Fisker Automotive, the maker of an exotic electric sports car that is being built with help from a $529 million federal government loan guarantee, has announced layoffs at its Delaware plant as it tries to persuade the Department of Energy to send it more public funds.
The company says 26 Fisker employees have been let go from the Delaware factory where renowned automotive engineer Henrik Fisker promised to one day begin producing affordable electric sedans. A Delaware newspaper also reported that subcontractors working on the car venture have been let go.
"It's temporary," said Roger Ormisher, a company spokesman. "We're being prudent and sensible as a company."
Fisker was one of a handful of auto companies to receive sizeable federal loans to help support the birth of an electric car industry in the United States. As ABC News reported in October, Fisker's efforts have been beset by delays. And despite benefitting from U.S. taxpayer support, the company had signed a contract with a firm in Finland to assemble its first generation electric vehicle, a flashy $97,000 sports coupe called the Karma.
Accompanying the layoffs was an announcement that Fisker has approached the Department of Energy about revising the targets it had to meet in order to continue drawing money from the federal loan. Whether the Energy Department agrees to alter the terms, and invest more taxpayer in the Fisker venture remains unclear. Critics of the Obama administration told ABC News they worried that Fisker was at risk of becoming the next Solyndra -- a reference to the now-bankrupt solar panel firm that received support from a government loan program.
Department of Energy officials said they understand that Fisker has experienced production delays, but said they are not uncommon for a new company. And the department remains hopeful about the company's future, in part because it has successfully raised more than $650 million in private sector investment to support its ongoing operations.
"Our loan guarantees have strict conditions in place to protect taxpayers," said DOE spokesman Damien LaVera. "The Department only allows the loan to be disbursed as the company meets certain milestones and demonstrates results. As has been widely reported, Fisker has experienced some delays in its sales and production schedule -- which is common for start-ups. As Fisker works through those issues and incorporates lessons learned from the production of the Karma, the Department is working with Fisker to review a revised business plan and determine the best path forward so the company can meet its benchmarks, produce cars and employ workers here in America."
When asked directly by ABC News in October if taxpayers should worry about the more than $500 million in federal funds on the line, Henrik Fisker was emphatic: "No, I don't think they need to worry about it." When asked if Fisker might be the next Solyndra, he said, "Absolutely not."
To date, Fisker has received $193 million in government funds, according to a company statement. Back in October, the company acknowledged outsourcing Karma assembly to Finland, but said that the bulk of its government funds would be used to launch a second-generation electric vehicle, still under wraps, that would be assembled in a shuttered General Motors plant in Delaware. Some of those hired to prepare the Delaware plant for that effort were among those let go.
That project, code-named Project Nina, has been put off until sometime in 2013.
"We have temporarily delayed work at the plant based on ongoing discussions with the DOE regarding funding for the Project Nina program," the company's statement said. "As a result, we have laid off 26 people."
Ormisher said Fisker has delivered between 250 and 300 Fisker Karmas in the United States, and the company is nearing approval to sell the cars in Europe.