't have to go to war with Iran, Chavez in Venezuela (stay tuned for Chavez thats the Iraq of 2030 with our new army bases there) or some other oiltador. I said this to Carlo in Italy and I said it to the revolving management at the company. During the last four years I met three marketing guys at Vectrix each with a new plan and looking for more advice. I even have a collection of books on my desk called Vectrix 2.0 and Vectrix 3.0 the sequel all talking about how to market electric vehicles in the USA.
I met a young guy who was the importer for OZ while in Italy. He had all these great plans for Sydney, Melbourne, and how he would transform the whole "Group Think" of the gas scooter market over there. Last I heard he was the biggest client and the one who got screwed out of the most money and I hope I get to see him again so we can go back and see where it all went wrong.
So I guess Chapter 11 means MRP will never see the money its owed, but you know I always try to see the bright side of life like at least someone tried to do the right thing with Vectrix. When you work on a project like electric scooters you really don't worry about getting paid, you do it because it's the right thing, you feel like you are helping the world and not just selling another product. You have a solution that will help in the long run.
I helped them as much as I could consulting about 3 years ago. Giving advice on how to appeal to the scooter market, what dealers to go to (the company not listening is a different subjects which I will not go into in this blog) in the end they went for whoever had the cash which is the same desperation I see at all the major scooter companies now. Companies that had minimums of 10 units or 12 units to become a dealer are now selling to lawnmower shops that buy 2 or 3 pieces.
You sell the long term for the short term and thats what Vectrix did by not establishing itself as a sales based company first. There was a desk in their offices that cost as much as my entire office to just give you an idea of the spending that occurred there. Investors with no oversight or understanding of what they were putting money in, just guys from the Golf Club investing $200 million. By worrying about events and spending money on consultants who weren't in the business of driving sales but just creating pie charts. It tried to do sales as an afterthought and investor relations came first. It was all smoke and mirrors. I just have to say it was amazing tech and if you want to see my original test drive from 2006 of the unit I have it up somewhere on YouTube. I feel bad for the dealers that are now stuck with product that has no warranty and the $1,000 rebates they gave out that they will never collect on. These units sitting on dealer floors will be a hard sell in 2009 or 2010 unless Vectrix gets back up.
The owner base is what I am worried about. Those guys are the early adopters, people with money, who go out and preach to others that you should buy an electric vehicle. Tech savy individuals who are not all scooterists they are just people who wanted to help the earth or drive an electric vehicle. Talk to them and its like watching a scene from the movie "Who Killed the Electric Car" - If you haven't seen it go Netflix it today AWESOME MOVIE> which reminds me Saturn is now dead as well, because they were a different kind of car company just like Vectrix was a different type of scooter company.
We should all learn from the mistakes Vectrix made. Spending too much, posh offices, executives who were paid hundreds of thousands that knew nothing about scooters or how alternative vehicle marketing works. We should learn because there are several new electric companies starting this year, three of them have already contacted me for consulting and if not careful they can go down the same path. Let's hire a brand consulting company, let's get statistics, lets get a branding manager.... the consumer should come first period.
Whoever buys Vectrix I hope the first thing they do is contact each consumer and make sure the dealers can get parts. Start from the tech backwards. Do it the right way this time. Keep track of these guys who spent more on a scooter than a new car. Those guys are your bread and butter, they are an army of consultants. Paying executives $300k a year to do nothing thats a waste of time, spending a day with the guy who has 5,000 miles on a brand new Vectrix that one guy he is all the research you will ever need. He might be quirky, but he's the right kind of crazy you need. He will have all the data, he will have all the advice, he will know that bike as well as the engineer if not better.
I'm tired of so many companies doing it the Chinese mainland way lets cram product into the marketplace. I'm also tired of the fly by night guys who come in and spend all the investor money, go public, don't pay the bills, and then declare Chapter 11. Let's hope the new owners come in, buy the tech, and then establish a brand / business that will go for the consumer first and think long term. I'll forgive them for not paying their bill when I know they have done all this. When I know that there is someone with parts, service, and that there is a brighter future for all of us.
Here's to Vectrix "Here Here!"
I will always remember riding around in Rome back 2005 on one of the first Electric Units ever made. I felt so green that day I could have turned Vegan and moved to San Francisco. I felt like I was making a difference by helping them out despite not being paid for half my ideas. Then back in 2006 when I went with Motorcycle Product News I thought in a few years flying cars from the Jetsons would be created, the future was wide open. I was riding in Rome with 30 other guys on Electric Units, it had finally become true. This is a company that I hope makes a comeback, let's hope the new management does it right this time.
There is hope out there thanks to Obamas push for electric vehicles. I just hope the people that get the grant money don't spend it all with high paid ad companies instead of getting vehicles on the road. Let's hope they watch "Who killed the Electric Car" and know what Vectrix did wrong before they put the first electric bike out on the market.
The Scooter Maven
FROM DEALERNEWS.com
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Vectrix Corp. has filed for Chapter 11 bankruptcy, but says it has already lined up a buyer willing to shell out $5 million for its assets.
Vectrix officials say they have entered into an agreement to sell most the assets of the company to New Vectrix LLC, a company sponsored by GH Venture Partners LLC. The total purchase price consists of a cash payment of $1.75 million plus the assumption of up to $3.3 million in specified liabilities, but is subject to higher and better bids, approval of the bankruptcy court and customary closing conditions.
Vectrix officals say they expect to engage in a bidding process with other interested parties as soon as possible as competing bids are expected to be due by Oct. 27.
What does the bankruptcy filing mean for dealers? For now, the company's subsidiary, Vectrix Poland Sp. z.o.o., will continue to produce the Vectrix bike and provide customers with accessories, spare parts and technical support. Also, during this bankruptcy process, the company expects to continue normal business operations consistent with its obligations as a Chapter 11 debtor-in-possession company under the jurisdiction of the bankruptcy court.
Furthermore, under the asset purchase agreement with GH Venture Partners LLC, New Vectrix LLC would assume certain of the company's liabilities, including extending warranty coverage on the Vectrix vehicles previously sold to dealers and consumers up to a $2 million cap for claims filed 60 days post petition.
"This transaction provides a platform to continue the Vectrix brand and its advanced electric vehicle technology," says Mike Boyle, CEO of Vectrix. "We want to express our appreciation to our partners and customers for their continued patience and support during this transition."
In April, Dealernews reported that Vectrix had dismissed about 60 employees to cut costs and said it planned to seek "strategic alternatives, which could include a merger or sale of the business."
Then, in July, Dealernews reported Vectrix had laid off all but the most essential staff and was beginning the process of preparing for a bankruptcy filing.
"The company has been operating in challenging market conditions for some time as a result of the credit crunch and lack of consumer spending on bigger ticket retail purchases," Boyle wrote in a note to dealers sent out July 15. "The company has made every effort to reduce costs and conserve cash, but market conditions continue to be difficult and the results of sales have been very disappointing."
Conceived in 1996 by a group of engineers at Lockheed Martin and a former competitive sailor, Andrew McGowan, Vectrix, together with strategic partner Parker-Hannifin, invested more than $50 million and the better part of 11 years to bring a first product, the VX-1 (MSRP $10,495), to market in 2007. The company completed its IPO on the London Stock Exchange about 22 months ago and this year planned to add the VX-1E ($8,495) and entry-level VX-2 ($5,195) scooters to its lineup.
Vectrix supplied more than 90 dealers in the U.S. and nearly 160 dealers worldwide.
—Submitted by Guido Ebert
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