Tuesday, March 19, 2013

How America's Coolest Automaker Crashed So Hard, So Fast

Fisker Automotive was founded by Henrik Fisker and Bernhard Koehler in late 2007. Fisker (left) was known for designing amazing cars like the Aston Martin DB9 and BMW Z8; Koehler was a veteran auto executive..


Fisker Automotive was founded by Henrik Fisker and Bernhard Koehler in late 2007. Fisker (left) was known for designing amazing cars like the Aston Martin DB9 and BMW Z8; Koehler was a veteran auto executive.

In January 2008, the Karma concept was revealed at the North American International Auto Show in Detroit..


In January 2008, the Karma concept was revealed at the North American International Auto Show in Detroit.

It was as stunning and sleek as anything Henrik Fisker had done before..


It was as stunning and sleek as anything Henrik Fisker had done before.

A plug-in hybrid electric vehicle, the Karma would get the equivalent of 52 mpg, and had an all-electric mode range of 32 miles (it could go much farther using gasoline as well)..


A plug-in hybrid electric vehicle, the Karma would get the equivalent of 52 mpg, and had an all-electric mode range of 32 miles (it could go much farther using gasoline as well).

Because of its small interior, it was categorized as a subcompact car..


Because of its small interior, it was categorized as a subcompact car.

At its unveiling, Fisker said the Karma would cost $80,000. That rose steadily over the next few years, settling at between $102,000 and $116,000..


At its unveiling, Fisker said the Karma would cost $80,000. That rose steadily over the next few years, settling at between $102,000 and $116,000.

Forbes magazine praised Fisker's business model in a May 2009 cover article titled "The Next Detroit." It hailed the company as cost-efficient and "reminiscent of the entrepreneurs in the car industry's early days.".


Forbes magazine praised Fisker's business model in a May 2009 cover article titled

In September 2009, the US Department of Energy allocated a $528.7 million conditional loan for Fisker, under its Advanced Technology Vehicles Manufacturing program (created by a 2007 law)..


In September 2009, the US Department of Energy allocated a $528.7 million conditional loan for Fisker, under its Advanced Technology Vehicles Manufacturing program (created by a 2007 law).

It was the big investment Fisker needed to get production really going. Part of the money was for finishing the design of the Karma, to be assembled in Finland..


It was the big investment Fisker needed to get production really going. Part of the money was for finishing the design of the Karma, to be assembled in Finland.

But most was for repurposing a defunct GM plant in Wilmington, Delaware, to manufacture 100,000 cars per year. Here, Delaware Gov. Walter Bacon breaks ground on the original plant, in 1945..


But most was for repurposing a defunct GM plant in Wilmington, Delaware, to manufacture 100,000 cars per year. Here, Delaware Gov. Walter Bacon breaks ground on the original plant, in 1945.

Before long, Fisker showed off the finalized version of the Karma..


Before long, Fisker showed off the finalized version of the Karma.

It hit the track in Monterey, California, in October 2009..


It hit the track in Monterey, California, in October 2009.

The first Karma finally rolled off the line in July 2011. Leonardo DiCaprio, a big fan and equity investor, got the first one..


The first Karma finally rolled off the line in July 2011. Leonardo DiCaprio, a big fan and equity investor, got the first one.

Justin Bieber got one as a gift from his manager and Usher, on the 'Ellen' show. He was thrilled, and later painted it chrome..


Justin Bieber got one as a gift from his manager and Usher, on the 'Ellen' show. He was thrilled, and later painted it chrome.

The Karma hit dealerships in December, and received a lot of praise from critics..


The Karma hit dealerships in December, and received a lot of praise from critics.

Top Gear Magazine named it the Luxury Car of the Year, and Automobile Magazine called it the Design of the Year in January 2012..


Top Gear Magazine named it the Luxury Car of the Year, and Automobile Magazine called it the Design of the Year in January 2012.

But the Karma had missed expected delivery dates in December 2009 and September 2010, due to technical difficulties. Without the established infrastructure of a company like GM, Fisker was easily delayed by unforeseen problems with the car's design..


But the Karma had missed expected delivery dates in December 2009 and September 2010, due to technical difficulties. Without the established infrastructure of a company like GM, Fisker was easily delayed by unforeseen problems with the car's design.

Those failures had an effect: The Department of Energy froze Fisker's access to its loan in May 2011..


Those failures had an effect: The Department of Energy froze Fisker's access to its loan in May 2011.

The company had already spent $193 million, a bit more than the portion set aside for the Karma..


The company had already spent $193 million, a bit more than the portion set aside for the Karma.

But it needed the rest of the money for the Delaware plant, where it planned to build its next model: the Atlantic..


But it needed the rest of the money for the Delaware plant, where it planned to build its next model: the Atlantic.

The mid-size sedan, unveiled in April 2012, was supposed to be the "volume car that begins to build growth," CEO Tony Posawatz said..


The mid-size sedan, unveiled in April 2012, was supposed to be the

Fisker held on, and a year later had raised more than $1 billion in private cash..


Fisker held on, and a year later had raised more than $1 billion in private cash.

But the Karma was running into trouble. A voluntary recall followed two "mysterious fires" in August 2012..



A month later, the luxury car was slammed by Consumer Reports, which gave it a "failing grade" in one of the most brutal car reviews we've ever seen. Just read what's in the yellow box..


A month later, the luxury car was slammed by Consumer Reports, which gave it a

Fisker was dealt an even more serious blow in October: A123, the manufacturer of its car batteries, declared bankruptcy..


Fisker was dealt an even more serious blow in October: A123, the manufacturer of its car batteries, declared bankruptcy.

A month later, it halted production of the Karma indefinitely, due to the lack of batteries..


A month later, it halted production of the Karma indefinitely, due to the lack of batteries.

And it delayed production of the Atlantic — originally planned for 2012 — to late 2014..


And it delayed production of the Atlantic — originally planned for 2012 — to late 2014.

Fisker's problems were compounded by leadership changes: Henrik Fisker, Tom LaSorda, and Tony Posawatz all served as CEO in the space of a year. .


Fisker's problems were compounded by leadership changes: Henrik Fisker, Tom LaSorda, and Tony Posawatz all served as CEO in the space of a year.

This week, co-founder Henrik Fisker suddenly resigned, citing "major disagreements" with executive management..


This week, co-founder Henrik Fisker suddenly resigned, citing

In December, Posawatz (who is still at the helm), announced Fisker had hired Evercore Partners to find it potential investors and buyers. According to the Wall Street Journal, it's looking mostly in China and Europe..


In December, Posawatz (who is still at the helm), announced Fisker had hired Evercore Partners to find it potential investors and buyers. According to the Wall Street Journal, it's looking mostly in China and Europe.

That may save the company, but it will mean that a foreign automaker will have a majority stake in a company on which the American people have spent nearly $200 million..


That may save the company, but it will mean that a foreign automaker will have a majority stake in a company on which the American people have spent nearly $200 million.

Meanwhile, no more Karmas are being built, no Atlantic has hit the road, and the Delaware plant — with its promised 2,500 jobs — sits nearly empty..


Meanwhile, no more Karmas are being built, no Atlantic has hit the road, and the Delaware plant — with its promised 2,500 jobs — sits nearly empty.

The once-great promise of Fisker is gone, and unless it pulls off a miracle, it could go down as a repeat of the Solyndra fiasco: a symbol of poorly thought out federal loans and too much ambition..


The once-great promise of Fisker is gone, and unless it pulls off a miracle, it could go down as a repeat of the Solyndra fiasco: a symbol of poorly thought out federal loans and too much ambition.


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