The Rise and Fall of Fisker Automotive.
After having a share in making and designing luxury sports cars in Aston Martin, Henry Fisker and Bernhard Koehler left in 2005 with aspects of having their own automotive company. Later in 2007, the two co-founded the Fisker automotive company with investments from Gianofranco Pizzuto and Palo Alto. Due to the emerging issues of car pollution to the environment most of the big names in car manufacturing had announced they would compete to make a premium green car. Fisker automotive wasn’t left behind.
Fisker Karma, the very first product of Fisker Automotive was one of the world’s first plug-in hybrid electric vehicles, was unveiled in 2008. Fisker had planned to start selling the Karma by the end of 2009 but the delays by the Environmental protection agency to certify the cars emission and drive range made them wait till after October 2011. The car was to be a high-volume vehicle with a low price in order to compete with the Tesla model.
The Fisker automotive received a 529-million-dollar conditional loan in 2009 from the Department of Energy even though 196 million dollars was what they had requested. They later bought a general motors plant in Delaware with plans to manufacture a cheaper model in the U.S. The loan received major scrutiny for being awarded to the luxury vehicle manufacturer that was too expensive for general public. After failing its initial launch date, the Karma hit the market with numerous production flaws. They failed to produce the self-imposed goal of shipping 7000 cars and in turn produced only 1500. Also, it had prospects that the Karma edition would get 67.2 MP-Ge/50 miles of the electric range but the environmental protection company rated the Karma with 52MPGe and 32 miles of electric range.
The Fisker Karma failed to reach the set expectations and the government froze its credit line, after this backlash the problems just continued to pile up. Another red alert was in December 2011, when some 239 cars were recalled since they had a risk of battery fire caused by a coolant leak. There was a change in the administration in 2012, when Tom LaSorda was named CEO only to be replaced six months later by Tony Posawatz as a step to revive the struggling company. The production was shut down in July 2012 until enough funds could be raised. In October the same year, the company suffered another setback when Hurricane Sandy flooded and destroyed its entire European shipment of 338 Karmas at port Newark, New Jersey.
The fail of Fisker Automotive brought with it down the A123 Systems LLC since they couldn’t pay for the supply of batteries from the company leading to its bankruptcy filing. In march 2013 Henry Fisker resigned and the following month saw the company lay off 75% of its workforce without notice which landed the company a federal lawsuit for not giving an advance notice of dismissal. The company finally filed for bankruptcy in November 22, 2013 which thereafter led to the auctioning of the company. Wanxiang got the court approval on February 18, 2014 and bought the assets with a bid of 149.2 million dollars.