A streak of bad luck for Fisker, part 2

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Tesla CEO Elon Musk once paid $18 million out of pocket to keep his autoworkers paid. Image: Oninnovation/Flickr.CC BY-ND

Fisker, the Delaware-based luxury EV startup, has had a string of bad luck of late, from federal loan setbacks to criticism from campaigning politicians. Fisker has made another round of layoffs, but the company is not rolling over without a fight.

Fisker in Delaware

When Fisker set up shop in Delaware in 2009, it was heralded as the great hope of the state’s automotive industry, following the exit of General Motors. Politicians rallied around the startup, touting it as an embodiment of the American dream: a local boy who makes good when the corporate fat cats cannot.

Plans to produce the Fisker Atlantic were set for later this year. Those plans were curtailed in February when the automaker failed to meet its milestone of launching the $100,000 Karma. Consequently, the DOE held back the remainder of its promised $529 million loan.

The state of Delaware is still paying the utility bills for the plant, via an $18 million loan, in hopes that Fisker will one day soon be up and running, bringing the state some badly needed income and creating hundreds of jobs.

A spokesman for Delaware Governor Jack Markell said:

“The initial agreement with Fisker, including the clawbacks if hiring goals aren’t met, remains in place. Fisker hiring hundreds and producing cars remains the preferred outcome for the Boxwood Road factory.”

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Parallels to Tesla

Green Car Reports, however, points out that the situation may not be hopeless. In making its point, the website drew parallels between Fisker and Tesla.

Tesla also suffered a financial drought following the launch of its Tesla Roadster, which is not an unusual for a startup automotive company producing an expensive luxury product. Tesla’s crisis got so bad that at one point CEO Elon Musk was forced to write a personal check for $18 million to cover the payroll.

But Tesla managed to secure financing from the European automaker Daimler AG. Although a European financier would kill the “by Americans, for Americans” romance, perhaps, Green Car Reports suggests, Fisker can seek a similar arrangement.

Loans under fire from Romney

Meanwhile, Fisker’s investor and former chairman Ray Lane says that Republican presidential nominee Mitt Romney’s campaign rhetoric concerning the DOE loans is hindering the company’s ability to secure those funds.

Recently, Romney compared the Fisker loan to one extended to Solyndra — a maker of solar panels that went under last year — calling it a “failed investment.” The collapse of Solyndra brought the DOE’s loan practices under scrutiny and under fire from conservative politicians.

In criticizing the DOE loan process, Romney hopes to further discredit the administration of President Obama, his rival for the White House in November.

Lane fires back

In an email to Mitt Romney’s camp, Lane said that the DOE loan setbacks would have been ironed out if Romney had not singled them out:

“The DOE would have negotiated a new draw time-frame by now if it weren’t for Romney targeting these loans. Irony is, Romney doesn’t understand he’s the problem and he’s lumping a company that did $100 million in quarter 1 with a company that’s bankrupt.“


Motor Authority
Green Car Reports 
Delaware Online

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