Why did Fisker Automotive fail? Just ask a customer

fisker2.jpgBruce Simon paid $100,000 for the Fisker Karma, a nifty looking plug-in that must have gotten a lot of interested stares in Omaha, Nebraska, where he is CEO of Omaha Steaks. Solar-paneled roof, zero to 60 in 6.3 seconds, nearly as low as a Porsche 911 - the Karma could have been a contender all right. Except that it never had the chance. An untested technology and a car company built from scratch should have raised warning flags before it was too late. From the WSJ:

Mr. Simon says his car broke down four times over the span of a few months. Each time, Fisker Automotive Inc. picked it up and sent it by trailer from his home in Omaha, Neb., to a dealer in Minneapolis. The Karma was "so vulnerable to software errors, and the parts used were of such poor quality that eventually I insisted they take the car back and return my purchase price, which they did," he says. "It's a real shame, the car itself was beautiful."

The Anaheim-based automaker hasn't yet filed for bankruptcy, but the Journal, along with the NYT and others, are already filings obits. Another DeLorean, they say, except worse because the federal government was knee-deep in Fisker's financing. The Fisker people wanted to start out small, but the Obama administration had bigger - and dumber - ideas. Fisker received loans totalling $529 million, and that only encouraged private investors to join the party.

Even with its wealthy backers, Fisker had plenty of problems. Troubles with suppliers and regulatory requirements added months to the Karma's release. Its engineers expressed concerns that the software that ran the Karma's display screens and phone connections wasn't ready, people familiar with the situation say. Still, the Karma went out to customers. The company said that its problems were expected of any new model. In May 2011, the Obama administration, under pressure from critics of its alternative energy spending and after the high-profile failure of U.S.-backed solar panel maker solar panel makerSolyndra LLC, froze disbursements to Fisker citing delays in the Karma's rollout. Nonetheless, Fisker kept ordering parts to build Karmas, piling up costs even as the company struggled to fix software and other problems that prompted complaints from early buyers, and led to critical reviews in auto publications.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
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