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Fisker Automotive Fires 75 Percent Of U.S. Employees

Signals Major Financial Trouble.

Fisker Automotive has fired nearly 75 percent of its employees in southern California, signaling financial trouble for the manufacturer of the plug-in hybrid Karma. The news broke earlier this morning when it was revealed that Fisker had fired its internal public relations department and turned publicity over to Los Angeles-based Sitrick And Company.

An emailed statement says that although Fisker is still attempting to find a manufacturing partner, "Unfortunately we have reached a point where a significant reduction in our workforce has become necessary… Today, Fisker met with a group of employees in our Southern California office to inform them that this is their last day with the company… We expect that at the end of the day we will have retained approximately 25 percent of our workforce."

The statement continues: "The Company regrets having to terminate any of its hardworking and talented people. But this was a necessary strategic step in our efforts to maximize the value of Fisker's core assets."

This move could signal that Fisker Automotive is headed to bankruptcy. The company has faced a long line of setbacks, starting with a massive recall when defective Karma battery packs were linked to fires. (Defective cooling fans also caused fires in some cars.) More cars were destroyed at a dock when Superstorm Sandy hit a New Jersey port last year. As of October 2012, Fisker reported that it had only delivered 1500 units of the Karma worldwide.

Without sales of the plug-in hybrid Karma, Fisker has no source of income aside from government loans and private investments. Fisker Automotive was approved for a $528.7 million loan from the U.S. Department of Energy in 2009, and has used at least $193 million. We named the Fisker Karma our 2012 Design of the Year, owing to its beautiful styling penned in part by former CEO Henrik Fisker.

Last year, Fisker also revealed that its volume model, the planned $55,000 Atlantic sedan, would be delayed until 2014. More recently, founder and designer Henrik Fisker unexpectedly left his namesake company in March over, "'major disagreements' with management on business strategy." And at the end of last month, Fisker workers were reportedly furloughed for a week -- although at the time, Fisker spun it "a common practice" that "isn't expected to materially impair Fisker's operations."

Source: Fisker Automotive