Fisker Loses Fisker: Can the Company Survive?
As you may know, Fisker sought to change the world by launching a having-it-all high-performance plug-in hybrid, a costly ($100,000-plus) environmentally friendly supercar. Alas, the dream turned to a nightmare when the car proved buggy. And a financial crisis loomed when Fisker, plagued by recalls and other problems, failed to meet the conditions of its $528 million federal loan. With loss of control looming, Fisker resigned as executive chairman Wednesday, citing “several major disagreements” with “executive management on the business strategy.”
Fisker’s departure is a shock but no surprise, said Jack Nerad, executive editor at Kelley Blue Book. “It has been common knowledge for the past 12 months that the company has suffered from quality problems, production burps and accusations of political cronyism,” he said. “Its ‘volume’ model [the smaller Atlantic, to have been built in a former GM plant in Delaware] seems stillborn, while the company has run through a laundry list of top executives. A revolving door in the executive suite is never a good sign for the future health of a company. Now we will see if Fisker can withstand the loss of its namesake.”
It didn’t start this way. The early years of the company, with a swoopy design announced and plans for an ultra-green drivetrain, must have been tons of fun for Fisker. The auto world was captivated by the story of the impeccably dressed Dane who—like John DeLorean—was going to take on the entrenched and complacent auto establishment.
There were signs that the Karma wouldn’t live up to the hype. I went to the LA HQ and was left cooling my heels in the waiting room. In 2010, I also broke the news that the car was really heavy, weighing more than 5,000 pounds. When, after several delays, the car finally hit the road, the reception was underwhelming. Performance was never stellar, and it never matched the 200-mph promise of the design. Ironically, as the VL Destino, with a transplanted V-8 from the Corvette ZR1, the Karma should be a real screamer. But a lot of people can build gas-guzzling supercars—this one (again, like DeLorean’s “ethical car”) was supposed to be different.
Consumer Reports failed the Karma on some basic, bread-and-butter issues, including a too-tight interior, poor visibility, a noisy engine and a small rear seat and trunk. But CR also had the car cease to function on its celebrated test track.
Fisker, the company, doesn’t have a lot of options right now, beyond selling the company or a controlling share to a Chinese buyer. Interested parties have included Geely Holding Group, Dongfeng Motor Group and Wanxiang Group, which already owns Fisker’s A123 battery supplier. Geely, which bought Volvo, is said to be the preferred buyer because it’s a private company with western experience.
The negotiations continue, though the loss of Fisker Automotive’s namesake founder may take a few zeros out of the purchase price. In a statement, remaining management said that Henrik Fisker’s departure “is not expected to impact the company’s pursuit of strategic partnerships and financing to support Fisker Automotive’s continued progress as a pioneer of low-emission hybrid electric powertrain technology.”
Sure, this isn’t the final chapter. The basic design of the Karma has some legs, even if the drivetrain may end up being shoehorned out. But at this point, the once neck-and-neck race with arch-rival Tesla is over.