I was quite shocked to see the article in the Messenger/Freeman Journal Saturday morning about our bankruptcy which was caused by the failure of the electric car disaster. My first thoughts were how could such a shameful article be in the paper about a couple who have worked so hard over the years to build a successful business? My next thought was about my wife, who has supported and shared my ambitions from the start of our business back in 1996 and still supports me today. She doesn't deserve to be humiliated in a public forum for any reason.
Two years ago we were in negotiations with a large manufacturer for contract work that would largely replace the work that would be lost when Electrolux closed their doors. EHP was our largest customer and we had been working on replacing that lost business since the announcement of their leaving Webster City.
It was March or April of 2010 when David Toyer came to me with a lead the City had received about Envision Motor Company who was looking for a manufacturer for their electric cars. The first meetings were full of skepticism on our part and Envisions offers were turned down at least twice. Then a third party was introduced as the distributor for most of the U.S. This third party brought a huge amount of credibility to the project and seemed to have an in-depth knowledge of electric vehicles and their marketability. All which was pitched to us in a very convincing manner. Due diligence was very thorough and everything seemed to check out, after all, we were given test drives in electric cars in Des Moines that performed as promised. We were provided paperwork that showed the cars were crash tested and ready for the U.S. markets. Everything was in place, all we had to do was sign the contract, pay the fee for rights to manufacture, and get into production as soon as possible. In less than thirty days we hired management, skilled labor, set up training with the college, leased part of the Kenco warehouse, purchased or leased equipment needed to complete the vehicles, arranged shipping for the gliders from the East Coast into Webster City, set up the work area with work benches, tool boxes, vehicle lifts, security fencing, and whatever else we needed to get started. The cars came to town and we thought we would soon be on our way to producing an exciting new product with tremendous market potential. The forecasts were based on less than 1 percent of the total new cars sold in the U.S. but still called for a ramp up in production to 2,500 cars per month. The annual revenue even in the first year was impressive and should have strengthened the company very quickly.
Because of the contract signing with Envision we backed off the negotiations that had been ongoing prior to learning about the Envision nightmare.
But we waited and waited and waited for parts to show up until in late December of 2010 when an electric car that was supposed to be used for training was shipped to Des Moines, instead of Webster City. When I arrived in Des Moines to see the car it wasn't even functional! All this time I am paying all the usual expenses for any business except I did not have any revenue coming in. We had hired some very good people and their salaries reflected their expertise.
While we were stalled out with Envision we were busy doing our own investigation into electric cars trying to figure out why they were having all of these problems, which were always being explained as "vendor problems" but they would not divulge who the vendors were because that was "proprietary information."
We were calling every supplier we could find to educate ourselves on component availability, cost and also what new technology was emerging because, after all, we were going to build the only electric car with a 200 mile range. Every vendor we talked to was giving us the same reaction to the 200 mile range. Not possible.
During this investigation we visited many suppliers and component manufacturers and by the time the non-operating vehicle showed up in Des Moines, which was between Christmas and New Year's 2010, we knew the car was not compliant or ready for production so we had asked for mediation of our contract several times which Envision totally ignored.
With nothing left to do, I had our legal counsel terminate the contract with Envision.
During our investigation, we met Electric Blue and Island Green Motors. We met with Wheego and had initial agreements for production of their vehicles that were dashed because of lawsuits started by Envision and Gabus Family Trust.
These lawsuits are a direct cause of our bankruptcy and failure of our companies.
That's a pretty small snapshot of what went on the last 24 months but to go into more detail would literally take a novel to fully disclose everything.
The point of this letter is to put the focus back where it belongs.
We signed a contract with Envision Motor Company to build their electric car, which was supposed to be fully designed, fully functional, fully compliant for the U.S. market; and still are not being produced in any meaningful quantity as was touted in the Des Moines Register shortly after I terminated my contract. We were not responsible for these vehicles not being built in Webster City. Auto Manufacturing Systems and the people of Webster City are victims of fraud.
The people who run the City of Webster City and the elected officials are good people. For a town this size, you might even say they are exceptional. Webster City has been a major employment center for central Iowa for years. The intention of the loans for my companies, secured partially by me personally, were to grow our companies and secure jobs for the community and surrounding area. That didn't happen but it was not because of the actions of the city leaders or me or my companies.
Rather than go to war with each other, there are alternative ways to resolve this matter and I am asking that this at least be looked at before proceeding with what will surely lock our doors forever.
Bankruptcy is a tool for a new beginning, not a permanent ending.
My side of the story,