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Transportation Government

Fisker Lays Off Most Workers, Plans To Shop Around Remaining Assets 276

Posted by timothy
from the now-about-all-those-tax-dollars dept.
After being saddled with a half-billion dollars in loans from the U.S. Department of Energy, electric car manufacturer Fisker just can't catch a break. It's not just the cars; it's the company itself. From a Reuters report: "In a statement, Fisker confirmed that it let go about 75 percent of its workforce. The automaker said it was 'a necessary strategic step in our efforts to maximize the value of Fisker's core assets.' A Fisker representative could not immediately answer questions on the company's financial position. In the past, the automaker has declined to comment on the possibility of bankruptcy. ... About 160 employees were terminated at a Friday morning meeting at Fisker's Anaheim, California, headquarters, according to a second source who attended the meeting. They were told that the company could not afford to give them severance payments."
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Fisker Lays Off Most Workers, Plans To Shop Around Remaining Assets

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  • by Impy the Impiuos Imp (442658) on Saturday April 06, 2013 @10:32AM (#43378365) Journal

    Well, either treat it like NASA if it's so damned important and plow uncounted tens of billions into it, or get out. Trying to be like venture capitalists, but idiot ones, unlike the real ones who won't go near this unlikely technology, just breeds people who will dance the way government wants to attach themselves to the government tit until it runs dry.

    • by hxnwix (652290) on Saturday April 06, 2013 @11:30AM (#43378797) Journal

      Trying to be like venture capitalists, but idiot ones, unlike the real ones who won't go near this unlikely technology

      It's not so unlikely: "The company [Tesla Motors] announced in early August 2009 that it had achieved overall corporate profitability for the month of July 2009.[51] The company said it earned approximately US$1 million on revenue of US$20 million. Profitability arose primarily from improved gross margin on the 2010 Roadster, the second iteration of Teslaâ(TM)s award-winning sports car. Tesla, which like all automakers records revenue when products are delivered, shipped a record 109 vehicles in July and reported a surge in new Roadster purchases."

      Wikipedia lists their 2012 revenue as -251m, presumably because Tesla Motors is making heavy capital investment in production. They've been profitable before, and their investors apparently think they will be again.

      It's worth noting that the already established and highly profitable oil companies take billions of incentives from your government every year. Evidently, they just love giving money to industrialists of every stripe. And banks, of course.

      Advancing new basic technology with great strategic potential for reducing US dependency and therefore entanglement in the middle east is an excellent idea. Perhaps Fiskers was a poor choice - but doing nothing until after oil hits $500 a barrel would be far worse.

      • by AlphaWolf_HK (692722) on Saturday April 06, 2013 @12:25PM (#43379163)

        Wasn't Tesla one of about 6 or so companies that were part of this stimulus, and all of the rest of them went kaput? That's not very smart investing at all.

        Notice something here though - Tesla actually has the backing of known venture capitalists already, including its founder. You can't justify the government being a good venture capitalist when almost everything it touches falls apart.

        And ffs, I don't know why people always throw around that the government already subsidizes oil, banks, and . I don't think any libertarian or conservative (the ones who would be opposed to all of the above) approve of that either, so stop throwing that around as if it justifies other bad investments that the government makes.

        • by haruchai (17472) on Saturday April 06, 2013 @02:36PM (#43379975)

          The loan was part of a $25 billion DOE program towards greater fuel efficiency of which $8 billion was dispensed before any was allocated to Fisker.
          Other recipients were Toyota, Ford, Nissan and Tesla, who collectively nabbed most of that $8 billion.

          The loan guarantee was supposed to be towards a planned $40k hybrid, not the luxury Karma. Although the guarantee was for up to $529 million, the loan was frozen back in late 2011, at which point Fisker had borrowed $193 million.

      • by khallow (566160) on Saturday April 06, 2013 @12:56PM (#43379415)

        he company said it earned approximately US$1 million on revenue of US$20 million.

        Who here thinks they would have made anything resembling a profit without the substantial help from government? First, they secured a $465 million loan from the Department of Energy. Second, they picked up $10 million from the California Energy Commission for machinery purchases. Finally, purchasers of the vehicle get $7,500 in tax credits from the Federal government.

        That's not the sign of a company that would have gone somewhere without ample and continued government subsidies.

        It's worth noting that the already established and highly profitable oil companies take billions of incentives from your government every year. Evidently, they just love giving money to industrialists of every stripe. And banks, of course.

        Everyone gets access to most of those subsidies. There are very few oil subsidies. While all of the Tesla subsidies I just mentioned are unique to "green" technologies.

        Advancing new basic technology with great strategic potential for reducing US dependency and therefore entanglement in the middle east is an excellent idea.

        Why do you think that? Entanglement with the Middle East just isn't that big a deal, nor does it magically go away just because you're dumping a lot of money into deadend, excuse me, "basic" technologies.

        but doing nothing until after oil hits $500 a barrel would be far worse.

        The thing you don't get is that no, waiting till oil hits a ridiculous price is not "far worse". First, there's the concept of "time value". Something now is more valuable than something in fifty years. Similarly, a cost now is more costly than a cost down the road.

        By holding off on currently uneconomic transitions, we get more money from oil production and the infrastructure. That's money now.

        We also put off the cost of transitioning, which I might add is not going to get more expensive merely because we delay. We can't get any more dependent on oil than we've been for the last fifty years. Nor as we now see do we make the transition any easier or cheaper just by throwing money at it. End result of the current generation of green technology initiatives has been that we squander wealth and revert to the old way of doing things once the subsidies go away.

      • Re: (Score:3, Insightful)

        by JonBoy47 (2813759)
        It's also worth noting that Tesla has publicly committed to paying off its ATVM loans 5 years ahead of time. Of course, the DOE is making them pay off the loans early, but that's another matter... http://www.teslamotors.com/no_NO/blog/early-repayment-tesla%E2%80%99s-atvm-loan [teslamotors.com] http://www.teslamotors.com/blog/update-elon-musk [teslamotors.com]
      • by stenvar (2789879)

        "The company [Tesla Motors] announced in early August 2009 that it had achieved overall corporate profitability for the month of July 2009

        Tesla is making a subsidized and fashionable luxury product for Silicon Valley types. They aren't going to make a dent in mass market transport or US dependence on foreign oil.

        but doing nothing until after oil hits $500 a barrel would be far worse.

        If people anticipate that oil goes up that high, they'll invest in companies that address the issue in an effective way. No s

        • by Sarius64 (880298)
          Really so much bullshit. If fusion reactors could be built for $100 a plant the collective government energy collective would still outlaw them and get Jane Fonda to cry like a little bitch about creating black holes on Earth. Seriously, it's all rigged bullshit.
      • by clarkkent09 (1104833) on Saturday April 06, 2013 @05:21PM (#43380833)

        established and highly profitable oil companies take billions of incentives from your government every year
         
        I would like to see some evidence of this often repeated claim. Yes there are some relatively small subsidies for drilling but while those make a difference for small companies, they are a drop in the ocean for the big ones. Btw, while oil companies tend to be very profitable, it's worth keeping in mind that, on average, an oil company makes 7c profit on a gallon of gas at the pump, while the government makes about 40c in taxes.

  • by Anonymous Coward on Saturday April 06, 2013 @10:34AM (#43378383)

    A loan guarantee is not the same as a loan. Fisker was "saddled" with over half a billion in loan guarantees but not with actual loans. You know, dollars? The government froze their credit line under 200 million. Saying Fisker is "saddled" with every dollar from a loan guarantee is like saying I'm "saddled" with every dollar of my $30,000 credit card credit line even though I owe $0. Does that make sense at all to anyone?

    And this company failed due to the current trend in American economics. Mr. Fisker wanted to invest and build to create a product to sell. The board wanted to do nothing in an effort to save cash. So Fisker left and the board said, "great! now fire everyone, don't produce anything, and will save loads of cash! Surely success will come!" For the exact opposite line of thinking, see Elon Musk who innovated, invested, and built a product that people would want. But the captains of industry, who we are told deserve the most reward because they take the most risk, don't take shit for risks. They want to sit back and squeeze dollars out of what they have instead of actually producing more. So we have Hostess, that didn't want to compete but just rely on brand-name recognition, and the RIAA/MPAA that wants to copyright everything to infinity so no one has to produce anything of value ever again. Thanks, guys!

    • by guidryp (702488) on Saturday April 06, 2013 @11:19AM (#43378715)

      And this company failed due to the current trend in American economics. Mr. Fisker wanted to invest and build to create a product to sell.

      This company failed becuase it had a poorly engineered product, with outsourced drivetrain, and outsourced production. That product was one of the most unreliable cars produced in the 21st century so far in an era when cars are getting more reliable.

      Mr. Fisker most likely departed because he wanted out of a sinking ship. There was no investing to save this turkey.

      • by grqb (410789)

        I agree. The impression that I have from Fisker is that their product was not well engineered compared to competitors like Tesla. The Fisker Karma looked nice but they did have quality problems. Using lithium-ion batteries from A123 was one of their mistakes (even before bankruptacy, A123 had problems).

    • Having their battery supplier fold didn't help matters either.
    • by fche (36607) on Saturday April 06, 2013 @11:30AM (#43378803)

      "Fisker was "saddled" with over half a billion in loan guarantees "

      "saddled" is an interesting choice of words for another reason: it's as if though getting those loan guarantees were a bad thing for Fisker. It would be more accurate to say that taxpayers were saddled with it.

      • This. "Saddled" makes it sound like they did nothing to acquire the debt. It implies they didn't need the money in the first place, and the debt was forced upon them - as if they'd co-signed a huge loan for some other, ne'er-do-well company that spent it all on hookers and booze.

    • by Anonymous Coward

      Look, someone lent Fisker money. It may not have been the US governement but so what. At the end of the day, Fisker took 200 million up in smoke, the lender got paid back by the US government, and the US government spent $200 million that it got from the taxpayers. Yeah, a loan guarantee is not the same as giving Fisker the money directly, but at the end it amounts to the US government (and taxpayers) being out $200 million while Fisker pissed the money away.

    • by khallow (566160)

      A loan guarantee is not the same as a loan.

      [...]

      The government froze their credit line under 200 million.

      So the loan was a bit under $200 million most which didn't get paid back. That's still a lot of money that the US government is now on the hook for. And incidentally, why did the US government bother to freeze the money? Because they are now under scrutiny for these programs.

      And this company failed due to the current trend in American economics. Mr. Fisker wanted to invest and build to create a product to sell. The board wanted to do nothing in an effort to save cash. So Fisker left and the board said, "great! now fire everyone, don't produce anything, and will save loads of cash! Surely success will come!"

      Well, the board probably was correct here. The company probably is more successful than if it had "invested" the money down that particular rathole.

      While it is true that taking risks can have great benefits, it's worth noting th

  • by khallow (566160) on Saturday April 06, 2013 @10:40AM (#43378431)
    Another company borrowed huge sums of money from the Department of Energy only to declare bankruptcy a few years later. Sure, it's not a big piece of the pie as far as the US budget goes. But the US government isn't making a few bad decisions. But many thousands of them.
    • Re: (Score:3, Interesting)

      by AmiMoJo (196126) *

      That's what it is supposed to do. Private investors don't want to take risks on new technology or research that may or nay not make money one day. Universities, partly government funded, do the research. The government then invests in companies that develop it into new products, and a lot of them fail. In this case though clearly the technology itself was worth investing in, as Tesla has demonstrated.

      In the UK we invented graphene at a government funded university but failed to capitalize on it. Now most of

      • by khallow (566160)

        That's what it is supposed to do.

        I had to laugh at this. Sure, someone needs to make all those bad decisions to cover for the slackers in private industry.

    • Re: (Score:3, Informative)

      by Anonymous Coward

      Most of the projects the DOE funded are doing quite well, and they've exhausted less than 10% of the money set aside for losses in the program. But don't let facts stop you.

  • Which is a sexy car but kinda sad as it's not one I consider ecological or sustainable for the world at large. Idk Fisker, but I was a fan of Aptera which also failed for various reasons but seemed to me more of a sustainable car nearly every family could afford.

    Instead, we're going for car that's electric not because of the environment, but because it's wicked fast and great 0-60 times and looks cool. Nevermind the strip mining needed for all those battery packs and such or that it's a traditional car an

  • by PolygamousRanchKid (1290638) on Saturday April 06, 2013 @10:45AM (#43378459)

    Well, if they are laying off 75% of their workers, I guess they don't consider them part of the "core assets."

    Whatever happened to companies that loudly proclaimed, "The most important assets we have . . . are our employees!" . . . ?

    . . . and actually meant what they said . . .

    • by Mitreya (579078)

      Well, if they are laying off 75% of their workers, I guess they don't consider them part of the "core assets."

      Indeed -- my first question is: "Who's getting a huge bonus for successful maximizing of 'core assets'?"

    • by Nidi62 (1525137)

      Well, if they are laying off 75% of their workers, I guess they don't consider them part of the "core assets."

      Their "core assets" are probably things they can sell off to get money. You cant sell off employees.

      Yet.

    • Automation and population growth. The value of labor is being driven down by simple supply and demand.

    • Sir/Madam, if I had mod points, you'd get 'em all

    • by nebosuke (1012041)

      Whatever happened to companies that loudly proclaimed, "The most important assets we have . . . are our employees!" . . . ? . . . and actually meant what they said . . .

      They mean what they say, but the mistake you're making is the implicit assumption that all employees are equally valuable* (to the company in terms of economic value, not as human beings in general).

      For technology companies in particular, the key employees with true, industry-leading expertise in their field comprise the crown jewels of the company's "assets". In these cases, while it is true to say "The most important assets we have are our employees", the truth is that those 5% of employees who are criti

  • by Lehk228 (705449)
    article is not about the scissors company Fiskars
  • Saddled? (Score:5, Insightful)

    by guttentag (313541) on Saturday April 06, 2013 @10:58AM (#43378571) Journal
    From the summary:

    After being saddled with a half-billion dollars in loans from the U.S. Department of Energy...

    From the OED:

    saddle
    v.

    1. Put a saddle on a horse
    2. (Saddle someone with) give someone an unpleasant responsibility or task.

    1. If you somehow meant this car company was reducing fossil fuel consumption by strapping saddles to horses and calling them cars, they should have been out of business a long time ago.
    2. If you somehow meant that the DOE forced a half billion dollar loan guarantee on them, and they were unhappy about this... I think you misunderstand the function of the DOE, and possibly the function of a loan guarantee.... And possible the function of a half billion dollars. Are you, perchance, a Fisker executive? They seem to have this same difficulty in understanding the functions of these things.

    DOE should take control of the company, oust its top executives and either turn it around or sell off its useful assets to other companies who will use them to achieve the goals of the loan and recoup the taxpayers' costs. Otherwise Fisker will probably sell its assets off for less than they are worth and the executives will get kickbacks or positions at those companies in exchange for doing so.

    • by mveloso (325617)

      Maybe the DOE should ask for personal guarantees from the officers. Most banks do this for small business loans, and the SBA loans are substantially less than $500m USD.

    • by khallow (566160)

      DOE should take control of the company, oust its top executives and either turn it around or sell off its useful assets to other companies who will use them to achieve the goals of the loan and recoup the taxpayers' costs. Otherwise Fisker will probably sell its assets off for less than they are worth and the executives will get kickbacks or positions at those companies in exchange for doing so.

      But of course. Bankruptcy court provides standard ways to do this. I believe firesales have been contested before in bankruptcy court for this sort of reason though I'd probably have to google a bit to find an example.

  • As expected. (Score:4, Interesting)

    by roman_mir (125474) on Saturday April 06, 2013 @11:11AM (#43378657) Homepage Journal

    This was to be expected.

    There are people on /. who wouldn't understand such a thing for example. [slashdot.org] There are people here who do not understand that a company must turn up profit and if it doesn't it has no reason to exist, it's employing land, capital and labour inefficiently.

    There are also people here [slashdot.org] who think that having government dictate how an economy should run is the preferred way, not allowing the private ownership and operation of property (capitalism) and free market (equality before the law, rule of law that does not discriminate against people and thus create inequality of treatment and inefficiencies of economy) to do what it does best - savings, investment, production.

    There are is the answer and that "borrowing" from yourself to "pay" your debts is actually a [slashdot.org]meaningful act [slashdot.org].

    So this is yet another failed example of government "investing". You can't invest somebody else's money if they are forced to give it to you under the threat of violence, so that money is not coming out of your pocket, you are forcing it out of other people's pockets to run your own technocrat goals, and mostly really those are corrupt goals.

    Note that this was one of the ways that Al Gore's profited [slashdot.org] from his gov't ties.

    • Re: (Score:3, Insightful)

      by DogDude (805747)
      Oh, puh-lease. Gnashing of teeth over a few hundred million dollars? Really? And our oil-grubbing decade long wars in the Middle East cost how many trillions? *Yawn*
  • The biggest difference between a loan guarantee or a grant, and a tax break is that the former two have a lot more accountability. There are tax breaks that are a lot bigger that have gone to various companies -- and have the same (negative) effect on the deficit. The difference is that the tax breaks are announced, but what they cost the country (in terms of a decrease in income) never really gets accounted for -- other than estimates that may, or may not, be accurate..
  • by AaronW (33736) on Saturday April 06, 2013 @02:06PM (#43379829) Homepage

    I am quite familiar with the whole Fisker saga since one of my relatives bought a Karma last year. I tried to talk him out of it. When I test drove the car the software was extremely buggy, not even alpha quality IMO. The entire drive the car kept going "bong bong bong" because it was stuck in some self parking mode that the dealership couldn't get it out of. The car was sexy looking IMO, but it had a lot of serious issues going for it too.

    The car is big yet the interior is quite cramped with the huge battery occupying the entire center of the car. Acceleration was nice, up to around 30-40MPh. The software on the center touch screen looked cool, when you could see it, but was quite buggy and not easy to use, especially while driving. For such an eco-friendly car it also only got 20MPG on gasoline and got a combined EPA rating of only 50MPG. The car is quite heavy, over 5300LBS.

    Fisker's problem is that they outsourced their engineering. The drive train was done by Quantum Technologies and the battery by A123 systems, both heavy investors in Fisker. Fisker promised to sell 15-20K Karmas which A123 bet the farm on.

    Then there were the fires, for one of which the cause was never explained. While the battery wasn't the cause the perception was there. Next was the Consumer Reports debacle. The car completely died early in their testing and it was determined that the battery was defective. This resulted in a battery recall which was the final nail in A123's coffin leading to their bankruptcy. A123 was already in big trouble since Fisker sold far fewer cars than they had promised. In fact, even though Fisker hasn't made a single new car since July of last year you can still find plenty of unsold Karmas at most of the dealerships.

    My relative loves his Karma, but the car has been in the shop way too many times in the last year, sometimes being towed in and some of the issues have been rather serious. Other issues are just unexplained.

    Fisker was all about image and styling using outsourced technology. When some Chinese investors looked into the company they realized that they didn't have all that much in terms of technology, and in fact their technology was rather mediocre in many ways and needed some serious refining. There were issues between the engine and generator, plus they used two synchronous motors in order to get enough power to move the car and to help overcome torque ripple issues (from what I gather from their patents).

    For a first car from a new car company the car was overly ambitious and was far more complicated than I think they realized. Because it was so late the car was rushed to market with a lot of serious issues and inadequate testing. The car underperformed in almost every way. The federal government cut off their loan before they could draw it down all the way.

    Their next car, the Atlantic, was to be built in a shuttered Delaware factory but that car also suffered from a cramped interior.

    Fisker also burned through a lot of cash without a lot to show for it. They never did anything with the factory they purchased other than stick it to Delaware.

    A lot of people compare Fisker to Tesla which is an apt comparison. I am even more familiar with Tesla, having bought a model S myself. Unlike Fisker, Tesla developed their own technology for their Roadster. They developed the battery and drive train and perfected it, once they moved away from the problematic 2-speed transmission.

    Tesla's battery solution was to use inexpensive off-the-shelf batteries and to perfect their battery management technology. Unlike Fisker, who uses an expensive custom battery pack Tesla's battery packs are stuffed with over 7000 18650 cells. The 18650 lithium cell is about as standard as it gets. Their drive train is much more compact than Fisker as well. They use a single induction motor that provides about as much power as the pair of motors Fisker uses but without requiring expensive rare-earth metals. Tesla's motor has no magnets in it.

    While the Fisker Karma and

  • by HangingChad (677530) on Saturday April 06, 2013 @02:48PM (#43380053) Homepage

    In late March, Fisker put its entire U.S. workforce on furlough...Fisker asked 53 senior managers and executives to stay on board,

    Layoff all the workers, keep the execs. That's what happens when the problem is dictating the solution.

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