By Ben Geman - 04/05/13 09:50 PM EDT
Fisker Automotive, a federally backed maker of plug-in hybrid cars, laid off 75 percent of its workers Friday as it struggles to stay afloat and find new capital, according to press accounts.
The company said the cuts are a “strategic step in our efforts to maximize the value of Fisker’s core assets.”
The company recently hired bankruptcy lawyers in preparation for a possible filing.
Fisker drew $193 million of a $529 million Energy Department loan
agreement reached in 2009 before the department halted payments in 2011.
Reuters, citing a source present at the Friday meeting where the layoffs were announced, reports that “Fisker asked 53 senior managers and executives to stay on board, primarily to pursue buyers for the company's assets.”
Fisker’s ongoing struggles have, in recent years, been fodder for GOP attacks against Obama administration energy and green technology efforts that critics call ineffective.
Here’s the Associated Press Friday on what ails Fisker:
Fisker, which makes the $100,000 Karma plug-in hybrid sports car, hasn't produced any cars since last year after its battery supplier filed for bankruptcy protection. The company has struggled to attract investment and was shopping around for a buyer or company to join it in an alliance. Last month, its co-founder resigned and Fisker furloughed its staff of about 220 for one week. The company at one time had about 600 workers.
The layoffs are likely to spark new criticism of Energy Department loan and loan guarantee programs.
They have come under heavy attack from Republicans and conservative groups since the 2011 collapse of the solar panel maker Solyndra and some other bankruptcies.
But the Obama administration and its defenders say the programs have, in the main, been a success. The program supports an array of renewable power, manufacturing, auto and other projects.
“Despite Fisker’s difficulties, our overall loan portfolio of more than 30 projects continues to perform very well, and more than 90 percent of the $10 billion loan loss reserve that Congress set aside for these programs remains intact,” said Energy Department spokeswoman Aoife McCarthy in a statement to Bloomberg.
Fisker won funding under the Advanced Technology Vehicles Manufacturing loan program that was authorized in a bipartisan 2007 law but got rolling under the Obama administration.
Solyndra and other green power projects won loan guarantees under a related, but separate, program authorized in 2005 legislation and expanded in the 2009 stimulus law. All the loan guarantees have been issued during the Obama administration.