The lithium ion battery maker blames the layoffs on slashed orders from customer Fisker Automotive. When will business pick up enough to bring them back?
Thanksgiving didn’t have much to offer by way of thanks for about 125 employees of A123 who were laid off from the lithium-ion battery maker’s Livonia and Romulus, Mich. factories last week.You may also remember this 2009 WSJ story:
The layoff announcements came just weeks after A123 reported rising third-quarter losses and lowered its annual revenue forecast, a sad state of affairs it blamed on reduced orders from big customer Fisker Automotive.
A123 has said it hopes to hire back the workers after six months or less, and still employs about 700 workers at the two plants and at A123’s engineering center in Ann Arbor, Mich.. “The part we really want to stress is we expect it to be temporary, hopefully a blip we all get past,” A123 spokesman Dan Borgasano told local reporters.
Still, for a company that built its Michigan plants with the help of a $125 million state grant and a $249 million Department of Energy stimulus grant, it’s a bad way to enter the holiday season. Given the troubles that bankruptcies at DOE loan guarantee winners Solyndra and Beacon Power have given the Obama Administration, A123’s layoffs aren’t going to be welcome political news in the White House, either.
A123 has laid blame for the layoffs squarely on Fisker’s decision to reduce its orders for battery packs. The two companies inked a partnership last year which came along with a $23 million investment by A123 into Fisker.
But Fisker has struggled to deliver its first car, the high-end hybrid Karma sports car, with only about 40 cars delivered to date. Earth2Tech reported that A123 said Fisker is now looking to delay full-scale Karma production until mid-2012 — that despite the fact that it’s raised close to $700 million, most recently with a $58 million tranche of a $150 million “pre-IPO” round....MORE
Gore-Backed Car Firm Gets Large U.S. Loan
WASHINGTON -- A tiny car company backed by former Vice President Al Gore has just gotten a $529 million U.S. government loan to help build a hybrid sports car in Finland that will sell for about $89,000.
The award this week to California startup Fisker Automotive Inc. follows a $465 million government loan to Tesla Motors Inc., purveyors of a $109,000 British-built electric Roadster. Tesla is a California startup focusing on all-electric vehicles, with a number of celebrity endorsements that is backed by investors that have contributed to Democratic campaigns.
The awards to Fisker and Tesla have prompted concern from companies that have had their bids for loans rejected, and criticism from groups that question why vehicles aimed at the wealthiest customers are getting loans subsidized by taxpayers.
"This is not for average Americans," said Leslie Paige, a spokeswoman for Citizens Against Government Waste, an anti-tax group in Washington. "This is for people to put something in their driveway that is a conversation piece. It's status symbol thing."....MUCH MORE