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Fisker Automotive denies charges the Karma was rushed to production

Fisker Automotive has released a press release denying allegations that the company rushed the Fisker Karma into production in an attempt to meet Department of Energy loan milestones.

Fisker Automotive is denying last weeks report that delivery of the Fisker Karma was rushed in an attempt to meet deadlines in the Dept of Energy loan program. Because Fisker missed milestones required by the Dept of Energy loan program, the Department has frozen the loans to Fisker, causing ripple effects to both Fisker and A123 Systems. Fisker says that last weeks report by GigaOM was false and misleading.

A week ago Coda Automotive held an event that formerly launched production of Coda's electric car. The day after the Coda launch, Katie Fehrenbacher, writing on GigaOM's Earth2Tech blog, reported a story she sourced from an unnamed Coda employee, who claimed to be a former Fisker Automotive employee, that Fisker had rushed the production launch of the Fisker Karma. The purpose of rushing to production was said to be an attempt to meet Dept of Energy loan program milestones. The GigaOM report implied that perhaps the quality issues around the Karma might be attributed to Fisker having rushed to production.

Because Fisker Automotive has missed milestones required by the Dept of Energy loan program, the Department froze Fiskers loans. In turn Fisker has laid off a few workers and frozen work to retool the former-GM plant in Delaware that Fisker plans to use in manufacturing the Fisker Nina. Additionally A123 Systems is having its own troubles, not only because Fisker's orders for battery packs slowed down, but because of battery pack flaws found by Fiskers quality team, A123 has had high warranty expenses due to replacing battery packs.

Fisker has issued a press release saying the "allegations are absolutely untrue" that Fisker rushed the Karma into production, and that the "false and misleading statements and allegations" are "having a negative impact on Fisker."

That press release goes on to reference a San Francisco Chronicle article, that also reported on the Coda Automotive production launch event, and naming "John Hoffman, store manager for Coda of Silicon Valley" as having formerly worked for the Fisker of Marin County dealership. Hoffman is quoted saying that the Karma's delivered to his store were prone to software glitches, and that four out of five Karma's developed problems immediately. Fisker notes that Hoffman was never employed by Fisker, but by a Fisker dealership, and we can also note he wasn't employed by Coda Automotive, but instead by the Del Grande Dealership Group (DGDG) who operates the Coda Silicon Valley dealership. The press release closes saying the company is ready to take legal action and are contacting Mr. Hoffman and the Coda Silicon Valley dealership to get them to set the record straight.

Fisker Automotive's press release was crystal clear, that the allegation is untrue. No matter how much of a ring of "maybe" there is to the allegation, it is clear that Fisker denies any truth to it. The allegation is causing damage to Fisker, damage that's acting to undermine the company's credibility.

One thing I personally can verify is that, at Coda Automotive's appearance at the Golden Gate Electric Auto Association (GGEVA) two weeks ago, I spoke with a former employee of Fisker of Marin County who told a similar story. I did not catch his name, but did learn he was (at that time) employed by DGDG to work in the Coda of Silicon Valley store. It's likely this man was the same person who spoke with the GigaOM and SF Chronicle reporters at the Coda production launch event, however I did not personally speak with him at that event. This means that GigaOM and the Chronicle are likely reporting correctly what their source said.

However, just because a former employee of a Fisker dealership says something about Fisker, is it true? As Fisker's press release notes, Mr. Hoffman, as an employee of a dealership, would not have been "privy to any business information from Fisker concerning the development of the Karma sedan and/or Fisker’s financing". However, in the court of public opinion it often occurs that false and misleading allegations still cast enough doubt to cause damage. What's important is the "damage control" steps Fisker Automotive takes in the coming weeks.