Published on August 21st, 2012 | by Christopher DeMorro
Fisker’s Bad Week: Of Fires, Firings, And A Cash Shortage
Last week was an onslaught of bad news for Fisker Automotive, maker of the $100,000 Fisker Karma. The Irvine, California-based company was forced to recall its cars due to a fire hazard while a major investor told the press that the company needs another $150 million to build its next car.
To top it all off, Fisker even replaced its CEO for the second time this year. Is this the beginning of the end for Fisker?
No Money, Mo’ Problems
If you ask me, Fisker’s days were numbered when the Department of Energy denied the plug-in hybrid maker access to more than half of a $529 million government loan guarantee. Fisker failed to live up to its end of the bargain, and the government said “No dice”, cutting off much-needed cash flow to the new car company.
How bad is the money needed? According to Ray Lane, a Fisker managing partner and director, Fisker “…need[s] money to fund development of the next car.” That car, the Fisker Atlantic, will be a $60,000 plug-in hybrid electric sports car, and Lane estimates it could take another $150 million to bring to market. This is on top of the $1 billion plus (including $400 million raised just this year) Fisker has already garnered from private investors, some of whom are suing the automaker.
Seriously, Another Recall?
But wait, it gets worse! Yesterday Fisker issued a recall for all of its Karma models regarding a faulty cooling fan that led to one customer’s car catching on fire. This is the second fire-related recall for the Fisker, another blow to electric car advocates everywhere.
While the fire had nothing to do with the battery, bad press is bad press, and you can be sure right-wing pundits are already spinning this story. And that brings us to the cherry on top of Fisker’s disaster sundae.
The CEO Shuffle
After an apparently long courtship, Fisker has replaced CEO Tom LaSorda with Tony Posawatz, who for the past six years has headed GM’s Chevy Volt development team. LaSorda’s tenure didn’t even last six months, having joined Fisker as CEO at the end of February to replace founder Henrik Fisker. The automaker also named Joseph Chao head of Chinese and Asian operations, and Alberto Gonzalez is the new VP of manufacturing.
Posawatz’s main goal will be to bring the Fisker Atlantic to market. But with recalls, a lack of funding, and a constant shifting management field, Fisker’s ship seems to be sinking. It is hard to imagine why anyone would want to invest in Karma when even the government is turning them away.
Maybe Posawatz can right this boat…but the odds are certainly stacked against him.