Fisker Edges Closer to Bankruptcy as New Details Emerge
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.
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