Fisker delays production of next-gen family sedan
Fisker Automotive Inc. said it is delaying production of its next-generation family sedan and may not build the vehicle in Wilmington, Del., after suffering several setbacks with its first plug-in hybrid batteries.
CEO Tom LaSorda added that Fisker may move production outside the United States.
"We're proceeding on where the best costs will be," LaSorda told reporters after the unveiling the company's next-generation vehicle, the Fisker Atlantic. "We're looking at alternative options to the U.S., of course."
In 2010, Fisker won $529 million in low-cost Energy Department loans, and has drawn $193 million, mostly for use in developing the Fisker Karma that was designed and engineered in the United States, but assembled in Finland.
But the Energy Department froze the rest of the loan last year amid talks about the company's business plan.
The Energy Department heralded the loan in 2010 when it said it would create 2,000 factory jobs at a former General Motors assembly plant in Delaware that Fisker bought during GM's bankruptcy restructuring. Vice President Joe Biden even traveled to Wilmington after the department announced the loan for Fisker to tout the project in his home state.
The Project Nina vehicle, now renamed the Fisker Atlantic, was to start production this summer in Wilmington. Now, LaSorda said, he won't decide where to build the vehicle until the end of summer, and said it might not come out late this year or next.
Wilmington "is still our primary choice, but we're looking at other options," he said. California-based Fisker could opt to keep Wilmington and build a future model there if it doesn't build the Atlantic there.
Fisker already is working on another platform for a smaller vehicle. It plans at least three versions of the Fisker Atlantic.
LaSorda said Fisker is getting a lot of interest in building the Atlantic elsewhere.
"One thing we need is investment. There's a lot of interested parties outside the U.S. willing to invest in the company," LaSorda said.
LaSorda came out of retirement in January to become CEO and has personally invested a "lot of money" in Fisker, he said.
Cancelling the Wilmington project would be another blow to the Energy Department's struggling $25 billion auto bailout program, which hasn't made a new loan in more than a year.
Many companies say politics are to blame for the lack of loans.
Fisker laid off 26 workers in Delaware and 40 workers in California in February.
LaSorda is still in talks with the government but isn't counting on any federal money.
"We're going to run this company as if we're on our own," LaSorda said. "I'm talking to them every so often, of course. I'm not going to give up. If they want to give low-interest loans, I mean why not ask for them?"
Fisker has raised $1 billion in the private equity markets to fund the 4-year-old company and is raising more.
LaSorda said the former GM plant has been "gutted and is ready to go" but has no tooling in place.
Fisker could quickly start production in Delaware.
LaSorda, a former Chrysler CEO, said he lowered volume projections for the $107,000 Karma sports car from 10,000 worldwide in 2012 to more than 4,000.
So far, Fisker has sold about 700 worldwide, including 250 in March. The company suffered a setback when Consumer Reports recently bought a Fisker and it died soon after.
Fisker's battery supplier, A123, said it will replace about 600 batteries after it said it found manufacturing flaws.
LaSorda said he's not sure if Fisker will use A123 as the supplier on the Fisker Atlantic.
Fisker also issued a recall for the first 240 Fisker Karma vehicles in December to address coolant leaks that could have led to a battery fire.
In 2009,Fisker considered locating production in GM’s now-shuttered Pontiac East Assembly plant before settling on Wilmington.
They also considered the ex-GM plant in Moraine, Ohio, and the New United Motor Manufacturing facility operated jointly by GM and Toyota Motor Corp. in California. Tesla Motors Inc. ended up acquiring the former GM-Toyota plant in California.