Regretfully, Fisker Automotive has cut three quarters of its staff today in a signal that the end is nigh. We can’t joke about that; those are real people with families to support who are now unemployed, and our hearts go out to them.
Fisker has run into financing problems of late, with founder Henrik Fisker leaving the company a few weeks ago, citing differences with the management. The company has tried to find investors in China, including Volvo’s parent company Geely, but because of its U.S. Department of Energy loan it received, it has been blocked in many cases. Without a source of new funding, in addition to its battery maker, A123, going bankrupt, getting purchased by China’s Wanxiang Group, and changing its name to B456, the company has had to consolidate.
“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,” the company said in a statement. “We expect that at the end of the day we will have retained approximately 25 percent of our workforce.”
At the end of its statement, Fisker said that we could communicate with Sitrick and Company for more information, an outside public relations firm. That means its internal PR crew, whom we’ve met and interacted with, is gone, which is a shame.
“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,” Fisker said. This comes after an announcement last week that it had furloughed its employees for a week.
Over the past year, Fisker Automotive has had three CEOs, settled outside court with its insurance company for a lower amount after many Fisker Karma sedans caught fire and were lost to flood damages in the Port of New Jersey during Hurricane Sandy, endured high-profile fires outside of watery conditions, and have not produced a single car since last year. We drove the Fisker Karma and found it to be a beautiful, but flawed, car. Fisker was supposed to move its production from Finland to Delaware, but its federal loan funding was cut, forcing it to seek out $1.2 billion from private investors.
Recently, there have been rumblings of the company declaring bankruptcy, as it’s even hired a law firm that specializes in bankruptcy proceedings. Fisker employed more than 200 white-collar staffers in the U.S., but we assume that number will be cut to around 50 people. We also assume that the extended-range battery technology developed for the Fisker Karma will likely never see the light of day in the smaller Fisker Atlantic, which was supposed to debut as a 2015 model.
We assume it will likely get worse for the brand that built itself on high-end green luxury that ultimately fell flat with a product that didn’t have enough development behind it. All of a sudden, rival Tesla Motors’s just announced guaranteed residual value plan doesn’t sound that ridiculous.