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South Bend company taking over defunct Michigan van maker

SOUTH BEND – AM General plans to resume building vans for the disabled at its northern Indiana factory after taking over the Michigan company that designed the vans and received a $50 million federal loan to make them.

South Bend-based AM General announced it reached an agreement Thursday with the U.S. Department of Energy to buy the secured loan for the Vehicle Production Group of Allen Park, Mich.

AM General had built VPG’s wheelchair-accessible vans under contract and plans to restart production at its Mishawaka factory, possibly hiring hundreds of workers. AM General says it expects production to start within 45 days at the factory that formerly made H2 Hummers.

Former VPG CEO John Walsh told the South Bend Tribune that many people had expected AM General to be the company to take over building the MV-1 van.

“It couldn’t be in the hands of a better company,” Walsh said. “Very high quality. Very structured and I am sure they are going to bring it back to market in absolutely the right way, and it will be a success.”

Before suspending operations in February, VPG sold more than 2,000 wheelchair-accessible vans that were built by AM General. The company’s main product, a van that cost about $39,000, has a built-in ramp for a person in a wheelchair. It also has room for a driver and three other passengers.

About 25 percent of the VPG models run on compressed natural gas, a feature that helped the company win the DOE loan.