The new Costa Mesa headquarters of Fisker Automotive and Technologies Group LLC is buzzing with optimism under a new management team that has a track record of successful turnarounds to go with financial backing from one of China’s wealthiest entrepreneurs.
A recent hiring push has brought more than 100 engineers to the brand’s nearly 79,000-square-foot home on Airway Avenue. Another 100 skilled workers—mostly engineers and technicians—are expected in the next three months in preparation for the relaunch of the brand’s luxury hybrid Karma.
The enthusiastic vibe inside the winding, two-story building couldn’t be further from the death spiral that overtook the company for months before it was acquired out of bankruptcy for $149.2 million in cash by Wanxiang America Corp.
Wanxiang America is a unit of Elgin, Ill.-based Wanxiang Group Corp., one of the largest auto parts makers in China.
Wanxiang (pronounced Wahn-shung) runs a diversified portfolio of independent business units specializing in automotive components, agriculture and fisheries, food and beverage, real estate development, and natural resources, among others. The various businesses generate more than $20 billion in annual sales.
Wanxiang Chairman and founder Lu Guanqiu is a self-made billionaire who got his start repairing bicycles as a teenager and making farming tools from scrapped metals during China’s Cultural Revolution in the mid 1960s.
“He literally funds everything himself,” said Fisker President Roger Brown, who was handpicked to run the company by Pin Ni, who is Guanqiu’s son-in-law and the head of Wanxiang America.
Brown, who heads Summit Strategic Investments LLC in Brentwood, Tenn., is a turnaround specialist with a lengthy winning streak that includes the 2004 sale of Anaheim-based All-Style Apparel to Ennis Corp. for $242 million.
“I have done 48 acquisitions—it’s a decent track record,” Brown said.
Brown acquired Bedford, N.H.-based Segway Inc., which makes two-wheeled electric vehicles, on undisclosed terms last year.
He inherited a battered company in Fisker, which had 23 weary employees at the time and faced a litany of lawsuits, frustrated customers, and a bruised reputation.
The checkered history did not bother him.
“I know how to take a bad company and make it a good company,” said Brown, the son of a U.S. Army veteran and Vietnamese immigrant who speaks in a deep Southern accent that reflects his upbringing in Florence, Ala.
His turnaround skills will be tested at Fisker, which took its lumps in the media, the auto industry, and on Capitol Hill the past few years when it burned through more than $1 billion in venture capital funding and government loans.
Fisker’s $100,000 Karma has generally received critical acclaim for its elegant and sporty design created by founders Henrik Fisker and Bernhard Koehler. The company struggled with production from the onset, though, and only about 2,000 are on the roads today.
Fisker resigned from the company in March 2013.
Brown has big changes planned for Fisker, including a likely name change.
The automaker has already informed contractor Valmet Automotive Inc. that it intends to shift production of the Karma and other models to the U.S. from Finland.
Brown recently lured industry veterans James Taylor from Detroit and Brent Wouters from Atlanta to find a location for a low-volume production plant and change the culture of a company that had been at the mercy of its suppliers.
Taylor, the former president of Cadillac, helped turn around the luxury brand during a 20-year stint at General Motors Co. Wouters, an operations guru, led turnaround efforts at Cirrus Aircraft, growing revenue from $48 million to $365 million over six years that led to the Duluth, Minn.-based aircraft manufacturer’s $210 million sale in 2011 to China Aviation Industry General Aircraft.
The front-runners for the plant include Texas, Tennessee and Delaware, where Wanxiang acquired a 3.2 million-square-foot assembly plant in Wilmington as part of the Fisker buy. California lags based on high regulatory hurdles.
The decision on the plant, which would produce about 3,000 units of four or five models annually, is expected in the next month or so.
“We’re going to make a decision really quickly,” Wouters said during a recent tour of Fisker’s headquarters, which features a showroom, testing labs, machine shops, open-floor engineering wings, and general office space. “I want to be in the building by February 1.”
Brown and Wanxiang’s ultimate goals are even loftier.
“We’re going to make investments of more than $1 billion in the U.S. to create manufacturing facilities with 6,000 to 7,000 jobs,” Brown said. “By the end of 2020, we want to be doing 100,000 cars a year.”
Fisker plans to launch the Karma late next year or in early 2016. Production of the planned Atlantic model, a hybrid four-cylinder that would sell for at about $60,000, would follow in a high-volume plant. A new model, dubbed “the P,” is in development. Production of the P, which aims to take on the Nissan Leaf and Chevy Volt, is headed by Koehler, now director of Europe and Middle East operations. That model will be released in China first, then Europe, and finally the U.S., according to Brown.
The company is bringing everything in-house, from developing its own software and hybrid drive trains to power inverters.
“We’re going to make our own … car, which is a huge paradigm shift,” Brown said.
The new Fisker has an extended lease on life, without debt, looming government production deadlines, or Silicon Valley backers pushing the company to meet quarterly benchmarks. Wanxiang is positioning Fisker for the long haul in a bid to rival Tesla Motors Inc.
“They have a different philosophy,” Brown said. “We’re not running a sprint; we’re running a marathon.”
