Fisker Taps New CEO, Ponders Private Funds for Stalled Plant
Fisker Automotive Inc., the maker of plug-in luxury sports cars, named an industry veteran its new chief executive officer and said it may turn to private investors to restart a stalled Delaware plant project.
Tom LaSorda, Fisker’s vice chairman and a past president of the predecessor of Chrysler Group LLC, is taking command of Anaheim, California-based Fisker Automotive effective immediately, Henrik Fisker, who has led the closely held company since its founding, said today in a conference call. Henrik Fisker, 48, shifted to executive chairman.
The carmaker on Feb. 6 said it stopped working on its Wilmington, Delaware, auto plant after the U.S. Energy Department blocked access to a federal loan, citing unmet milestones. The Energy Department awarded Fisker $529 million in loans in April 2010 from a program intended to spur development of advanced-technology vehicles.
“We are having other funding options than the DOE,” Henrik Fisker said. “We are right now assessing our different funding options.”
The California company’s Karma plug-in electric sports car that starts at $102,000 is now “fully” on sale in the U.S. and Europe, said Henrik Fisker, who designed it. That vehicle is produced by a contract manufacturer in Finland, and U.S. loans Fisker received can’t be used for its production costs.
“LaSorda is a manufacturing guy; this is something he knows up and down,” said Jim Hall, principal of 2953 Analytics Inc., an auto consulting firm in Birmingham, Michigan. “What Fisker is finding out is that the hardest car to do for any startup is the second model.”
Fisker planned to begin making its second model, the Nina sedan, at a Wilmington plant by 2013 before regulators halted access to the loan. Fisker said this month it has cut 26 jobs at the factory until the program restarts. The plant was formerly owned by General Motors Corp., which filed for bankruptcy in 2009 and emerged as General Motors Co. (GM)
The U.S. awarded Fisker $169 million for engineering of the Karma and $359 million for production of the Nina. Fisker said it has drawn down $193 million from the loans and raised $850 million in private capital. Henrik Fisker said in a December interview the company had hired about 100 people in Wilmington.
The Energy Department’s loan programs are under congressional scrutiny since the September 2011 bankruptcy of Solyndra LLC, a loan-guarantee recipient. Beacon Power Corp., an energy-storage company, and Ener1 Inc., a supplier of batteries for electric cars, both filed for bankruptcy protection after receiving Energy Department aid.
LaSorda’s promotion “will enhance the company’s credibility, but that will only get you so far,” Jeremy Anwyl, vice chairman of Edmunds.com, an automotive data and pricing company in Santa Monica, California, said by e-mail.
“The odds are stacked against Fisker,” Anwyl said. “The car may be an interesting toy for people who have $100,000 to spend on such a thing, but Fisker will run out of those people quickly, and how tolerant of glitches will those people be?”
The new CEO said the odds were on Fisker Automotive’s side.
“I wouldn’t have taken the job if I didn’t feel the future was bright,” LaSorda, 57, said today. The former Chrysler executive said he has invested in Fisker Automotive as a sign of his confidence.
Prediction of Profitability
The Energy Department declined to comment on the changes at Fisker. The status of the company’s loan and repayment hasn’t changed, said Damien LaVera, a spokesman for the department.
Fisker is planning for the possibility it won’t be able to access the remaining U.S. loan funds and will be successful solely based on Karma sales, LaSorda said.
“Can we make this a sustainable business? The answer is yes,” he said. “In 2013 we’ll be profitable, just with the Karma by itself.”
Fisker Automotive has produced about 2,000 Karmas. Of that figure, 840 have been delivered to dealers in the U.S. and Canada, LaSorda said.
The Energy Department may permit Fisker Automotive to resume drawing loans funds as “they see us deliver the monthly numbers,” LaSorda said. “We have a new business plan and we’re getting strong support from our financial partners.”
The company’s investors include Kleiner Perkins Caufield & Byers, Palo Alto Investors LLC and the lithium-ion battery maker A123 Systems Inc. (AONE)
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