Weekend Economists Give Two Thumbs Up for Roger April 5-7, 2013

[Demeter]

14. "Green" car maker Fisker fires 75 percent of workforce

http://news.yahoo.com/green-car-maker-fisker-fires-75-percent-u-193738231--finance.html

Fisker Automotive, the struggling government-backed hybrid sports car maker, on Friday terminated most of its rank-and-file employees in what sources said was a last-ditch effort to conserve cash and stave off a potential bankruptcy filing.

Fisker, which raised $1.2 billion from investors and tapped nearly $200 million in government loans, has "at least" $30 million in cash on hand, according to a source familiar with the company's finances.

About 160 workers were fired at a Friday morning meeting at Fisker's Anaheim, California, headquarters, according to a source who attended the meeting. They were told that the company could not afford to give them severance payments. Fisker confirmed in a statement that it let go about 75 percent of its workforce but did not specify the number of workers affected. It called the move "a necessary strategic step in our efforts to maximize the value of Fisker's core assets."

"Unfortunately we have reached a point where a significant reduction in our workforce has become necessary," Fisker said, adding that it was still searching for a strategic partner.
The mass termination triggered a lawsuit seeking class-action status from angry former employees. A lawyer for the fired employees said he expects the company to file for bankruptcy "sooner rather than later."

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