Honda Suddenly Kills Fuelmaker In Stunning Move That Outrages CNG Movement

This continuing coverage of America’s oil crisis arises from the The Plan: How to Save America When the Oil Stops—or the Day Before

Amidst charges that embattled American Honda is systematically suppressing its compressed natural gas (CNG) vehicle program, the company has suddenly fueled that impression by throwing into bankruptcy its wholly-owned CNG refueling company, Fuelmaker.

Toronto-based Fuelmaker was arguably the linchpin of CNG’s future as a bridge solution to alternative fuel. The firm manufactured and distributed the essential refueling appliance that allowed home-based and fleet refueling of CNG vehicles worldwide, including the Honda Civic GX heralded as the “greenest car in America.”

Fuelmaker appliances at home or at companies excised the need for traditional neighborhood filling stations. The compact, home garage-based CNG refueler was called the Phill. The commercial version called the Vehicle Refueling Appliance could fast fill several vehicles. Some 14,000 Fuelmaker devices around the world, many with fast fill storage capabilities added, are now suddenly stranded by Honda’s action.

Fuelmaker employees, CNG industry leaders, and CNG advocates who learned of the move on the weekend are all outraged. The details, pieced together by this reporter, are as follows:
Last Thursday, April 02, 2009, without notice, American Honda called its loan to Fuelmaker, according to Fuelmaker and Honda employees familiar with the facts. Honda in essence owned and controlled Fuelmaker through a so-called “numbered corporation.” A “numbered corporation, almost unheard of in the U.S., is a commercial entity especially enabled under Canadian law that exists without a recognizable name, identified only by a number. Calling the multi-million dollar note allowed American Honda to walk into a Canadian bankruptcy court and throw Fuelmaker, its own alt-fuel company, into receivership. The well-known receivership firm Alvarez and Marsal was then called in to liquidate everything as fast as possible.

That day, April 2, a lone Alvarez and Marsal receiver, Melanie MacKenzie, arrived at the company offices with the necessary papers. All Fuelmaker employees were abruptly fired without severance or warning, and given just a few hours to gather up their belongings and leave the premises. All Fuelmaker operations were suspended without notice to dealers, clients or suppliers. All assets were immediately placed on the auction block for liquidation.

“I think it is unconscionable,” stated one shocked Fuelmaker employee, who declined to have any name published for fear of retaliation from Honda. Explaining the fear of Honda, the employee stated, “I don't trust those guys. I don't trust them as far as I can throw them. They have lied to me every which way.” One employee added, “Quite simply, Honda has used the bankruptcy courts to avoid paying its employees severance. We were all absolutely blind-sided.”

An American CNG industry source who regularly works with Honda and has defended the company in the past, conceded, “It’s clear. Honda is doing their best to minimize the CNG market. What else can I say.” A Canadian CNG industry source sent cross-border emails, obtained by this reporter, protesting, “Nothing has been communicated to customers and we can expect that dealers will soon be dealing with very irate customers who cannot get parts,” adding, “This was handled very poorly and all of the former 60 employees are left with nothing.”

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