Fisker Automotive layoffs 26 in Delaware, 45 in California

A cash crunch has forced Fisker Automotive to lay off 26 of about 100 workers refurbishing the former General Motors plant near Newport for a U.S. manufacturing base for the California start-up firm.

The layoffs, which affected both regular employees and subcontractors, come as Fisker trims expenses while it waits to qualify to draw down more cash from the Department of Energy, which conditionally promised to lend the automaker $529 million to help build its first two models and get its Delaware operations running.

The company, which also laid off 40-45 workers at its California headquarters, must meet specific fundraising, production and sales goals to qualify for successive disbursements from the loan. Fisker is behind schedule for producing and selling its first model, the $108,000 Karma sedan.

“Until that happens, they’re trying to preserve the cash that they have,” said Alan Levin, Delaware’s director of economic development. “And unfortunately, until they meet the milestone that DOE continues to set … they’re not able to access the additional capital that they need.”

In recent weeks, the company has scaled back 2012 sales projections for the Karma luxury sports car, blaming slow mileage and emissions certification processes that took longer than expected. It also needed to recall sold models to fix a coolant hose problem and, later, to issue a software upgrade to tame a balky console computer.

Fisker has said it would begin assembling the company’s second plug-in hybrid model – still with just the project name “Nina” – at the Boxwood Road plant in mid-2013. Prototypes were to begin rolling out of the factory this fall.

A Fisker spokesman said Monday that negotiations are under way with the Energy Department to modify the loan achievement goals to allow some cash to be drawn down.

“To date we have received $193 million of the $529 million Department of Energy loan, mostly for the Karma program, and received our last reimbursement in May 2011,” Fisker spokesman Roger Ormisher said in a statement Monday. “We are renegotiating some terms of the DOE agreement for the $336 million balance of the loan related to the Project Nina program.”

Source: Delaware Online