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Filed under: EV/Plug-in, Hybrid, Fisker

Fisker Karma

Anyone looking for a chilling plug-in vehicle warning tale should check out this detailed Reuters article, which digs into the financial history of Fisker Automotive and reveals that the company lost around $35,000 per vehicle.

That number comes from “internal financial statements and interviews with former Fisker executives,” Reuters reports, quoting a former executive saying the luxury plug-in hybrid, “cost far more to produce than we could ever charge for it.” All told, between 2008 and 2012, Reuters estimates Fisker lost $1 billion.

The losses were due, in part, to those many production delays two to three years ago as well as a reduction in the number of cars it was going to make and sell. Remember when the company said it would sell 15,000 units a year? Eventually, the company sold around 2,000 vehicles, total.

There is a lot worth reading in the source article, including how the Karma’s forward-placed exhaust – which hurt the vehicle’s performance and was too loud – was fixed using a metal “pizza box” that cost millions extra. Throw in salaries of around $600,000-$700,000 for co-founders Henrik Fisker and Barny Koehler, even while Fisker was laying people off, and you have a recipe for not succeeding. Here’s a taste of what Reuters has to offer:

In May 2011, the company co-sponsored a pre-race grand prix party aboard a 146-foot yacht moored in the Monte Carlo harbor. Guests drank glasses of champagne served with flecks of gold. Clad in a dark pinstripe suit and open-neck white shirt, Henrik Fisker navigated a crowd that included Prince Albert of Monaco, whom he described as the inspiration for the Karma. … The Monaco weekend, according to several sources familiar with the event, cost Fisker between $80,000 and $100,000. That wasn’t lavish by auto-marketing standards, but by this point every penny mattered. Within weeks, the Energy Department stopped payments on its loan.

You can read the whole thing here.

Internal documents show Fisker lost $35,000 on each Karma originally appeared on Autoblog Green on Mon, 17 Jun 2013 10:44:00 EST. Please see our terms for use of feeds.

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Filed under: Government/Legal, GM, Earnings/Financials

General Motors Renaissance Center

Now that General Motors has submitted the necessary paperwork for its IPO to the SEC, Forbes read through the entire 734 page filing and found this curious tidbit: “We have determined that our disclosure controls and procedures and our internal control over financial reporting are currently not effective.” And yes, that means exactly what you think it means.

In case you think it’s only cautious puffery, the document goes on to say, “Until we have been able to test the operating effectiveness of remediated internal controls and ensure the effectiveness of our disclosure controls and procedures, any material weaknesses may materially adversely affect our ability to report accurately our financial condition and results of operations in the future in a timely and reliable manner.”

And there’s more, but the gist is that GM wants you to know that it might have to shuffle some of its past numbers at some future date. The problem seems to go back to early last year, when new accounting procedures were put in place to please the SEC. The General’s trip to ~~Narnia~~ bankruptcy and back, however, prevented it from fully vetting those procedures, so it can’t be 100% certain that they’re 100% accurate. It could actually just be caution on GM’s part, but nevertheless, some funny things are happening on the way to this IPO…

[Source: Forbes]

GM to Investors: Internal financial reporting controls are ineffective originally appeared on Autoblog on Sun, 22 Aug 2010 16:33:00 EST. Please see our terms for use of feeds.

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