Fisker Automotive Lays Off 75 Percent of Staff, Catches a Federal Lawsuit
April 8, 2013 12:17 PM
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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