The Obama Administration had high hopes of helping to promote new automobile technology through government loans through the Department Of Energy to break the U.S. dependence on foreign oil, instead this administration seems to have new problems on their hands with problems at Fisker. After receiving $529 million in government loans, the plug-in hybrid manufacturer, Fisker seems to be in very serious trouble. The company just announced the layoff of 160 employees, only leaving a core group of just 40 employees to continue to operate the struggling company as it looks to possibly sell the company to a Chinese company that is looking for a foothold into the U.S. market for Chinese built automobiles.
Fisker automobiles are very attractive sports car styled cars. They look good enough. But after the company started to become troubled by poor sales and the company’s founder, Henrik Fisker left after a dispute with other executives at the company, the car company appears to be headed for the scrap heap unless it can pull something together very quick.
One Irvine,CA based car dealer even discounted a brand new Fisker down to just $80,000 a few days ago in a sign of desperation to sell one of the cars that should normally retail for as much as $120,000. With the $7,500 tax credit available from the government as added incentive, this car shopper might have gotten a good bargain here if they can find parts and service in the future as the struggling carmaker ponders bankruptcy or selling to a Chinese investor.
Henrik Fisker has had a brilliant career as an automobile designer, including his designs for the Aston Martin DB9 and other world class supercars. But, the Fisker company has had a series of serious setbacks in recent years that forced the company to stop production of new cars back in Summer 2012 after their battery supplier, A123, went bankrupt, and the company was also forced to make some expensive recall repairs to customer cars. Further, Hurricane Sandy destroyed 300 Fisker automobiles, a good percentage of the company’s estimated 1,800 to 2,000 annual production and sales output.
Leonardo DiCaprio is one of the investors in the company, but Henrik Fisker left the company in anger only a few days ago after the other executives are in talks with Geely of China to possibly buy the company. Geely has also angered many other auto producers including Rolls Royce for producing a car they claim is nothing more than a cheap Chinese knock-off off their car, and has very similar styling and even had a hood ornament very similar to the Rolls Royce “flying lady”.
Dr. Steven Chu, a Noble Prize winner, was appointed to head the Department Of Energy for the Obama Administration. And Fisker was given government loans based on the claims that they would produce 100,000 cars a year at some point, but this just hasn’t happened between the very high price of the cars, the lack of many dealerships, the problems with the bankruptcy of their battery supplier, the recalls, Hurricane Sandy and other problems. The government refused to offer further loans to the company, but the state of Delaware offered the company over $20 million in aid as well in exchange for Fisker building a new plant in that state. But, that hasn’t happened, and seems unlikely to at this point. This probably forces the company to sell it’s assets to Geely which might just build conventional Geely cars here in the U.S. for sale in the U.S. market, giving this Chinese auto giant their first toehold here.
Besides the plug-in hybrid technology, the Fisker Karma is a little bit unusual for being a four door sports car model. But, the company had production nearly 90% complete to produce other models including an SUV based model. Whether any of these other Fisker models are ever produced is anyone’s guess at this point as the company is in very serious financial trouble right now.
Government loans to companies like GM and Chrysler seem to have paid off because both produce conventional automobiles with established dealer networks. But, the loans to Fisker appear to have been made to an upstart company that made bold promises or predictions, but was just unable to fulfill the production and sales targets that they had hoped for.
Fisker looked to be a very high quality brand, but soon found it’s reputation damaged by an unfortunate series of sad events, making this one of the most unfortunate stories ever in the history of new U.S. automobile brands. So many new brands have emerged from Japan and South Korea since even the 1960’s, while American companies have only failed during that same period in time and the U.S. now has far fewer car brands than the 1960’s.