this post is dated 11-19-2009
GTM Transaxle Update from FFR
<HR style="COLOR: #d1d1e1; BACKGROUND-COLOR: #d1d1e1" SIZE=1><!-- / icon and title --><!-- message -->Guys,
I've received a number of e-mails and questions about our Quaife Transaxle so I figured I would give you guys the most current update. The short story is that we have about 14 orders right now. We placed our original order with Quaife and while some prices have recently been increased, our target sale price has stayed the same. The problem, quite frankly, is Shelby. The current litigation is costing a lot of money and while we are doing well, we simply lack the $360,000 required for the inventory. I had hoped to negotiate the initial transaxle order into four separate shipments, thereby spreading out the cash flow hit. Unfortunately, with the ongoing specter of the legal bills, I have to make the difficult and unpopular decision to delay the transaxles. I had already put off this decision under the assumption that the legal extortion from Shelby would be behind us a month ago.
I've communicated our decision to delay this order with the guys from Quaife and while they are certainly not happy, they understand. I've asked Sandra in accounting to return people's order money (which has always been in a dedicated account) and will honor the original prices to those folks when we go forward with the transaxle in the future. I estimate this will be within 6 months, and base that estimate on the worst case cost projections of the Shelby lawsuit.
One of the challenges is to remind folks that we are a small company without any investors and projects constantly compete with each other. My decision is just one of many that are made on a daily basis to pick projects and new products in the right sequence. The real burden that this Shelby lawsuit has placed on the company has been tough. I suspect the timing was no accident but the real result is only that it rearranges priorities and takes out valuable resources. Shelby notwithstanding, we're doing great and there is no scenario whereby he can do anything to us other than delay our constant and inevitable growth.
In the meantime, while there are existing transmission options, I can only say that the reason behind this effort is unchanged and that is namely that the cost of a simple Porsche gearbox has been so terribly inflated that it requires us to market a better and lower cost option. The only thing that has changed is the timing and I hope my post here answers any questions and puts to bed any rumors.
David Smith
President