Home / World Business
Wed, Jun 08, 2005 - Page 12 News List

Two top executives abandon upstart auto company

FUTURE IN DOUBT After just three months on the job, the president and a vice president of Visionary Vehicles have quit, citing concerns over the business' viability

NY TIMES NEWS SERVICE , DETROIT

The future of Visionary Vehicles, the upstart company that announced in January it would bring the first Chinese-made automobiles to the US by 2007, appears to be in some doubt.

Two top executives said in interviews on Monday that they had recently left Visionary, a privately held company based in New York, after only short stays. After just three months on the job, Pierre Gagnon, the president and chief operating officer, and the No. 2 executive at Visionary, said on Monday that he had resigned that day. But he added that he had had a falling out six weeks ago with the head of Visionary, Malcolm Bricklin.

Bricklin is the brash businessman -- often likened to an automotive version of P.T. Barnum -- who first brought the Yugo and Subaru brands to the US.

Commitments

"Malcolm reneged on several agreements that affect my trust and willingness to be part of his organization," said Gagnon, formerly the top North American executive of Mitsubishi. "I still have high hopes for what it might be possible for Visionary Vehicles to achieve and wish him the best."

Gagnon said that "many of the commitments he reneged on revolved around financial issues" but declined to elaborate.

The other executive to leave was Andrew Stewart, who worked with Gagnon at Saturn and Mitsubishi and was the vice president of franchise development at Visionary. He said he left at the end of April and returned to Mitsubishi.

Funding concerns

"I left one month after I started," Stewart said. "It became very, very clear, as much as I believe in what he's trying to do -- it became clear he's not able to fulfill the promises necessary to create a viable company.

"The man doesn't have any money that I could see," he added. "He doesn't pay his employees on a regular basis; he doesn't reimburse expenses very well."

In an interview on Monday evening, Bricklin disputed the men's contentions. He said that his company "was well-funded" and that he had "terminated" Gagnon two months ago and had not paid him since.

"We realized he was not startup material," Bricklin said. "He didn't fit, and we didn't announce it, and he was not supposed to announce it until we worked out something in an advisory role."

He said that Stewart had been hired by Gagnon and added that he had only met Stewart briefly before Stewart left the company.

Bricklin has received a wave of press coverage in recent months, following his promise to bring 250,000 vehicles made by the fledgling Chinese automaker Chery Automotive to the US by 2007 -- and even to deliver Lexus-level quality.

The claims have met with wide skepticism from auto executives, as well as with concern that any influx of inexpensive Chinese-made cars could start a new price battle in the highly competitive US market.

General Motors is currently in a legal dispute with Chery over claims that the Chinese company copied the design of one of GM's cars sold in China. GM has also threatened to sue the company if it brings the Chery name to the US, saying it is too close to GM's Chevy brand.

Risks

Gagnon and Stewart, speaking in separate interviews, said they were concerned about the ability of Visionary to deliver on Bricklin's promises.

"One of the risks is definitely quality in any startup, and it's difficult to commit to Lexus-type quality with a five-year-old company, and by 2007 they'll be five years old," Gagnon said of Chery.

This story has been viewed 2326 times.
TOP top