Electric Mobility's days are numbered

Thursday, April 28, 2011

SEWELL, N.J. - Despite 35 years in business and a recent attempt to revive its dealer division, Electric Mobility began winding down operations in April.

Owner Michael Flowers blames steep cuts to power wheelchair reimbursement in 2006 and the loss of a Department of Veterans Affairs (VA) contract last year for the company's demise.

"It was the combination of those losses over a five-year period," he said. "The loss of the VA contract was really the precipitating factor. That really shot us down."

Electric Mobility did business as the Rascal Company, its direct-to-consumer division; and Rascal Mobility, its dealer division. A separate but related corporation in the United Kingdom, Electric Mobility Euro Limited, is unaffected.

An industry source characterized Electric Mobility's attempt to revive its dealer division--and perhaps the company itself--after nine years of selling direct to consumers as "too little too late." It's not a characterization that Flowers necessarily denies.

"We were getting some critical mass; we had signed up about 300 dealers," he said. "It's unfortunate. We probably should have started that two years earlier and we would have been able to withstand the loss of the VA contract."

Electric Mobility had the VA contract for full-size four-wheeled scooters from 2005 to 2010. Late last year, however, the VA awarded a new contract for that product category to Golden Technologies (See HME News May 2011).

"That was half of our business volume," Flowers said. "It wasn't only scooters. A scooter goes with a travel accessory like a lift. So there were quite a few additional products that we were able to offer and distribute through the VA."

As part of its wind-down, Electric Mobility is still supplying parts and honoring warranties. Even after it ceases operations, it expects that to continue.

"Our goal is that our assets, like the tooling for the products, will be auctioned off," Flowers said. "We fully expect someone will buy those assets and continue to supply parts. We're also attempting to put in place a warranty reserve fund."

Also read:

Flowers reinvents himself

Electric Mobility settles with the FTC