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Electric car-maker Fisker lays off three-quarters of staff

By Alisa Priddle

Detroit Free Press

LAST UPDATED: 11:03 a.m. HST, Apr 05, 2013

Fisker Automotive laid off 161 employees today, according to sources familiar with the company, another sign of deepening problems at the beleaguered electric car maker.

No one was answering phones at the Anaheim, Calif., office this morning, and the public relations staff is among those who have lost their jobs.

But in a release, the company said: “Today, Fisker met with a group of employees in our Southern California office to inform them that this is their last day with the company. Yesterday, we met with a core group of employees in Southern California to express our desire that they remain with the company while we continue to address the challenges before us. We expect that at the end of the day we will have retained approximately 25 percent of our workforce.

“The company regrets having to terminate any of its hardworking and talented people. But this was a necessary strategic step in our efforts to maximize the value of Fisker’s core assets.”

The layoffs come on the heels of the high-profile resignation of company founder and executive chairman Henrik Fisker, 49, last month over disagreements with the direction the company was taking in terms of its business strategy.

Henrik Fisker would not comment on the latest events, referring all questions back to the company that still bears his name. As for his future moves, he said only that he is “looking at different options.”

Details emerging from California suggest while the rank and file have been let go, the automaker is retaining 53 executives and managers to continue efforts to secure financing or sell assets with a deadline looming this month to repay a portion of Fisker’s $193 million in government loans.

Fisker received $529 million from the Department of Energy to develop the Atlantic as a second, more affordable mid-sized car. But a rough launch of the original car, the $103,000 Karma plug-in hybrid, and slow sales prompted the Energy Department to freeze the remaining $336 million in untapped loans.

That forced the company to delay plans for the Atlantic until financing could be secured. Two Chinese automakers reportedly interested in investing in Fiskerdecided not to make an offer. Sources say one issue was the government debt a buyer would assume with the assets.

And last week Reuters reported that Fisker had retained the law firm Kirkland & Ellis to prepare for a possible bankruptcy filing.

Company officials denied bankruptcy preparations, saying they were still looking for investors.

“Our efforts to secure a strategic alliance or partnership are continuing in earnest, but unfortunately we have reached a point where a significant reduction in our workforce has become necessary,” today’s statement said.

Meanwhile, company officials told employees today there was no money available to offer severance.

The startup company has had a rough road since it was founded in 2007.

There was a series of at least three recalls of the Karma luxury sedan, which is made in Finland by contract assembler Valmet Automotive.

Karma production was halted altogether last summer when battery supplier A123 Systems filed for bankruptcy. A123 has sold most of its assets to Wanxiang Group, a large Chinese auto parts supplier.

Plans to build Fisker vehicles at a former General Motors plant in Wilmington, Del., despite a groundbreaking in 2009, never came to fruition.

Even Mother Nature exacted a toll when more than 300 Karmas awaiting delivery were destroyed by Hurricane Sandy last year and the insurance company denied coverage. A lawsuit and settlement followed.

Fisker has sold fewer than 2,000 Karmas worldwide, and Consumer Reports panned the model.

Tony Posawatz is the automaker’s third CEO in a year, joining last summer from his previous job as head of the electric vehicle program at General Motors.

Last fall, Posawatz said Fisker had raised more than $1.2 billion in private equity since 2007.

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iwanaknow wrote:
Did someone's ego get in the way?
on April 5,2013 | 11:09AM
serious wrote:
When Barry endorsed this program, a guy who never worked in his life, I would have shorted it. Stupid. I would have put my money into 100 mile extension cords!!!
on April 5,2013 | 11:32AM
cojef wrote:
Something is rotting in Denmark. It's all about marketting an electric car with limited mileage range that cost over a $100, 000 is ridiculous. Too much emphassis on style and not enough on substance, mileage range without having power up or re-charging batteries. Battery technology is too far behind to make it pay as yet.
on April 5,2013 | 11:26AM
niimi wrote:
I'll bet we, the American taxpayers, will soon own an electric car company called Fiskers. Just like Solyndra, half a Billion Dolllars down the tubes.
on April 5,2013 | 12:06PM
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