New Fisker captain faces rough seas on Atlantic
Cash crunch delays launch of crucial 2nd vehicle
LOS ANGELES -- Fisker Automotive hired a high-profile CEO with strong electric-drive credentials last week: Tony Posawatz, former chief engineer for the Chevrolet Volt.
Despite the hoopla, the fledgling automaker has yet to indicate that it is any closer to meeting its fundamental challenge: launching its second vehicle, the Atlantic.
Posaswatz arrives as Fisker officials scramble to escape a desperate cash flow shortage and amid layoffs of 50 employees during the last six months. He succeeds Tom LaSorda, a former Chrysler CEO, less than six months after LaSorda took the helm of Fisker.
The company gave no reason for LaSorda's departure, and LaSorda did not return a phone message seeking comment.
Henrik Fisker, Fisker Automotive's co-founder and executive chairman, said last week that even though the Atlantic has been under development for some time, Posawatz still will be influential in the final vehicle.
New CEO Tony Posawatz was chief engineer for the Chevrolet Volt.
While Posawatz is a respected EV engineer, losing LaSorda means Fisker has lost its best manufacturing brain as the company tries to start building the Atlantic, a mid-sized plug-in hybrid sedan expected to cost $50,000 to $60,000.
Fisker plans to sell the car in greater volumes than its $100,000-plus Karma sedan, which Fisker will only say has sold more than 1,000 units in the United States since its launch last October.
Atlantic sales are needed to generate the revenue Fisker sorely needs for long-term viability. But starting production from scratch is expensive.
Atlantic production originally was to begin in late 2012. The sporty rear-wheel-drive sedan was to be the opening salvo in a product offensive that would include a Fisker convertible and five-door wagon.
The Fisker Sunset convertible concept was revealed in 2009. Henrik Fisker told Autoweek at the 2011 Frankfurt auto show that the Sunset would go on sale in 2013. The Fisker Surf concept wagon also debuted at the 2011 Frankfurt show.
These products, and possibly more, were to fulfill Henrik Fisker's vision of producing up to 150,000 vehicles per year by 2016, as Fisker told Automotive News in late 2010.
But Atlantic development work has been on hold for more than six months after the U.S. Department of Energy in February blocked Fisker's access to about $336 million in loan money for the project.
That put Fisker in a defensive posture. To preserve cash, the company laid off 26 employees, many of whom were engineers, while it searched for alternative financing.
Six months later, and despite earning $100 million in revenue from Karma sales through April, the company still is seeking cash to get the Atlantic into production.
Since February, Fisker has cut another 25 employees, many of whom were engineers needed to bring the Atlantic to market.
Ray Lane, a Fisker director and a managing partner at venture capital firm Kleiner Perkins Caufield & Byers, told Reuters last week that Fisker needs $150 million in new capital and may need to go to investors again next year for additional funds.
Fisker has raised $1.1 billion in private capital, including about $400 million in the last year.
"We need money on our balance sheet," Lane told Reuters. "And we need money to fund the development of our next car."
Fisker spokesman Roger Ormisher said last week that the company is "still in the middle of raising financing."
"There are a number of different options on the table for financing that project, and we're exploring every one of them," he said. "We hope to reach a decision soon on that and we can move forward."
Aaron Bragman, senior auto industry analyst at IHS Inc., said in a research note that Posawatz's hiring was a positive move for the development of the Atlantic. But, Bragman wrote, it "does little to imbue confidence in the company's financial future."
"Hiring a guy like Posawatz, a noted development engineer, an EV expert, a guy who works well under fire and with severe deadlines -- he's really a guy I think that's an asset to the company as they try to get [the Atlantic] into production," Bragman said in an interview.
But Posawatz's hiring also means Fisker loses LaSorda, a seasoned auto executive with years of manufacturing and operational experience, he noted.
Development work for the Atlantic is about "90 percent done," Ormisher said, though he declined to elaborate about what work remains to be completed.
The company also must commit to and tool up a plant.
After losing access to the government loans because it missed business development milestones, Fisker halted preparations to assemble the Atlantic at the Wilmington, Del., plant Fisker acquired from General Motors in 2009.
Ormisher said Wilmington is still the company's "logical first choice" for Atlantic production. But it may be built elsewhere, he said.
A decision on the plant is expected by fall, Ormisher said, repeating a statement LaSorda made in April.
Ed Kim, director of industry analysis at AutoPacific, says that even if Fisker raises the required cash, restarting the Atlantic project will be tough.
Said Kim: "The pause button has been hit for several months now. Even when you're in a position to hit play again, it still takes time to rebuild that momentum."
Mark Rechtin and Lindsay Chappell contributed to this report
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