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Electric-assist and retrofit electric motor company Bionx has gone bankrupt and its assets are being sold off.
After cornering the North American electric-assist retrofit market, Bionx suddenly closed its doors and laid off all workers in February 2018, just at the start of the busy Spring season in the bicycle industry.
Apparently, the financial failure of the company is related to a deal with General Motors, in which Bionx was to produce electric bicycles for the auto-maker at a cost of $1000/ea. After finding that the bicycles would actually cost $1400/ea to build, Bionx defaulted on the contract and went into receivership shortly thereafter.
This is not the first time that Bionx has had to reboot. The previous iteration of Bionx was originated by a company called Electric Propulsion Systems (EPS). EPS' Bionx was plagued by quality control issues until the brand was acquired by auto parts supplier Magna International Inc. in 2008.
Under Magna ownership, Bionx resolved many of the quality-control issues and redesigned many aspects of the product. An innovative and extremely lightweight 500W motor hub was introduced and an unobtrusive controller ring was devised with full controls, but without a conventional screen.
Bionx systems are characterized by a proprietary battery, controller, and motor and require company support for even such essential aspects as activating a system. Without the company in existence and supporting the product, Bionx end-consumers and dealers are left with unsupported or non-useable products.
When the company announced going into receivership in February 2018, many people familiar with the company saw it as a blip and expected a new Bionx to rise from the ashes. However, as time has gone on and the phones continued to be unanswered, hopes for a revival have dimmed. Now, Grant Thornton, the accounting and business advisorial company handling the receivership, has announced that most of the assets have been sold and buyers for the remaining assets and patents are being sought.
Bionx had made a significant preseason sale throughout the bicycle industry and many dealers have received Bionx products that they have been unwilling to sell to unwitting consumers, given the lack of warranty, company support, and even essential configuration and activation functionality.
It will make for a lively show as Grant Thornton attempts to collect payment for bricked merchandise or sends those bills to debt-collectors for a more heavy-handed approach. Grant Thornton has refused to take back any of the merchandise that was sold with a promise of company support and basic functionality.
Most Bionx customers were small-businesses. These were bike shops with few employees, which were sold proprietary Bionx product with a promise of functionality and support. Lack of support and basic functionality makes the remaining product close to worthless.
On the human side of the equation, Bionx also employed many good, honest people who worked hard and very competently. These people were all laid off in an instant due to a seemingly negligent miscalculation at a high level of the company.
And, last, but not least, end-user bicycle-riding customers who bought into a premium product based on the manufacturer's promise to support them into the future are left with systems that can not be supported even by third-party suppliers due to the proprietary nature of the design.
- 18-06-21 - BionX Canada sells off parts of its business
- 18-03-27 - BionX reorganization? (they’re NOT calling it a “bankruptcy”)
- 18-03-02 - BionX shuts down as it searches for new owner
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