(ANAHEIM, Calif.) — The government-backed electric car company Fisker Automotive laid off about 160 workers Friday, or roughly 75 percent of the automaker’s staff, as it has struggled to find financial backing that would allow it to continue building its high concept clean cars.
The layoff announcement came as the innovative start up faces a looming repayment on a loan from the U.S. Department of Energy, and as reports have swirled that it could be preparing to file for bankruptcy. As with the failed solar firm Solyndra, the green car company was once an early pick by the Obama Administration to be part of America’s clean energy future. The Obama Energy Department had approved Fisker for a government loan up to $529 million.
Stunned workers filed out of Fisker’s Anaheim headquarters Friday morning with their belongings in boxes. One told ABC News that the employees had no advance notice the layoffs were coming, and they were told they would receive no severance.
Among Fisker employees, the worker said, there was an overwhelming sense of sadness Friday that even after building a new, environmentally-focused line of gracefully-designed, high-end American cars, they had not been able to find financial success.
An Energy Department spokesman said Friday that early signs of the company’s distress prompted officials there to freeze payments to Fisker after having provided the company with nearly $200 million to produce its first car, the $97,000 Fisker Karma.
“The Department of Energy stopped payment on the federal loan in 2011 after Fisker stopped meeting their milestones, and is committed to the best outcome for taxpayers,” the Energy Department statement said, before defending other green investments by the Obama administration.
“Despite Fisker’s difficulties, our overall loan portfolio of more than 30 projects continues to perform very well, and more than 90 percent of the $10 billion loan loss reserve that Congress set aside for these programs remains intact,” the department said.
Among those laid off by Fisker Friday were the company’s team of spokespeople. The head of that team, Roger Ormisher, told ABC News earlier this week that he could not address reports that the automaker had hired a law firm to prepare it for bankruptcy.
“We are not offering any official comment on the speculation around bankruptcy at this stage,” Ormisher said.
Even before the layoffs, the company 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 had 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 its loan from the Department of Energy and has been making repayments on the interest for several years, but the first sizeable repayment of the principle – an amount the company has not disclosed – is due by April 22.
Copyright 2013 ABC News Radio
Julia Horowitz, CNN
Susan Scutti, CNN
Paul Menser, BizMojo Idaho
Paul Menser, BizMojo Idaho