Gary Zhou 
- 🏦 Fisker filed for Chapter 11 bankruptcy earlier this summer.
- 👫 CEO Henrik Fisker and his wife, Geeta Gupta-Fisker, are making significant sacrifices to keep the company afloat.
- 💡 Efforts to save the company include slashing employee headcounts and not using electricity at headquarters.
- 💸 The Fiskers have decided to reduce their salaries to just $1 each per year.
- 📉 The company once had 1,300 employees but now employs around 130.
- 🚗 Fisker requested permission to sell 3,312 Ocean EVs for $46 million to raise funds.
- 🛠 Costs like upcoming vehicle recalls are also impacting the company’s financial health.
In the rapidly evolving world of electric vehicles (EVs), Fisker Inc. has been a name synonymous with innovation and bold aspirations. However, even the most ambitious companies are not immune to financial turbulence. Earlier this summer, Fisker Inc. filed for Chapter 11 bankruptcy, a move that normally spells doom for companies. But the story doesn’t end there. CEO Henrik Fisker and his wife, Geeta Gupta-Fisker, are making personal and professional sacrifices to keep their dream alive.
The Tough Decision: Chapter 11 Bankruptcy
Fisker filed for Chapter 11 bankruptcy earlier this summer, essentially giving the company a lifeline to reorganize rather than liquidate all its assets. This step has allowed Fisker to continue operating, albeit under stringent measures. With the company fighting to stay afloat, the spotlight has turned on the efforts by the Fisker leadership team to save it.
Personal Sacrifice: Salary Reductions
One of the most noteworthy steps taken by Henrik Fisker and Geeta Gupta-Fisker involves slashing their own salaries to a mere $1 per year. While they both earned a significant income in 2022, including bonuses amounting to $710,000 and shares that gave them majority voting control, they have drastically cut their compensation to preserve company funds.
Extreme Measures: Cost-Cutting Strategies
The sacrifices made by the Fiskers are part of a wider strategy to cut costs:
- Employee Headcounts: Fisker once employed 1,300 people, but this number has now been slashed to around 130. These layoffs have saved significant operational costs but have left remaining employees overburdened.
- Operational Expenses: The company has resorted to drastic measures like turning off electricity at their headquarters, further reducing costs.
- Deferred Payments: Fisker is also deferring certain severance payments, employee healthcare benefits, and vehicle sale incentive bonuses.
Financial Maneuvers: Asset Liquidation
Fisker Inc. is leaving no stone unturned when it comes to raising funds. The company has requested permission to sell 3,312 Ocean EVs for $46 million to a car leasing firm named American Lease. While this seems like a substantial sum, it boils down to just $14,000 per unit, signifying that Fisker is willing to liquidate assets below market value for immediate cash flow.
Additional Challenges: Vehicle Recalls
Compounding Fisker’s woes are recent vehicle recalls in the United States, Canada, and the EU due to a water pump issue. These recalls not only dent the company’s finances but also its reputation. The costs associated with these recalls are further strained on Fisker’s limited resources, yet addressing these issues is crucial for maintaining customer trust.
The Road Ahead
Fisker Inc. is not out of the woods yet. The company’s ability to pull through these tough times will depend on multiple factors:
- Successful Asset Liquidation: Effective management of the $46 million raised from asset sales.
- Cost Management: Continued frugality in operational and employee expenses.
- Customer Trust: Successfully handling recalls and maintaining customer loyalty.
Conclusion
The ultimate sacrifices made by Henrik Fisker and Geeta Gupta-Fisker to keep their company alive serve as a testament to their commitment to the EV industry. Through salary cuts, employee layoffs, and stringent cost-cutting measures, they are doing everything in their power to save what remains of Fisker Inc. While the road ahead is fraught with challenges, their unwavering resolve offers a glimmer of hope for the ailing automaker.
The coming months will be crucial in determining whether these measures will be sufficient to revive Fisker’s fortunes. One thing is certain: the Fiskers are committed to seeing this through, come what may.
