Fisker Automotive Fails to Make Loan Payment
Fisker Automotive is in slightly hotter water this week after it reportedly failed to make a $10 million loan payment to the United States Department of Energy.
Fisker's relationship with the DoE has been rocky for some time. The hybrid luxury carmaker was originally slated to receive $529 million in loans from the federal government, which it hoped to leverage to build the Atlantic midsize sedan. But a series of events including a massive battery recall, multiple fires, slow sales, and quality problems led the company to financial turmoil. In response both to Fisker's situation and, perhaps, a well-publicized blunder with Solyndra (a solar panel manufacturer that went bankrupt despite massive DoE loans), the government slashed its financial stake from a $529 million loan to just $192 million.
Just under two years later, Fisker Automotive is now without its namesake (founder Henrik Fisker left his own company just last month), and without about three quarters of its workforce (after laying off roughly 75 percent last month). A loan payment of either $10 million or $20.2 million (there are conflicting reports) was due to the DoE yesterday morning, but not completed. It was also reported this morning by the Detroit News that the Energy Department has already started to recoup its investment: it seized $21 million from Fisker Automotive's strategic reserve accounts on April 11. The recovered funds reportedly don't count towards the outstanding loan payment.
Here's hoping that Fisker Automotive, and its CEO Tony Posawatz, will have some good news to report by tomorrow, because Posawatz is among a group of people (including Henrik Fisker and Fisker COO Bernhard Koehler) who are due to appear at a House of Representatives hearing tomorrow. Considering that the House Committee on Oversight and Government Reform named the panel "Green Energy Oversight: Examining the Department of Energy's Bad Bet on Fisker Automotive," the panel isn't about to be a calm, measured look into the embattled carmaker's balance sheet.
As for Fisker Automotive, the company is still headed towards either bankruptcy, an acquisition by another company, or both. Only time will tell.