By on April 18, 2012

Though the Fisker car company tried to put on a brave face at the New York Auto Show, making the public introduction of their proposed midsized Atlantic sedan, the state of the company’s affairs might be better evaluated from what they’ve done farther down the eastern seaboard – effectively shuttering the former GM plant in Delaware where the Atlantic was supposed to be assembled, laying off the 12 remaining engineers and technicians at the facility.

Earlier this year Fisker laid off 66 people at the Wilmington factory. At this point the plant is empty, Fisker having spent millions of dollars, most of it public funds, to remove the old equipment yet not having the money to buy and install a new assembly line. So far all of the cars that Fisker has sold, examples of the Karma luxury sports model, have been assembled under contract by Valmet in Finland. Fisker’s business plan was based on expecting about a half billion dollars in loans from the U.S. Department of Energy. Fisker has used about $200 million of those loans to get the Karma into production and the remaining $300 million or so was intended to get Atlantic production up and running in Delaware. Production delays on the Karma made Fisker miss conditions of the loans so the DoE has currently held up the remaining funds. It puts Fisker in a bit of a Catch-22 situation. They can’t meet the DoE loan conditions without moving forward on production of the Atlantic and they can’t move forward without the loans. Fisker is scrambling to find private funding but I believe that with the latest layoffs, we’re starting to see Fisker circle the drain.

Factories are expensive, and they make money only when they are producing things to sell. If they’re not currently manufacturing goods at the plant, and with no production in near sight, it was probably wise not to spend any more money on the facility. Newly hired Fisker executive, former Chrysler CEO Tom Lasorda has made some noises about Fisker looking at other options besides the Delaware facility. The problem for Fisker is that their entire business plan was based on getting money from the federal government and other assistance from the state of Delaware conditional on building cars in that same Delaware plant. If Fisker walks away from Wilmington, they’re on the hook for that same $200 million that they’ve borrowed in addition to what they’ll need to set up shop somewhere else. There’s just no way they’re going to find private funding with that hanging over their heads.

Fisker continues to negotiate, behind closed doors, with the Energy department in Washington. At the same time, the only remaining workers on site in Delaware are a small security and maintenance staff for asset protection. I don’t know if it’s part of Fisker’s agreement with Delaware or just another sign of the company’s seemingly dire financial situation but the electricity bill for whatever lights that are still on at the facility and other utility bills for the plant are currently being paid by the state.

Ronnie Schreiber edits Cars In Depth, a realistic perspective on cars & car culture and the original 3D car site. If you found this post worthwhile, you can dig deeper at Cars In Depth. If the 3D thing freaks you out, don’t worry, all the photo and video players in use at the site have mono options. Thanks for reading – RJS

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12 Comments on “After Latest Layoffs, Fisker Delaware Plant “Empty”: Time for Fisker Death Watch?...”

  • avatar

    It is time for Fisker USA to be put in receivership.

  • avatar

    On second thought – definately yes.

  • avatar

    The Fisker Karma is a gorgeous car, but it’s a toy for the 1%, and no company that exclusively builds toys for the 1% should have access to perpetual federal assistance.

    Whoever wins the White House will have to find ways to tighten the nation’s belt…’little’ half-billion dollar allocations like this really add up.

    If you’re depending exclusively on handouts, not profits, to run your business, you probably shouldn’t BE in business.

  • avatar

    I recently viewed the movie “Revenge of the Electric Car.” Elon Musk and Tesla Motors wenth through a similar cashflow bind and their IPO saved the (company for at least one more) day, and then the DOE loans came through as well.

    If either Tesla or Fisker is still in business five years from now, I’ll be amazed (and happy too).

    The company that made the EV I used to own, Jet Industries of Austin Texas, also didn’t make it very long 30 years ago (and low gas prices in the 1980s didn’t help things either).

    • 0 avatar

      The huge difference between Tesla and Fisker is that Tesla has been very successful at finding private funding in addition to public funding.

      The notable ones are Toyota, Panasonic, and Daimler. Each of which are investors, technical partners, as well as customers (e.g. RAV4 EV). As well as high-profile investors like Google founders, Sergey Brnn and Larry Page.

      Tesla also benefits from having a VERY mature battery partner in Panasonic. Pansonic-Sanyo has been the supplier for the original Tesla Roadster, and is also the supplier for the Prius, Honda Hybrids, Ford Hybrids, as all as GM hybrids. They are they dominant player in the hybrid/EV battery market. Which allows them to avoid the growing pains of suppliers like A123, which has caused Fisker a lot of embarrassment.

      But Tesla did luck out. They were able to secure NUMMI for a paltry $42M. Its a factory deal of the century given that it came with tooling and skilled work force ready to operate it.

      But the entire success/failure will depend on the Tesla S. If Tesla goes through high-profile failures like Fisker, the it’ll share its fate.

  • avatar
    Robert Schwartz

    Death watch? Do you have any proof that it was alive?

  • avatar

    They better hope that the people who have plunked down cash deposits don’t start asking for them back in light of the bad news that has been coming out. That loss of cash could quickly kill them.

    Dealers may also be on the hook for any unreimbursed warranty payments once the cash dries up. And then there are the current owners who will suddenly have some very expensive orphans on their hands. Didn’t we just go through this with Saab?

  • avatar
    D in the D

    I am sad for the people I once worked with at this site, so I will try and phrase this concisely.

    If this were software, these guys would be vapor-ware KINGS! They had no business taking Federal funds with no valid business plan or experience in executing anything like mass-producing an automobile. Thank Joe Biden for this $529 million debacle. He should have allowed re-development/re-purposing of the former GM site. Once again, we see people in charge who have NO CLUE which end is up. /rant

    • 0 avatar

      The regime isn’t clueless. They gave the money to campaign contributors and they’ll receive a portion of it back in campaign contributions. Damaging our future with wasteful spending on dead ends is just gravy.

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