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Fisker Lays Off Workers, Seeks New Government-Loan Terms

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2012 Fisker Karma EcoChic, New York City, Jan 2012

2012 Fisker Karma EcoChic, New York City, Jan 2012

Enlarge Photo

The bad news just keeps on coming from electric-car startup Fisker Automotive.

The company said today that it has laid off employees and contractors at both its new Anaheim, California, headquarters and its assembly facility in Wilmington, Delaware.

Layoffs by car companies are hardly new, but Fisker was granted $529 million in low-interest loans by the U.S. Department of Energy under its advanced-technology vehicle manufacturing program.

Now Fisker is reportedly trying to renegotiate the terms of that loan, having missed critical deadlines in the development of its second vehicle, a mid-size plug-in sedan known as Project Nina.

The company has claimed that much of the work on the Nina vehicle--design, engineering, and development and testing--is already done.

In October, Fisker said full production of Project Nina won't begin until mid-2013, though the company insisted at the time that some production will occur place before the end of 2012.

According to the Associated Press, Roger Ormisher, a Fisker spokesman, said the company hopes it can "reach a resolution soon" with the Department of Energy on revised terms.

2012 Fisker Karma EcoChic, New York City, Jan 2012

2012 Fisker Karma EcoChic, New York City, Jan 2012

Enlarge Photo

Under the same DoE loan program, startup Tesla Motors [NSDQ:TSLA] also received loan guarantees of $465 million, though the big money went to established carmakers Ford ($5.9 billion) and Nissan ($1.4 billion).

Thus far, Fisker has drawn down approximately $193 million of the loans. Under the terms of the loan agreement, a maximum of $169 million was allocated to complete the development of the 2012 Fisker Karma, a range-extended electric luxury sport sedan that started deliveries very late last year.

The Karma has had significant teething troubles, with several delays in the announced launch dates and two recalls, one to prevent a battery-pack leak and the other to update software.

It was also rated at a mere 20 mpg by the EPA in range-extending mode, when the 2.0-liter gasoline engine switches on to power a generator that sends electricity to the pair of electric motors that turn the rear wheels.

A further indignity: The low, sleek Karma sedan was rated a subcompact by the EPA, based on its limited interior volume. As we learned during our brief test drive in New York last month, the car is somewhat tight inside--although not necessarily cramped.

2012 Fisker Karma EcoChic, New York City, Jan 2012

2012 Fisker Karma EcoChic, New York City, Jan 2012

Enlarge Photo

The layoffs announced today included 40 employees and contractors in Anaheim, and 26 workers at the Wilmington plant.

According to trade journal Automotive News (subscription required), the company had 650 employees in Anaheim last month, along with about 100 in Delaware.

The goal is for Fisker Automotive to conserve its cash while it attempts to renegotiate the DoE loans and seeks additional sources of equity.

Late last month, the company doubled the size of its Series D funding round to $300 million, of which it has $243 million already committed.

That brings total private investment in Fisker to $866 million, along with the $529 million of DoE loans.

Critics have suggested that startup electric carmakers Fisker and Tesla are vulnerable to the same charges of improper influence being levied after the collapse of solar-cell manufacturer Solyndra, which also received DoE loans.

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Comments (10)
  1. You forgot the ever growing base price.

    It's seems like Henrik Fisker only started this brand so he could design pretty cars. The company doesn't seem very well composed and the only thing the car does well is look good design wise. They've been able to pull in a lot of money but it's like they have no idea what to do with it. And here's the biggest question I have, if the Nina project is doing so well, where is it? They haven't even shown a few teaser photos, where is the Nina concept car, Tesla had a concept version of the Model S and is about to unveil it's concept Model X, why has the public not seen the Nina? I was looking at a Karma myself but decided that the car wasn't worth it's asking price. Go Tesla!
     
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  2. Agreed on the first point. Mr. Fisker knows a thing or two about design, but the drivetrain concept is a disaster. Elon Musk's assesment of serial hybrids is correct: EV+ range extender wants to be the best of both worlds but the whole thing gets extremely complex, heavy and expensive and ends up being neither fish nor fowl. Ideally Fisker should leave the electrics to Tesla at this point and offer the Karma as an all ICE luxury sedan, but it's way too late in the game for that.

    Not showing the Nina seems like a sound strategy though: it's what Tesla would do but it only serves to distract attention from the car that's on offer now.

    Let's hope Fisker can turn things around because what the EV industry doesn't need is another Solyndra...
     
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  3. I can agree with you aswell, the drivetrain is not only complex it actually takes up quite a lot of space in the Karma. The interior is a bit cramped due to the battery pack that runs from front to back right through the middle. When I sat in the back seat my head touches the ceiling and the rear seat feel narrow. And the trunk is really tight I think there my be just enough hight in there for a gallon of milk to stand up, but I'm not sure. It's total trunk and interior space is effected by the mass of its drivetrain, just like the Volt with its massive T shaped battery, but the Volt is designed well enough that you could live with it, the Karma as big as it is, is only good as a secondary weekender car. Porsche 911s have more usable space.
     
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  4. Yep, a range extended EV has many parts that drive up cost and eat up it's interior space:

    "According to Axeon Power Director of Business Development North America Michael Muzzin, electric vehicles, such as the plug-in hybrid electric Chevrolet Volt, have more than 300 major components, compared to advanced gasoline engines, such as the Bugatti Veyron W16 Engine, that have around 100"

    Source:http://www.mlive.com/auto/index.ssf/2012/02/officials_electric_vehicle_ado.html

    Hard to match a cumbersome powertrain like that with a sleek design.
     
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  5. Has anyone ever wondered, besides me, how many of these companies that are going under and pricing themselves out of the market are owned by republicans? Maybe someone should start asking these company CEO's their political affiliations. It is common knowledge that republicans hate anything that has the words 'clean energy', 'zero pollution', or 'environmentally friendly' in it, and they are known oil gluttons.
     
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  6. It's hard to say but they would be the ones who would compare Tesla and Fisker to the failed Solyndra in hopes of making Obama look like a fool so they can win the Presidential election. I don't think Republicans are oil gluttons, they fight on behalf of the oil industry because they've been well paid to do so, and they also want to oppose the Democrats at any cost, even if the cost is the health of our environment, our financial well being, and the lives of a few thousand American soldiers. But I don't think this will be the end of Fisker Automotive, as I said before Fisker seems to have worried about its image first and it's technology and company stability second, I'm fairly sure that they can get past this.
     
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  7. Okay, CD; I agree with you on all points. It would be a real shame if Fisker went under. I can't understand why they all are not taking pointers from Tesla since they seem to be the best electric carmaker in America...with the best of everything.
     
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  8. I agree with your criticisms of the Republicans, but let's not gloss over the Democrats: They are also extremely well paid by the oil companies; they will oppose the Republicans at any cost (Fanny and Freddie reform); and the Dems also voted for both wars. Hold them accountable for the same mistakes you blame on the Reps.

    Fisker appears to be a badly run company--whether more technologically or administratively, who knows? But securing more funding will and should be an uphill battle. If private investors can't see a company worth saving, then maybe taxpayers shouldn't have their pockets picked again for a lost cause.

    I like the car. I hope they make it. But I also don't want to see more of my money disappear down a sinkhole.
     
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  9. For the record I don't associate myself with either party, I'm dissapointed with the job either of them do. But as far as electric cars go its the republicans that you have to look out for, they'd kill electric cars just to oppose the democrats and satisfy their oil industry masters.
     
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  10. Sorry to disappoint everyone who seems to enjoy taking pot shots at Fisker Automotive after reading this article, but the issue with the DOE loan has NOTHING to do with any delays on Project NINA. The truth of the story was there was a substantial delay (5-6 months!) in EPA certification of the Karma and that is the primary reason they missed their DOE benchmark. This is either a classic case of one arm of the government not knowing -- or not caring -- what the other arm is doing -- or the DOE has being intimated by the political firestorm surrounding the government's loans to Fisker and Tesla). The following articles are relatively objective:
    http://www.delawarefirst.org/22590-fisker-layoff-delay
    http://www.autoweek.com/article/20120206/
     
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