Is Fisker Headed for a Solyndra-Like Collapse?
Green car company mum on reports of possible bankruptcy preparations.
April 2, 2013— -- As a major financial deadline looms, a green car company that was approved for a $529 million loan from the U.S. Energy Department is keeping quiet about whether it could be headed towards a Solyndra-like collapse, following reports the company may be preparing for bankruptcy.
"We are not offering any official comment on the speculation around bankruptcy at this stage," Roger Ormisher, a spokesperson for the electric car company Fisker Automotive, told ABC News recently.
Ormisher was responding to questions about reports last week that Fisker had hired a prominent law firm to advise it on possible bankruptcy proceedings. The Anaheim, Calif.-based company recently disclosed that it had furloughed non-essential U.S. workers in March, a move made as the company is "in the process of identifying a strategic partner... [but] continuing to manage its day-to-day operations," Ormisher said.
Fisker Automotive entered the electric car market with hefty support from the U.S. Energy Department and backing from such celebs as Justin Bieber and Leonardo DiCaprio, but the company and its high-priced Fisker Karma have continued to skid financially.
If the California-based luxury carmaker goes bust, it will be the most high profile failure of an alternative energy firm backed by the Obama administration since the solar company Solyndra filed for bankruptcy in 2011.
In April 2010, Fisker started receiving payments on a loan of up to $529 million from the Department of Energy as part of the Obama administration's push to bolster alternative energy firms. Fisker has been making repayments on the loan interest for several years, but the first sizeable repayment of the principle – an amount the company has not disclosed – is due at the end of April.
The loan to Fisker was part of a $1 billion bet the Energy Department made in two politically-connected California-based electric carmakers producing sporty -- and pricey -- cutting-edge autos. Fisker Automotive, backed by a powerhouse venture capital firm whose partners included former Vice President Al Gore, predicted it would eventually be churning out tens of thousands of electric sports sedans at the shuttered General Motors factory it bought in Delaware. The other major recipient of financial support, Tesla Motors, is backed by PayPal mogul Elon Musk.
Fisker launched the Karma with great fanfare, showing off prototypes of its sleek, quiet-running sports sedan at major auto shows and opening showrooms around the globe.
In October 2011, ABC News aired reports revealing that the government loan to Fisker raised concerns among industry observers and government auditors, and added to questions about the way billions of dollars in loans for smart cars and green energy companies were being awarded.