faraday

FF91 image via Faraday Future Facebook page

published on January 8, 2019 - 9:58 AM
Written by David Castellon
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Hundreds of Faraday Future employees laid off in late October have wondered for weeks when — and even if — they would get back to work.

That answer may come by the end of this week, said John S. Lehn, head of government affairs for the startup electric car company in Hanford.

In an interview, he said he expected a plan and schedule for bringing back the workers would be made public by week’s end.

For now, however, he offered no details of what that plan might be, nor did he indicate if it might include a schedule of when workers not laid off but still working on reduced pay might have their full salaries restored.

That news came on the heels of an announcement by Faraday officials last week that they had reached a cease-fire agreement to end legal actions with Season Smart, Ltd., the Chinese finance company that had owned a 45-percent stake in the carmaker.

In late 2017, a company Ever Smart later acquired invested $800 million into Faraday — which at the time had about run out of money — with a commitment to invest $1.2 million more.

That initial investment reportedly was spent by July of last year, much of it to convert a former 1 million-square-foot tire plant in north Hanford into the startups first manufacturing plant.

But Faraday officials claim that Ever Smart failed to pay $700 million more into the auto company by late last year, as promised, while officials for the finance company claimed they had met their commitments to date.

That led to legal action in which Faraday
officials worked to divest Ever Smart of its stake in the company so it could seek new investors as well as possible loans to pay its debt and get the company back on course. The company’s original goal was to start producing its luxury sport utility vehicles early this year.

In the meantime, the dispute left Faraday short of cash, to the point that in legal papers officials stated the company was at risk of going under. All of this prompted the layoffs of a large portion of staff — which late last year was announced at more than 1,000 in Hanford, Gardena and China — though company officials never disclosed the numbers of people laid off and those still working at reduced pay.

The investment conflict appears to be at a close, as Faraday issued a press release last week stating both sides “have entered into a newly agreed upon restructuring agreement. Both parties agreed to terminate the previous investment contract, withdraw and waive all current litigation and arbitration proceedings, and release all security, including the asset preservation pledge and equity financing rights.”

In addition, a lien placed on Faraday’s assets was lifted.

For Faraday, that essentially frees the company to obtain new investors and debt financing, Lehn said.

The statement goes on to say that investors from all over the world have expressed interest in Faraday.

A Jan. 3 posting on Faraday’s Facebook page states, “We’re officially kicking off 2019 with potential investors touring our facility, followed by luxurious and exhilarating ride-and-drives inside.”

Officials have listed the company’s value at $3.25 billion.

Lehn said he didn’t know if any commitments to invest in Faraday had yet been agreed upon, and other officials with the company didn’t respond to interview requests.

Meanwhile the Facebook page states that prototype versions of Faraday’s fledgling car, the FF 91, produced at the Hanford factory, have been out on California roads in recent weeks for field testing.

The company is even asking people who spot the test cars on the roads to notify the company via its Facebook page.


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