From “Business Blunders,” a timely and entertaining newsletter by esteemed business writer, editor, and friend, Al Lewis, who has kindly given me permission to republish some of his excellent articles on PSW. ~ Ilene
Fisker the Frisker
An electric car entrepreneur offers a valuable business lesson: If at first you don’t succeed, file, file again
“Fast is fine, but accuracy is everything.” – Wyatt Earp
A cop once clocked renowned auto designer Henrik Fisker at 97 mph on California’s Interstate 5 and wrote him a ticket. Four hours later, another highway patrolman nailed him at 88 mph and asked, “How long since your last ticket?”
“Well, actually, not that long ago,” Fisker replied.
This illustrative slice of Fisker’s life comes from a 2009 Los Angeles Times piece. Today, he’s facing a different question, “How long since your last bankruptcy?”
Fisker, whose first electric car company went belly up in 2013, has once again left his investors, creditors, employees and customers on the side of road.
Why would anybody buy a car from this guy? He already had a history of patting folks down for money and then stiffing them in bankruptcy court.
He’s done it before, and he’s done it again
Flash forward to 2020 and a new company called Fisker went public through one of those low-accountability Special Purpose Acquisition Company, or SPAC, deals – raising billions from unwary investors.
No surprise Fisker filed bankruptcy last week, and this week its lawyers indicated in court that it was headed for liquidation.
Fisker’s first car came off the line about a year ago and by mid-April it had delivered only about 6,400 vehicles. Its market capitalization had once soared to nearly $8 billion with a B. Now it’s nearly down to $8 million with a sagging M.
“We are proud of our achievements, and we have put thousands of Fisker Ocean SUVs in customers’ hands in both North American and Europe,” a Fisker spokesman said in a press release. “But like other companies in the electric vehicle industry, we have faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently.”
Industry struggles are only part of the story. Sure, Lordstown Motors, Proterra and Arrival have also filed bankruptcy, and Canoo and Nikola have been treading water. But check out Rivian. On Tuesday, Rivian announced a $5 billion investment from Volkswagen, sending its stock soaring.
The truth is that Fisker recklessly rushed a car to market. Anyone who invested or loaned money to this company, or purchased an Ocean for $40,000 or $60,000, was ignoring the past.
“This is the Worst Car I’ve Ever Reviewed”
Customers eventually reported sudden loss of braking power, key fobs that locked them in and out of their vehicle, faulty seat sensors, and even a front hood flying open at high speeds. Additionally, the National Highway Traffic Safety Administration began investigating the car’s ability to shift between gears.
Influential car reviewer Marques Brownlee has received more than 5.8 million views on a YouTube report titled: “This is the worst car I’ve ever reviewed.”
In May, Fisker owners in North America received an email saying the 24/7 roadside assistance that came with their warranties would no longer be honored.
(Sorry, Fisker customers, if you thought roadside assistance was of some assurance after spending tens of thousands on an unproven brand. You should have read the fine print giving Fisker the right to cancel it any time. So not only are you dead on the road, but Fisker isn’t coming to pick you up.)
A report in Tech Crunch cited “inadequate customer service, no properly functioning warranty system, and a dearth of spare parts.” These issues came down to the man himself, and his wife, Geeta Gupta-Fisker, who served as both chief operating officer and chief financial officer, TechCrunch reported.
(Hmm. Let’s do the math and see if any of us amateur corporate consultants can spot a possible governance issue: CFO, COO, wife.)
“The lack of processes and procedures was kind of mind-blowing,” Sean O’Grady, a former Fisker regional sales manager, told TechCrunch. “The same excuse that I kept hearing all the time was, well, if you’ve never worked for a startup before, this is what it’s like, it’s chaotic.”
Seductive, not productive
Henrik Fisker is renowned for the sexy BMWs and Aston Martins he designed decades ago. That includes the BMW Z8 roadster and X5 SUV, as well as the Aston Martin DB9 and V8 Vantage. His Ocean SUV is a gem, too, as long as you just want to look at it as it rusts in your driveway.
Here’s why Fisker can’t be trusted to run a startup.
In the 2009 LA Times piece, he bragged about hitting 196 mph on the Autobahn. “A car is one of the last things in our civilized society where we can still control amazing power,” he told the newspaper.
This is a man who insists on moving at a reckless speed.
Al Lewis has written for The Wall Street Journal, Dow Jones, CNBC, Houston Chronicle, Denver Post, Rocky Mountain News, and until recently, The Messenger – one of the biggest blunders in digital media history — you can read My Latest Blunder (The Messenger) here in case you missed it.
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