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Vectrix cuts 60 staff, seeks funding, suspends trading

April 15, 2009

Charles from Scooter-Station pointed us to this Vectrix announcement via the London Stock Exchange, where their stock is traded:

Middletown, R.I.- April 14 – Vectrix Corporation (AIM: VRX) (www.vectrix.com), maker of the world’s first high performance, two-wheel zero emission vehicle (ZEV), announces that while its efforts continue to secure new equity funding and government based loan or grant support as well as temporary financing, the Directors will now begin to seek other strategic alternatives which could include a merger or sale of the business. The Company will continue to provide updates to the market as we progress through these activities. In order to conserve working capital for continuing operations during this period, the Company this week implemented cost savings measures including a significant reduction in workforce involving some 60 staff.

Trading in the common stock of the Company remains suspended until further notice.

Comments

10 Responses to “Vectrix cuts 60 staff, seeks funding, suspends trading”

  1. pocphilNo Gravatar on April 15th, 2009 9:05am

    Do you think it was the <$2.00 gallon gas, or the lousy economy that put them under?

  2. BrookeNo Gravatar on April 15th, 2009 9:21am

    Probably both the lower gas prices and lousy economy. But I think designing a product around a technology that has yet to become ready for prime time (batteries) is a bigger stumbling block. Other mistakes include that horrible chrome side cover and introducing product #2 before product #1 had become a sales success.

    On a side note. Le French have pulled the article. Or so it seems. The link is dead and a search of their site comes up empty.

  3. illnoiseNo Gravatar on April 15th, 2009 9:59am

    Weird, Charles sent me the story this morning, but I never saw it on RSS. The link worked when I posted it, though.

    Were the newer models ever actually released? Right now they only show the VX-1 and its variants, not the smaller, cheaper models. The cheaper models were a smart move as far as expanding their product line into the reach of more people, but those smaller bikes just didn’t seem up to par with the VX-1.

    The VX-1 isn’t perfect, but it’s the most fully-realized electric scooter out there. My only two complaints are the price and the fact that the design isn’t innovate enough to attract attention. I think the real ‘next-generation’ electric two-wheeled scooter will abandon the idea of pretending to be a scooter OR a motorcycle and define a new class of vehicle in the way the Vespa defined the postwar motorscooter. That’s why I got into scooters, the inseparable fusion of form and function of the Vespa, you can’t tell where the engineering ends and the design starts. The vehicle that defines the electric 2-wheel revolution deserves the same treatment. (and for that matter, modern scooters could use the same advice. Stop trying to copy the form of the Vespa, and try to copy the idea behind the Vespa.)

  4. illnoiseNo Gravatar on April 15th, 2009 10:48am

    Ah, I botched the link to the Scooter-station story, my bad, it’s fixed now. But I still don’t see it on their RSS feed.

  5. stefanNo Gravatar on April 15th, 2009 11:44am

    even with high gas and booming economy, could ANY market bear the sticker? what volume would they have to move in order to bring the price down and maintain profitability?

    unless they have/had a business model for a high end niche market, i don’t see how it could survive in any economy with that price tag.

  6. dru_No Gravatar on April 15th, 2009 12:06pm

    The product suffers from a two issues. Terminal ugliness, and high purchase price.

    I’ve ridden one, and I think that if they can survive a restructuring (or get some funding) they have a future. The product is a Version 1 product, and it shows. But the ground work they have laid is impressive. IT would be a shame to see them hit the wall now, but probably not unexpected.

    The patent portfolio is strong enough though, that I suspect another manufacturer is just waiting for them to file Chapter 11 and acquire the assets and company for pennies on the dollar of the debt.

  7. MarkHNo Gravatar on April 15th, 2009 5:10pm

    Those two issues limit your customer base to rich white guys (whose purchase will sit in a garage and most likely never even be registered) and government agencies. They both have money to burn, lack common sense, and are accountable to nobody.

    From an investors standpoint, Vectrix has been a series of red flags since day one.

  8. illnoiseNo Gravatar on April 15th, 2009 8:48pm

    So let’s narrow it down to one factor: it lacked the “wow” necessary to justify its price.

  9. BrookeNo Gravatar on April 16th, 2009 12:05am

    For all my criticism, I think they got close. People that rode them really liked them. I think performance was well in the acceptable range. I begrudgingly admit that there’s no accounting for taste so looks can be really ruled out as a factor. Just too big for my tastes (and in my opinion to call it a scooter). So I think they had a good amount of “wow”, but as stated, just not quite enough.

    Caveat #235: I don’t know if I’d count them out yet. I was just perusing the additional grant opportunities under the ‘Recovery Plan’ and there are a few that are aimed at electric vehicles. I’d be stunned if they haven’t submitted a grip full of proposals. If hair brained ideas get some help, Vectrix may be deserving as well.

  10. scootervillainNo Gravatar on April 20th, 2009 5:27pm

    3900 miles and counting. 350 miles so far this Spring. I absolutely hate maxi scooter design, though the look of the Vectrix has grown on me. Since the majority of my Vectrix riding is on the freeway the long wheelbase and the 520#
    are a good thing. The low center of gravity and the accelleration make it far more nimble than you’d expect.
    As far as the company goes, I think a major downsizing is the best thing that could happen. The fact that they eliminated 60 positions tells me that they were WAY too large. But they’re publicly traded and it’s a lot easier burning through other people’s money. They need to talk to Genuine about how to do a lot with a little.

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