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Fisker is trying to save a few dollars while it looks for investors

Fisker Automotive's spot between a rock and a hard place looks to be safely secure as it continues looking for financing solutions, and has to make major cuts in the meantime.

Fisker has placed its U.S. workers on furlough this week to try and keep costs down while it searches for an investor. This means that the U.S. workforce will have a temporary, unpaid leave until the company gets back on its feet. 

"This is a common practice, particularly in the automotive industry, to manage costs and operations based on current activity levels and commercial requirements," said Fisker.

Fisker has more than enough issues on its plate right now. In April 2010, Fisker received $529 million in DOE loans, which were part of a program to progress development of high-tech vehicles. The loans were also meant to revamp a closed General Motors plant in Wilmington, Delaware for Fisker EV production. However, Fisker fell a little behind on its production schedule, and in May 2011, DOE froze the loans due to "unmet milestones." Fisker had only drawn $193 million of it at that point. 

Due to these money issues, Fisker is having a hard time securing funds to make its second car -- the Fisker Atlantic. Fisker is now looking for investors to help out with the financial situation so Atlantic production can begin. 

Fisker's investor solution has drawn a lot of criticism though, because two potentials have been Chinese companies -- 
Zhejiang Geely Holding Group and Dongfeng Motor Group Co. This has rubbed the U.S. government the wrong way, since Fisker received U.S. taxpayer dollars to fund its Karma plug-in. 

The Karma itself has had to be recalled in the past too, as battery supplier A123 Systems (which went bankrupt last year) vowed to replace nearly 600 Karma batteries for $55 million in 2012. 

A123 Systems, which filed for bankruptcy in October 2012, was acquired by Chinese firm Wanxiang Group for about $260 million in December.

Earlier this month, Fisker's problems escalated to a new level when Henrik Fisker, who co-founded Fisker Automotive in 2007, stepped down as executive chairman citing "several major disagreements" with "Fisker Automotive executive management on the business strategy."

To make matters worse, Fisker Automotive is expected to make a loan payment to the DOE next month. 

Source: Reuters

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In case anyone is doing the math....
By rdhood on 3/28/2013 1:06:14 PM , Rating: 1
A123 Systems (which went bankrupt last year) vowed to replace nearly 600 Karma batteries for $55 million in 2012.

That is $91666 for each battery replaced. Could this be correct?

RE: In case anyone is doing the math....
By lagomorpha on 3/28/2013 1:44:56 PM , Rating: 2
Just your daily reminder that until battery technology improves significantly, it is not possible to make an affordable electric car with decent range.

RE: In case anyone is doing the math....
By FITCamaro on 3/28/2013 3:16:11 PM , Rating: 3
Won't stop the administration from pushing them.

By superflex on 3/28/2013 4:06:51 PM , Rating: 2
Full speed ahead on the Good Ship Lollipop.

RE: In case anyone is doing the math....
By Flunk on 3/28/2013 3:25:11 PM , Rating: 2
The Nissan Leaf begs to differ, at least for city dwellers with tax credits.

But if your point was that it's not possible to make an electric car that's more cost effective than a economy car that's something I can get behind.

By superflex on 3/28/2013 4:04:41 PM , Rating: 2
The operative words in your statement were "with tax credits".
See, without taxpayer funded credits, the Leaf is a failure as well.

RE: In case anyone is doing the math....
By lagomorpha on 3/29/2013 6:45:04 AM , Rating: 2
Notice I said "affordable" and "decent range".

Even with tax credits the Nissan Leaf costs significantly more than the equivalent gasoline car, and the range is very limited even for city dwellers.

By BRB29 on 3/29/2013 2:37:01 PM , Rating: 2
but it's not about costs. It's about smiles and leaf gives tree huggers 800 smiles per mile!!

"We basically took a look at this situation and said, this is bullshit." -- Newegg Chief Legal Officer Lee Cheng's take on patent troll Soverain

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