The big challenge will be coming up with the cash to bring the Fisker Atlantic to market.
Now that the company’s eponymous founder has tendered his resignation, have several possible Chinese partners also decided to take a pass on Fisker Automotive? That appears to be a strong possibility according to published reports and several sources TheDetroitBureau.com has spoken to.
The question then is whether the struggling battery-car maker will have the resources to continue on its own considering its financial problems and the repeated delays in launching the company’s critical second product, the Fisker Atlantic.
Founder and non-executive Chairman Henrik Fisker tendered his resignation last Wednesday, citing “several major disagreements” with senior management. While Fisker has declined to be interviewed about the source of that trouble, company sources tell TheDetroitBureau.com the issues appear to have largely centered around a disagreement with CEO Tony Posawatz over how much money was needed to move the company forward and where it would come from.
Prior to tendering his resignation, Fisker, the former luxury car designer, had told TheDetroitBureau.com that the battery-car maker had already raised $1.2 billion in private equity. He apparently felt that was enough to move forward – on a tight budget. It appears Posawatz felt Fisker Automotive needed significantly more capital. The challenge was finding it.
Apparently, Posawatz, the former head of the Chevrolet Volt program, was hoping to convince the government to re-open a $529 million Department of Energy loan that was frozen after Fisker Automotive failed to meet initial targets for the launch of its first plug-in model, the Karma.
Posawatz’s plan also called for bringing onboard a new partner and it is widely believed that two Chinese makers, Dongfeng and Geely, have been negotiating with Fisker, possibly even proposing a complete takeover. Dongfeng is the Chinese partner of Nissan while Geely is an ambitious domestic maker that bought Volvo several years ago.
According to TheDetroitBureau.com sources, as well as published wire service reports, Geely has walked away from its proposal since the departure of Fisker’s founder. The company found it “too risky,” according to one source. Sources disagree on whether Dongfeng will continue negotiating with Fisker, meanwhile.
For the California start-up’s part, Fisker spokesman Roger Ormisher would only say that “We remain engaged in conversation with a number of different people.”
An insider, asked about whether the Chinese might be backing out said he’d not be surprised to see Geely and Dongfeng play hardball by threatening to back out. “It’s a game of poker,” he said of the negotiations, echoing the comments of other industry observers who warn that few are as good at negotiating the best terms than the Chinese.
The possibility that Fisker might fall into the hands of the Chinese is not something everyone is pleased with, especially after China’s Wanxiang purchased the assets of bankrupt battery maker A123 late last year. Referring to the more than $300 million that Fisker did access before the DoE loan was frozen, Sen. Chuck Grassley, a Republican from Iowa, recently asserted that, “Technology developed with American taxpayer subsidies should not be sold off to China.”
That would suggest that Posawatz could find himself between a rock and a hard place. His plan apparently needs the DoE cash as well as help from a partner. But if that partner were Chinese it would seem highly difficult to get the feds to free up the cash.
How much Henrik Fisker’s departure will impact the company’s future remains uncertain. While Ormisher declined to discuss the matter, the automaker issued a statement last week indicating, “The Company has a strong and experienced management team and its strategy has not changed. Mr. 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.”
When reached by TheDetroitBureau.com this week, former company chairman Fisker would only say that he is, “getting all sorts of amazing calls about doing some amazing things” in the future.