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Fisker Automotive lays off some workers as government reworks loan

Mon, 06 Feb 2012

Work on the Fisker Nina family sedan has temporarily halted at the Fisker Automotive plant in Wilmington, Del., while the carmaker and the federal government hash out details of the company's $529 million Department of Energy loan. The interruption has resulted in the layoff of 26 people at its Delaware plant and a number of contract engineers at Fisker's Anaheim, Calif., headquarters.

Fisker Automotive said some of the engineering-staff reductions in Anaheim were already planned to occur in between development of the Karma and the Nina.

Why is the Department of Energy reworking the loan? One of the requirements for the massive funding was that Fisker meet certain deadlines, or milestones, for production of the Karma sedan. When those deadlines were not met, the department required modification of the terms of the loan to incorporate new deadlines for the company's second car, the Nina. Fisker Automotive downplayed the renegotiations as normal.

"DOE loan-modification negotiations are fairly standard procedure," Fisker spokesman Roger Ormisher said. "We have to deliver on certain milestones, and we didn't hit all our targets with the Karma. This is a relatively ordinary series of events."

Ormisher said much of the Delaware plant was on schedule for the Nina, with stamping presses and robots in place, though more equipment still needs to be installed. Design work on the Nina is signed off on and the range-extending engine, a BMW four-cylinder, has been selected.

"Project Nina is already well advanced," the company said in a statement. "Much of the engineering, design and development is near complete, and we expect to ramp up operations again quickly."

The Nina family car will be smaller than the Karma, sized between an Audi A4 and an A6, or a Mercedes-Benz C-class and E-class. Details of the range-extending BMW engine have not been released.

Production of the Fisker Karma continues at Valmet Automotive in Finland.

To date, Fisker has used $193 million of the $529 million government loan, mostly for the Karma. The renegotiations are for the remaining $336 million, which will go toward the Nina.

In the meantime, Fisker Automotive continues to pursue nongovernment funding, having raised more than $850 million of that so far.

By Mark Vaughn