Print 27 comment(s) - last by maugrimtr.. on Apr 10 at 11:29 AM

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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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.

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.

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.

"My sex life is pretty good" -- Steve Jobs' random musings during the 2010 D8 conference

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