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The lawsuit accuses Fisker of not giving employees 60 days notice before the mass layoffs

Fisker Automotive has been on the lookout for a buyer in order to stay afloat, but the automaker is running out of both time and options -- resulting in major employee layoffs.

Fisker announced Friday that it had laid off 75 percent of its staff, which equates to about 160 employees. 

The automaker didn't provide any severance payments or formally alert California about the layoffs. It did, however, pay employees for unused vacation time.

"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," Fisker Automotive said in a statement.

"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."


As if this wasn't bad enough, Fisker is now facing a federal lawsuit that accuses the company of not giving employees advanced notice of the mass layoffs. Under the U.S. Worker Adjustment and Retraining Notification Act, workers are supposed to have 60 days notice before being laid off. 

Fisker could have to pay the employees the wages they would've earned in that 60-day period. 

The lawsuit was filed Friday in the U.S. District Court in Santa Ana, California. 

Fisker had placed its U.S. workers on furlough a couple of weeks ago to try and keep costs down while it searches for an investor. This means that the U.S. workforce had a temporary, unpaid leave until the company got back on its feet. 

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 is seen as an issue because 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 and was later acquired by Chinese firm Wanxiang Group for about $260 million) vowed to replace nearly 600 Karma batteries for $55 million in 2012. 
 
Last month, Fisker's things started getting worse for Fisker 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."

Fisker Automotive is expected to make a loan payment to the DOE on April 22.

Source: The Detroit News



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Again
By FITCamaro on 4/8/2013 12:33:47 PM , Rating: 4
The United States government has no business playing venture capitalist. Wouldn't surprise me to see this company ending up with a Chinese firm as well.




RE: Again
By Brandon Hill (blog) on 4/8/2013 12:39:22 PM , Rating: 2
What are you thoughts on Tesla vs Fisker? Seems like Tesla is working out (so far), whereas Fisker seemed doomed from the start.


RE: Again
By hartleyb on 4/8/2013 1:17:29 PM , Rating: 1
Yes Tesla is profitable, but only because they have marketed to the rich and famous. Even Tesla admits if it made a car that could be sold to the middle class it doesn't have the production capability and parts capability to meet supply and demand. Even with a large amount of investment Tesla believes it would take about 10 years to get to a sustainable and supportable production level for selling a cars to the mid-income level. Tesla's current max production is only around 2670 cars a year.

Fisker’s would have survived if they had followed Tesla's model for selling cars, and if they had used quality components, and done through safety testing similar to Tesla. That being said, even if both of these car companies where successful, neither of them would reach a production level necessary to market to the middle class for another 10 to 15 years. The big three have the advantage of a built in parts and supply line production that makes it easy for them to ramp up production. If Tesla or Fisker ever threaten the big three with sales, you will see the big three crank up and sell all electric cars at a price point that neither Fisker nor Tesla could compete with. Also Tesla has sold the rights to their battery technology to Toyota making it very difficult for the company to compete should they have any competition.
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RE: Again
By BRB29 on 4/8/2013 2:15:12 PM , Rating: 2
2670 cars a year?
Last I checked, they were producing 500+ a week.

Tesla's plans has always been selling their initial vehicles as flagships and to the rich. Sell their less expensive, mass produced vehicles to the middle class like they are doing now.

The high price of their flagship products was to pay for some of the R&D cost that eventually goes into the mass produced vehicle like the Model S.

They have the right idea from the start and are actually using all their assets and resources efficiently. They sold their battery tech to Toyota to raise funds. Toyota is not a direct competitor. Toyota has no current plans on competing with Tesla in the 50-100k EV market. Their closest competitor was Fisker.

The model S is for the middle class and meant to sell in urban areas. They went after this market segment because they cannot make it cheaper so they put more money into making it a luxury vehicle to justify the price. They are doing very well despite set backs. The day a proper EV like the model S are affordable, you can thank Tesla. They are the one pushing the industry into mass producing high capacity batteries and powerful electric motors. The Volt also.


RE: Again
By FITCamaro on 4/8/2013 2:37:37 PM , Rating: 2
What cars do they offer that are at all affordable to the middle class?

The Model S costs over $1000/month financed at just under 3% for 6 years. They try to play it off as far cheaper by saying "hey look at the effective cost" when that "cost" includes using it for business which the vast majority of people can't do. Remove that and even the "effective cost" goes to $694/month. They try to say it saves you almost $300/month in gas too which assumes 19 mpg. Jack that up to 40 mpg and its closer to only $100 in savings. "Effective cost" goes back up to $874 a month. That includes though $40/month from guaranteed resale value. Which means nothing to you to pay the payment every month. "Effective cost" really is $914/month. There is the tax credit which is legit but you still have the actual monthly payment of over $1000/month.

So again, tell me how this thing is affordable to the middle class.


RE: Again
By BRB29 on 4/9/13, Rating: 0
RE: Again
By lemonadesoda on 4/9/2013 10:31:05 AM , Rating: 4
You are affluent. On a top bracket income. You work hard, are well educated, and deserve what you earn. But you cannot compare yourself or your friends to being "average middle class". You are not, even through you might label yourself as such. If your net monthly income is over $5000 then your gross is much higher, and you are in the top 5% of earners. Hardly average.

http://en.wikipedia.org/wiki/Personal_income_in_th...

These cars are not family cars. They might be the only car for a single professional, or a second car in a family. The price and that level of investment is not realistic for the average middle class family.


RE: Again
By scavio on 4/8/2013 2:21:23 PM , Rating: 2
Tesla estimates that they'll ship 20,000 cars this year. That may not be much, but it's far more than the paltry 2670 you pulled out of your butt. Toyota is a financial partner of Tesla, but I don't think they "sold" any of their tech (it's more of a Microsoft/Facebook type arrangement from what I can tell).

The reason Tesla is doing well is because they made a very good car and have great leadership. If anything, Fisker is the one who marketed to the rich and Telsa has portrayed themselves as eventually being electric car for the masses.


RE: Again
By scavio on 4/8/2013 2:44:39 PM , Rating: 2
By the way, when I say they didn't sell the technology, I mean that quite literally. They may have done what amounts to a licensing deal, but that is not the same thing (and I'm pretty sure Daimler licenses the tech as well).


RE: Again
By Samus on 4/8/2013 11:52:17 PM , Rating: 2
The Ford Model T cost a hell of a lot more than a horse and carriage when it came to market too.

I guess it was marketed to the rich and famous?


RE: Again
By maugrimtr on 4/10/2013 11:29:19 AM , Rating: 2
Will never understand the lack of business sense demonstrated by all these free market proponents... The free market has a model that works. They design a product. They sell really expensive versions of the product to early adopters. If that's a success, they can roll out a wider range of similar products at lower prices/less features (maybe) to grow their market. Then maturity, decline, new product, yada yada yada.

Anyone who doesn't understand Tesla's incredible success just doesn't understand basic business, marketing and economics. Compare them to Fisker and spot the difference.


RE: Again
By FITCamaro on 4/8/2013 2:29:09 PM , Rating: 2
You throw enough darts, some will obviously hit the target. Even Fisker probably won't survive long term though. Once the rich have their toys, they'll be done buying. And prices won't be pushed down anywhere near fast enough for them to expand their target market/price point. They might survive is a larger manufacturer buys them though for their tech.

And that nationwide free charging network? Yeah that'll last. Solar cells require maintenance and replacement. Just facilities in general require maintenance. They'd have to build in thousands of dollars of overhead to the price of each vehicle to maintain that. Unless they're getting tax dollars to pay for it which I'm also opposed to.


RE: Again
By Drexial on 4/8/2013 2:57:31 PM , Rating: 2
Screw it, I'm just going to copy and paste this to every article I see this same argument come up in. this was from Fridays article about Tesla... this is just going to keep happening, and I will just keep making the point till it doesn't come up anymore. I'll just merge the two posts I made, might not be as coherent, but the points are there.

I don't understand how the same arguments pop up every article. This is a start up company with a product that has start up costs with a developing product. EVERYTHING has been a toy for the rich before they get cheep enough for the masses.

Go ahead and tell me a product that went straight into mass production for everyone and was affordable for everyone on release.

The Model T was not the first car, mobile phone companies didn't start with plans offering a free phone, you couldn't snag a 50" 1080p LCD from target when they first hit the market. Hell when 720p plasmas first went on the market, you could have bought a Model S with how much they cost.

This is also only the companies second product, and the first one was $110,000 and that was a shared platform with Lotus. This is a completely fresh platform built from the rubber to the roof in house at Tesla. It gets 3 times the range and is larger better performing and can seat up to 6. and costs 30k less on the high end. These cars are only going to get cheaper as battery production and technology advances.

People keep saying that batteries need to advance before this becomes viable. Well there needs to be a demand for them to put money into advancing them. That demand is at first going to cost the early adopters. Then it will trickle down to the every day man.

They have already stated that after the X there are plans for a more economical car. I believe the target was under $20k. Which given it would be smaller and lighter, I could see them easily getting fiesta/focus sized car over 200 miles in range for less then $20k by the time that comes to.

I would say that the Model S is at least equivalent to the 5 series as far as how well equipped it is.

As far as having a car for under $20k. It would only need half the HP of the lowest optioned Model S, giving it around 150 HP, which is about average for a Focus/Cruze sized car. The battery wouldn't need to be as strong given the reduced power, this would also reduce weight, which would in turn require less power from the battery. Figure a car weighing between 2800-3200 lbs. I cant wait for instant torque in a car like that. Swap in the motors from a Model S, tweak the software, upgrade the batteries. There will be a future, and it will be an interesting one for electric cars.

I see this being possible fairly soon, of course with inflation that goal might be more of a $20k car when it comes out.


RE: Again
By FITCamaro on 4/8/2013 3:53:19 PM , Rating: 2
You only have to look at the Volt to know that it isn't true that a cheaper electric car will be affordable. The Volt is still $35,000 even with the subsidies. Course you're still paying a payment of far more than a $35,000 car would imply. Sure removing the engine would lower its cost but would make the range only 40-50 miles. So you need to double the battery size at least which would probably cost more than removing the engine would save. You might get the subsidized cost down to $30,000. But even that is too much for a compact car for most people. And you're still talking over a decade to pay off the difference between that and a Cruze.


RE: Again
By bug77 on 4/8/2013 5:54:49 PM , Rating: 3
quote:
People keep saying that batteries need to advance before this becomes viable. Well there needs to be a demand for them to put money into advancing them.


This is another argument that keep returning, so I'll repeat myself, too.

Battery development is not a new industry that just came along with the advent of the electric vehicle. This industry is over 100 years old. Since the advent of LiPo and LiIon, nothing ground breaking has hit the consumer. And that was over a decade ago and based on technology from the 70s.
I don't know why people think that by throwing money at the problem, it will solve itself in a few years; you were saying something a little different, but my point stands: batteries will not change any time soon.


RE: Again
By mike66 on 4/8/2013 8:35:07 PM , Rating: 2
They already have advanced recently, they have found that putting broken carbon nano tube fibers in lithium based batteries reduces the charging time so rapid charging has become viable.


RE: Again
By Drexial on 4/8/2013 3:01:43 PM , Rating: 2
I realize this probably wasn't the comment I should have tagged the other response to.

Fisker did a lot wrong. but really for any other high performance car,did they start on fire any more then a Ferrari or Lamborghini? Those cars can cost twice as much and dont have a high voltage system in them (well now they do).


RE: Again
By marvdmartian on 4/9/2013 7:52:43 AM , Rating: 2
quote:
Fisker is now looking for investors to help out with the financial situation


Precisely! THIS is what should have happened, long before the US government thought about helping out. Allow a company to flourish, or die, based on its capabilities and ideas, versus solely on a big, fat Energy Department loan, which it knows it may never have to pay back.

I swear, if we find out that even ONE of this company's executives got a bonus, then someone needs to go to jail.


RE: Again
By random2 on 4/9/2013 10:17:08 PM , Rating: 2
Good thing they didn't bail out wall street and almost all the major banks then. Oh and the American Automotive industry...them too.
Every time I hear this, I think to myself, if the bail outs didn't take place, just how much would Americans appreciate having to work for the new Chinese owners?


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