Print 26 comment(s) - last by BZDTemp.. on Apr 1 at 7:52 AM

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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RE: House of cards
By M'n'M on 3/28/2013 3:58:21 PM , Rating: 2
I would say there's an even better reason. How would you like to be one of Fisker's (or Tesla's) competitors. With Govt pockets backing your competition, it that fair ?

RE: House of cards
By BZDTemp on 3/28/2013 7:24:07 PM , Rating: 5
Which competitors are you talking about?

I for one have a hard time finding any US car companies that have not been award government loans or other types of financial aid. And that is not even including the tax benefits that are awarded to car buyers.

Please name a US car company that has not been given government money just in the last five years.

Lots of businesses are getting either direct on indirect Government money. Sometimes the goal is to keep or create jobs in specific regions and other times it is to help ensure jobs stay in the US or to boost the chance of US companies do well in the global market.

RE: House of cards
By M'n'M on 3/29/2013 12:39:21 AM , Rating: 2
Please name a US car company that has not been given government money just in the last five years.

Aptera Motors. They were a small start-up, not unlike Tesla. Whereas Tesla was saved from closing it's doors by the Govt loan, Aptera was denied.

RE: House of cards
By BZDTemp on 3/29/2013 11:59:56 AM , Rating: 2
Technically I don't think they count as a car company since it was about 3-wheeled vehicles, but ignoring that then yes they did not get access to government money.

However my point still stands. The car industry as a whole has and is seeing lots of government money so when people complain about Fisker getting a loan, they should rather complain about how GM, Ford and Chrysler have been getting government money both directly and indirectly (tax benefits to the customers).

RE: House of cards
By BRB29 on 3/29/2013 2:34:48 PM , Rating: 2
Ford actually pays the loan back with interest and on time.

RE: House of cards
By BZDTemp on 3/31/2013 11:55:51 AM , Rating: 2
Yes, but that is not really the point here besides Fisker may still pull through and be able to repay the loans.

Some people complaining that Fisker was given a loan claiming it to be anti-competitive and making it sound like it was special that Fisker received a loan. However those people seem to have forgotten that the whole industry is getting lots of government help.

RE: House of cards
By Reclaimer77 on 3/31/2013 12:08:08 PM , Rating: 2
Not a chance. The problem with Fisker is, well lets be honest, the product sucks.

Sure they *could* pull a complete 180 and come out with something actually appealing, but meah...don't bet on it.

Musk called it when he talked about Fisker, they put design over function way too much. The engineering on the vehicle is just...well, bad.

RE: House of cards
By BZDTemp on 4/1/2013 7:52:16 AM , Rating: 2
Musk called it...

Musk is hardly an objective observer. If anything he has the most to gain from Fisker going under. Plus lets not forget that Tesla actually sued Fisker and lost big time so he will happily put down Fisker.

But of course you don't give any thoughts to quoting Musk as if he was speaking nothing but truth because it fits well with your own way where anything is either perfect or crap (mostly crap it seems).

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