Fisker Automotive Lays Off Majority Of Employees Amid Financing Struggles

Fisker Automotive, Inc. laid off a majority of its employees – 160 in total – from its Anaheim, Calif., headquarters on Friday, as it struggles to reach a financing deal that would save the American automaker.

Citing individuals familiar with Fisker’s strategy, the Los Angeles Times reports that the maker of one of the world's first production plug-in hybrid electric vehicles dismissed all but a core group of about 40 workers needed to keep the business running as it continues talks with three Chinese businesses considering buying or investing in Fisker.

“They pulled back another layer as they try to work out a last-minute deal. They need to do a deal quickly, and they know it and are working on it,” Mike Sullivan, who has a Fisker store among his chain of LACarGuy dealerships in the Southern California, told the Los Angeles Times.

While Fisker stopped production of the Karma, its only model, last year after A123 Systems Inc., the maker of its lithium-ion battery, filed for bankruptcy, the carmaker has been working for months to raise $500 million so it could restart production of the $110,000 plug-in hybrid vehicle.

Fisker is reportedly in the process of ironing out deals with three different Chinese companies, including Geely Holding Group, which owns Volvo, and Wanxiang Group Corp., which recently bought A123 Systems out of bankruptcy, the LA Times reports.

The other bidder, according to an individual familiar with the negotiations, as cited by the newspaper, is a business owned by the Chinese government.

The company has reportedly been low on funds after the federal government froze an Energy Department loan, the first payment of which Fisker is supposed to make this month.

Sources familiar with the situation tell the LA Times that regaining access to the loan would make the car company more attractive to potential investors. Potential buyers would want to tap into the federal money to restart the business and launch work on a second model, the Atlantic, a $55,000, four-door rechargeable sports sedan. However, the government is reluctant to extend more credit without getting guarantees for U.S. employment, the Times reports.

Henrik Fisker, its co-founder and executive chairman, left the car company in early March because of disagreements with management. In a statement, the company said his departure was “not expected to impact the company’s pursuit of strategic partnerships and financing to support Fisker Automotive’s continued progress.”