Fisker Should Not Tarnish Magna’s Reputation
By Edward A. Sanchez — June 28, 2024
As Phil Royle and I discussed in Episode 176 of The Watt Car Podcast, Fisker Inc.’s bankruptcy is now official. Although it is nominally Chapter 11 (reorganization) rather than Chapter 7 (liquidation), I have a hard time believing anyone would be interested in picking up what remains wholesale. Certain IP, branding and some other assets may have interest to some companies, but Henrik’s “asset-light” approach means there’s not much “there, there” in the first place.
The Potemkin Village façade surrounding Fisker has crumbled away, and the depth of mismanagement and lack of organization or sound strategy at the company is being fully laid bare. Many well-deserved criticisms could be leveled against Fisker Inc., its eponymous founder and CEO, Henrik, and his wife Geeta Gupta-Fisker. Now that the full extent of the dysfunction at the company has come to light, I do feel somewhat sheepish in my defense of Henrik I wrote last month.
But the one decision I can’t fault Fisker on is the choice of Magna as the contract manufacturer for the Ocean. Magna is a world-class company, being a leading automotive Tier-1 supplier, as well as being regarded as the world’s leading automotive contract manufacturer. As I’ve discussed before, Magna’s portfolio of past and present vehicles is impressive indeed. Among them is the Mercedes-Benz G-Class, which Magna has been building continuously since 1979, the Jaguar E-Pace and I-Pace, the BMW Z4, and the fifth-generation Toyota Supra. While the company’s role varied somewhat on each of these projects, from primarily manufacturing, to ground-up design and engineering, Magna was the natural and easy choice to build the Ocean.
If Magna could be faulted for anything, its possibly due diligence on Fisker’s financials and backing, which as we’ve come to find out, were much shakier and tenuous than many thought. Even taking away from some of the hiccups on the Ocean, which could probably be attributed to a rushed development timeline, and likely urging from Magna itself to “give it more time” to validate software, hardware, and reliability, the shortcomings on the Fisker Ocean and the company fall squarely in the laps of Henrik, Geeta, and the Fisker Inc. board.
I don’t doubt Henrik was under tremendous pressure from investors to get a saleable product on the road, and they were likely getting impatient with his pleas of “I need more time.” At some point, a decision was likely made to “send it” with Ocean shipments, warts and all.
Looking back, we can see how things went with that strategy. I personally have no ill will or axe to grind against Henrik or Geeta, but based on reports, there are plenty in the automotive industry that do, Magna included. I feel badly that Magna ended up holding the bag on the Ocean, and suffered financial and some peripheral reputational damage with this venture. But I have confidence in Magna as a company, and don’t feel their venture with the Ocean should be a permanent scarlet letter on their reputation.
However, I wouldn’t blame Magna management for saying “no” to some prospective contract manufacturing business in the future without more thorough vetting of the company, investors, and business plan.
(Image courtesy Fisker)
