Fisker production on hold until A123 sale clears

Article by Anita Panait, on December 13, 2012

The short-term outlook of hybrid sports car maker Fisker Automotive may depend on the result of the bid of Chinese components maker Wanxiang Group to acquire collapsed US battery company A123 Systems. Fisker has not produced a car in six months, saying that it would not resume production until after A123, its battery supplier, wraps up a court-managed sale.

The Delaware Bankruptcy Court approved the $256.6 million sale of A123 to Wanxiang Group on December 11, 2012. However, the sales agreement still needs the approval of the Committee on Foreign Investment in the United States. Fisker spokesman Roger Ormisher told Reuters that the carmaker plans to wait until Wanxiang takes full control of A123, after which it will get in contact with the Chinese firm to discuss a contract.

Ormisher said Fisker would resume Karma production once an agreement is reached with A123's new owner. Ormisher assured that until then, Fisker has a sufficient supply of cars, noting that the carmaker is not looking for a new battery supplier. Both A123 and Fisker received government financing to support green-technology development. However, Fisker’s $100,000-plus Karma model is built by contractor Valmet in Uusikaupunki, Finland.

Ormisher disclosed that no Karmas have been built in Uusikaupunki since July, when the Finnish group starts a traditional summer break. With the pause in Karma production and a delay in the development of its second model, the Atlantic, Fisker reduced its workforce to around 300 people.

Fisker announced last week that it has tapped investment bank Evercore Partners Inc. to search for partners and investors, but rejected reports that they are mulling a sale of the hybrid sports car maker. Fisker had said it had held talks with potential strategic partners to reduce costs and raise money to build the Atlantic.

Topics: fisker, a123, production

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