Fisker Automotive Lays Off 75 Percent of Staff, Catches a Federal Lawsuit
April 8, 2013 12:17 PM
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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.
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
, 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
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.
The Detroit News
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4/8/2013 2:37:37 PM
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.
4/9/2013 8:32:55 AM
I am middle class along with most of my friends and we all can afford 50-75k cars easily. To get the 100k cars, like some of my friends buying BMW 7s and 911 carreras, they have to save some money for a larger down payment. But that doesn't take long since they make 150k+ a year.
What's so hard about 1k a month when you are taking home 5k+ a month?
Affordable doesn't mean cheap, affordable means "able to afford" within your means lol.
Not all of us are living paycheck to paycheck. I never made good decisions with women but at least I'm responsible financially.
And yes, I've already max my annual contribution to my IRA, TSP accounts annually so please don't say I sacrificed my retirement for a car.
I'm currently driving an Infiniti M37. It cost 60k and with my down payment, 1.9% APR, I'm only paying $550 a month. That's roughly 10% of my net income so yes it's very affordable.
4/9/2013 10:31:05 AM
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.
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