Fisker Edges Closer to Bankruptcy as New Details Emerge

Fisker_Karma_side

The travails continue for Anaheim, Calif.-based Fisker. Executives at the struggling plug-in-vehicle maker met with Congress Wednesday, and new details emerged on Fisker's government dealings.

It goes like this. The U.S. Department of Energy approved $529 million in low-interest loans to Fisker in 2010 as part of its $25 billion Advanced Technology Vehicles Manufacturing program, which met political fire and ceased loans to any companies in 2011. But now the Detroit News reports Fisker received $32 million in program loans in February 2011 under the notion — as required by the DOE — that it had begun to build the Karma plug-in sedan. Karma production did not, in fact, begin until months later. The federal government found out, and in June 2011, after receiving $192 million of the $529 million awarded, Fisker lost its D.C. sugar daddy.

That began a downward spiral. The Detroit News notes that in late 2011, the Energy Department covertly allowed Fisker an extra year to meet its production targets, fearing a default on payments if it didn't. The department began monitoring Karma orders, uncovering other wrinkles. One example: Vehicle software would lock the cars automatically after eight minutes and trap some owners inside. Fisker updated the car's software but never issued a recall.

Internal documents now show Fisker bled more than $500 million between January 2010 and October 2011. The automaker laid off three-fourths of its workforce on April 5. The Detroit News estimated that at that time Fisker's coffers held just $30 million — a pittance, given the company had earlier raised more than $1 billion from private sources.

It's likely it has even less cash today. The Energy Department seized $21 million in a collateral account after Fisker failed to meet a loan payment this month. One company official told Congress the automaker may consider bankruptcy — a situation that seems more imminent by the day.

Related
Fisker Lays Off 75% of Workforce as Bankruptcy Looms
Cars.com Reviews the 2012 Fisker Karma
More Fisker News

Comments 

Re@lity

"Fisker lost its D.C. sugar daddy."

Please leave the vulgar writing to the actual car rags, like Car & Driver. You're a car consumer website that loves to always push how family oriented you are... so this type of writing is unnecessary.

Sounds like the loan they got was based more on political cronyism than on merit. I'd love to see more EV's on the road but everything I read about this company is bad news.

takeanotherlook

3 ev companies failed because CHINA was subsidizing its companies that dealt with BATTERY TECHNOLOGY AND THE USA was not. NOW CHINA about to get the technology from MIT based engineers that was locked up in A123 company for pennies on the dollar. TECHNOLOGY we cannot afford to lose because so many jobs hang in the balance. NO, i don't think the USA should have been bankrolling companies that put production facilities in Finland.However we should have supported Battery COMPANIES BASED IN THE USA
we will now lose around 15 other companies because we are so shortsighted.

GXP

No one can spend your money better than our Harvard educated President. Now give him some more.

Dodobreeder

It's a beautiful vehicle, sexy and sassy.

Maybe some niche automaker can take the body and sell it with a conventional ICE and choice of transmissions, starting at around $25, and go upwards from there with packages and options.

I know my wife would love to have one sit next to her 2006 Mustang GT 4.6.

Cusanelli

What happens when you price your cars at the 10%ers ONLY price range and have no history to back it up? Death of a company.... Tesla is next.

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