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Fisker Lays Off Most Workers, Plans To Shop Around Remaining Assets
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."
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.
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
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!
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.
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 . . .
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
This is on the front page because Fisker is linked to Democrats, and the failure of this company makes them look bad.
And when Fisker first started talking about their cars and got all sorts of drooling interest here ... that's because it was Eeevil Republicans playing long ball and setting up slashdot users for a clever smackdown later when Fisker inevitably failed? Wow those guys are sinister geniuses!
Here's why Fisker is associated with Democrats: because a Democrat decided to hand them half a billion dollars borrowed from other places like China in a vain attempt to pander to the Greener Than Thou voting block. Yes, it was pure politics. You can't make Obama's political decision to give them other people's money (and the interest we'll be paying on that money for decades) go away.
But that has nothing to do with the fact that a theoretically promising and sexy-looking tech product company has badly fumbled something that an endless parade of people keep saying is the Super Sexy Green Future of driving around.
One of my customers invested a pile of money into becoming a Fisker dealer. They have been completely, royally screwed by the engineering, sales, and financial incompetence of that company - as well as bad luck over things like cars getting flooded in storage in storms, and more. Why is this "on the front page?" Because it's a classic tale of a tech venture gone sideways. And you doth protest way too much about the politics. Basically, you're using the opportunity to start a thread that bashes people you don't like. The hypocrisy is delicious.
Don't disappoint your bird dog. Go to the range.
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.
This was to be expected.
There are people on /. who wouldn't understand such a thing for example. 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 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 meaningful act.
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 from his gov't ties.
You can't handle the truth.
Yeah USA's been down this road before. Didn't work then. Won't work now. For a while everyone was "by 2000 there will be no oil anywhere" and 20 years later (90's) people were driving land garbage scows and there was so much oil prices plummeted. Eco went away.
The current wave of Ecothink is similar to the last. Solar still won't work, not with photovoltaics in their current state. Corn is a joke. It's for eatin' and makin' hooch, not becoming fuel. It's upside-down, you spend more energy making than what you get out of it. Adding it to gasoline makes the cars unhappy and doesn't do a damn thing to improve MPG. Wishful thinking can't beat physics. People still fall for Eco and embrace it with religious fervor.
As for electric cars I'm all for it, just please no rows and rows and rows of ballast.. I mean batteries.. weighing down my car and needlessly using dangerous, expensive, hard-to-get materials.
The "Civilized World" jumped the shark ca. 1973.
Let's be real though - the government didn't just invest in Fisker. They also invested in Tesla, which is going strong, along with Ford and Nissan. Nissan delivered with the Leaf, while Ford's return on that investment is much less direct but involves a few different combustion engine technologies/improvements and manufacturing line improvements.
The truth is that this is the way investment works - some companies are successful, others are not. Whether the government should be investing at these different levels is what's really up for debate. It's hard to deny that the Advanced Technology Vehicles Manufacturing Loan Program has generally been a success, whether you believe that the government should have been the ones to invest or not. This program was a $25 billion program, and they lost $200 million of it on a bad investment. Considering the risk profile was expected to be 30%, it would take Ford or Nissan to fail on their obligations under the loan in order for it to surpass that threshold.
You also need to understand that Fisker didn't get all of the money they were guaranteed. A loan guarantee means they'll definitely loan up to a limit, not that Fisker immediately received that amount. The real number they got is about $200 million, not $500 million. Losing $200 million on a total of $25 billion invested in relatively unproven (in the market) technologies isn't all that bad.
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
This post is encrypted twice with ROT-13. Documenting or attempting to crack this encryption is illegal.
By that logic, we should never invest in R&D or anything remotely risky as long as there are needy people.
Why bother with cancer or diabetes research when we have so many who don't have medical coverage?
All those hundreds of billions should have been spent on more prescriptions and checkups, right?
Pain is merely failure leaving the body
Qualified professional investors are limited in their ability to tackle big problems because they don't have enough money, they don't have enough time, or there is no way to hoard the results of a particular investment. Governments have lots of money, lots of time, and they don't care as much about hoarding the resulting benefit because their entire goal is to benefit society. Private investment gets trapped into local minimums and incrementalism.
I'll give you a few examples:
1. The railroad system (Pacific Railroad Act)
2. Morrill land-grant act for universities (Purdue, MIT, Cornell, etc.)
3. GI Bill of rights
4. Interstate highway system
5. The internet
6. NASA
etc., etc.
There are more examples here: http://www.huffingtonpost.com/william-lazonick/nine-government-investmen_b_954185.html
Soon to be added to this list, 'Electric cars'.