Breaking News: Fisker Fights for its Future
It was a bad sign recently when Henrik Fisker, co-founder and executive chairman of Fisker Automotive, stepped down from the company that bears his name. Reported to be the result of "disagreements with management," Fisker's resignation was “not expected to impact the company’s pursuit of strategic partnerships and financing to support Fisker Automotive’s continued progress.”
News reports this morning indicate the struggling company has furloughed about 160 employees -- approximatelty 75% of its staff -- in an effort to conserve cash and delay a potential bankruptcy filing. The automaker said it was "a necessary strategic step in our efforts to maximize the value of Fisker's core assets." A report at Reuters says "Fisker asked 53 senior managers and executives to stay on board, primarily to pursue buyers for the company's assets… The remaining Fisker executives also are continuing negotiations with the U.S. Department of Energy." Apparently, the company could not even afford to give severance payments to the terminated employees.
Best known for its $100,000 Karma plug-in hybrid sedan, Fisker sold about 1,800 units before production was suspended in late 2012. Lauded for its performance hybrid powertrain and luxurious presentation, some see the Fisker Karma as no more than a boutique exotic car, a rich person's green toy. The Karma received a failing grade from Consumer Reports, citing numerous shortcomings, including reliability issues as well as compromises in the car's basic design and quality of execution.
In 2009, the Department of Energy awarded Fisker $529 million in loans as part of an Obama administration program to finance advanced vehicle development; the company has a loan payment of about $10 million due on April 22, but is hoping to renegotiate. Fisker Automotive is also currently seeking a backer to help support the development of the Atlantic, a second, lower-priced plug-in hybrid it expects to produce at a former General Motors plant in Delaware.
Reuters sources say that Fisker is now open to selling off pieces of the company, including intellectual property rights for its plug-in electric hybrid technology. Other reports indicate Fisker has hired law firm Kirkland & Ellis to advise on a possible bankruptcy filing.