The future of Fisker Automotive remains in the balance as the electric vehicle start-up company laid off 75% of its workforce on Friday amid speculation that it is heading for bankruptcy.
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The layoffs come in the wake of the resignation of company founder and executive chairman Henrik Fisker last month, apparently over disagreements with the direction the company was taking.
This is the latest of a number of problems to hit the company which was formed in 2007. There have been at least three recalls of its Karma luxury plug-in hybrid sedan which is assembled in Finland by contractor Valmet Automotive.
Karma production was halted altogether last year when battery supplier A123 Systems filed for bankruptcy and plans to build Fisker vehicles at a former General Motors plant in Wilmington, Delaware, fell through.
Last year more than 300 Karmas awaiting delivery were destroyed in transit by Hurricane Sandy and a dispute with insurers followed. The launch of the mid-size sedan, the Atlantic, was delayed by a lack of financing as Fisker struggled to find investors.
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By GlobalDataThe company received US$529m from the US Department of Energy to develop the Atlantic but, after the Karma’s rough launch and slow sales, the DOE froze US$336m in untapped loans. Fisker has sold about 2,000 Karmas worldwide.
Reports last week suggested that the EV maker had appointed a law firm as a possible lead-in to filing for bankruptcy.
On Friday the company laid off about 160 of its more than 200 employees. Those affected said they had no warning and had only been compensated for untaken holiday.
Those remaining are understood to be senior managers and executives
Over the past few months Fisker has been keen to find a partner or buyer to ease pressure on its finances but potential deals with at least two Chinese companies have fallen through.
A statement from the company said: “Over the last several months, Fisker Automotive has been considering strategic alternatives that would allow the company to work through its current financial challenges.
“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.”
Local media reports suggested the layoffs included the entire PR team, which may explain why the company’s website press section was last updated with news of Henrik Fisker’s departure on 13 March.
The brand’s largest dealership in Orange County, California, has reportedly been offering large discounts on cars with a staff member quoted as hoping GM could help with spare parts support (it supplies a number of components including an engine) should Fisker go out of business.
