Fisker Automotive furloughed its 200 employees this week and has hired a team of lawyers to help keep the company out of bankruptcy.
The hybrid car maker has hired restructuring lawyers at Kirkland & Ellis LLP in case it can’t find an investor or strategic partner to help keep it afloat, the Wall Street Journal reports. The company faces an April 22 deadline for a loan payment, and is $192 million in debt to the U.S. government after receiving a Department of Energy “green” loan.
The company was supposed to receive $529 million, but the DOE declined to pay the full amount in May 2011 after Fisker fell behind on its targets. The company stopped manufacturing its $100,000 Karma hybrids in July and has faced a string of trouble with the products it has made, including recalls and problems with its lithium ion batteries.
Founder Henrik Fisker also resigned last month, attributing his exit to major disagreements with management.
“In parallel with the process of identifying a strategic partner, Fisker is of course continuing to manage its day-to-day operations and has recently instituted temporary furloughs for its U.S. workforce covering the final week of March,” the company said in a statement, according to the Orange County Register. “This is a common practice, particularly in the automotive industry, to manage costs and operations based on current activity levels and commercial requirements.”
Fisker got some bad news in its search for investors this week as well. Chinese auto maker Dongfeng Motor Group was in talks to buy a stake of the company, but said Thursday it is no longer interested, Bloomberg reports.
The company that produced the Karma’s lithium ion batteries, A123 Systems, has also faced a long series of problems. The battery maker went bankrupt, was bought by a Chinese company and changed its name to B456 Systems. The name hints the company may have a sense of humor about its string of failures— a B456 is also a fire extinguisher model.