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Gov't-Subsidized Company Goes Through Another Round of Layoffs: Plant Is 'Absolutely Empty

Gov't-Subsidized Company Goes Through Another Round of Layoffs: Plant Is 'Absolutely Empty

"As we ramp up the project again we will add new headcount."

An electric car manufacturer that was awarded more than half a billion dollars in loan guarantees from the Department of Energy has gone through a second round of layoffs.

“On Friday, Delaware Online reports, 12 more workers -- including engineers and maintenance technicians -- were laid off at [Fisker’s Delaware plant], leaving ‘only a small maintenance team’ left there,” Sebastian Blanco writes for AOL autoblog.

“One of those let go was Jeff Garland, who had been working on community affairs and business development efforts in Delaware. He said the plant is currently ‘absolutely empty.’ This is because Fisker has taken out the old GM equipment but has not yet installed the machines it would need to build the Atlantic,” Blanco adds.

Fisker has already fired 26 employees. What's the reason for another round of layoffs?

"I think what happened was the budget numbers are so tight right now and they're working so hard to preserve as much cash as they can that something had to give. We're not making a car in Wilmington right now, so given that situation it was an obvious place to make a cut,” Garland told Delaware Online.

Analysts blame the lousy state of Fisker's finances on the fact that the DOE has denied the company the second round of its loan.

Here, as reported earlier on The Blaze, this is Fisker's situation:

  1. Fisker Automotive is given $193 million of a $529 million DOE loan to produce two lines of plug-in hybrid cars and, presumably, create jobs.
  2. The company is unable to find a contract manufacturer in the United States, so it outsources manufacturing jobs to Finland (the company vehemently denies charges that it has used any part of the federal loan to fund manufacturing operations in Finland).
  3. The automaker falls behind its production schedule and experiences “delays” in its sales (i.e. poor sales), depleting its capital.
  4. But to qualify for the rest of the $529 million loan guarantee, the company has to maintain a certain amount of capital.
  5. Therefore, in order to meet this DOE benchmark, Fisker Automotive decides it will save money by laying off an “undisclosed number” of employees.

The company maintains that this is only a momentary setback and that it will be back on its feet in no time.

“We have always had a flexible business model that allows us to scale up and down as work demands. As we ramp up the project again we will add new headcount,” said Fisker spokeman Russell Datz.

“We’ve accomplished a lot at the plant, using more than 40 local contract firms to recycle old material and equipment. The plant is now ready for the next phase of installing new production equipment,” he added.

Of course, as many Blaze readers know, this isn't the first time Fisker has been in the news.

First, as mentioned in the above, the Al Gore-connected auto company outsourced manufacturing duties to foreign plants. Next, there were the mass layoffs. Lastly, there was the story about A123 Systems, the company that developed batteries for Fisker cars, firing 125 employees.

(H/T: WZ)

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