In what might be a sign of the beginning of the end, the Austrian unit of Fisker has filed for reorganization. The latest move in Fisker’s struggle for survival has impacted its contract manufacturer, Magna Steyr, which is cutting 500 jobs.
Fisker has sought protection from its creditors after pausing the production of its only car, the Ocean SUV. It has applied for reorganization for the Austrian arm of its business, the equivalent of a Chapter 11 procedure in the US.
In a statement, Fisker explained why the step has become necessary. “By filing to open a restructuring proceeding via self-administration, Fisker Austria gains breathing room to protect its business while it conducts a value-maximizing strategic transaction or other sale of assets. Under court protection, the entity will continue to pay its employees and sell and service vehicles. Fisker’s entities outside Austria are not included in this restructuring proceeding.
“Fisker continues to diligently explore all available options to maximize the value of its global business.”
Fisker stressed that the Austrian unit primarily exists to manage its contract with Magna Steyr. However, the latter has announced it would part ways with 500 workers attached to its Graz plants, partially impacted by the halt of production of the Ocean SUV.
Magna forecast in its latest earnings report that the Fisker Ocean’s production would not resume. About 10,000 units of the SUV rolled off production lines in Graz last year, but Fisker failed to deliver more than half of them. It has warned bankruptcy is a possibility without new investments.
