faraday future

Stefan Krause poses by Faraday Future's all-electric car, the FF91, during a visit to Hanford in August. Photo by David Castellon

published on November 13, 2017 - 4:05 PM
Written by David Castellon

Despite Faraday Future’s announcement that it fired its chief financial and technology officers, some Kings County officials aren’t worried those actions might curtail plans to build a car factory in Hanford.

“They’re a startup company and need to raise a lot of money,” said Kings County Supervisor Craig Pederson, whose district includes Hanford, where Faraday earlier this year leased the former Pirelli Tire plant to convert the million-square-foot facility into the fledgling electric car company’s first manufacturing plant.

As such a potentially big startup, some serious ups and downs are expected, Pederson said Monday after getting the news of Faraday’s surprise announcement that it had fired CFO Stefan Krause and Chief Technology Officer Ulrich Kranz.

A former BMW and Deutsch Bank executive, Krause was brought into Faraday in March, reportedly to reel in investors. And with nobody in the CEO’s seat, he had essentially been the face of the company.

But the unexpected firing of Krause took a more unexpected twist, as the company’s announcement on Friday went into the reasons behind the action.

“Stefan Krause’s possible violation of law and lack of contribution to FF’s goals over the course of his leadership since March has led to severe damages to the interests of FF and its investors. FF is currently taking legal actions as a result of Stefan Krause’s malfeasance and dereliction of duty,” it states, without offering specifics on the reasons behind the claims.

“Terminating the employment of Stefan Krause was a result of his actions in hindering FF’s fundraising efforts. FF will continue our full efforts in expediting the fundraising process,” the release continues.

Pascal Coustar, Faraday’s senior director of accounting and finance, has been appointed acting CFO.

The Faraday release goes on to say Kranz, appointed chief technology officer just three months ago, also had been fired, but offers no reason for the action.

But Faraday Future’s claims about Krause being fired are being challenged, with Jalopnik, a web news service following the auto and car-racing industries, stating in an article posted on Friday, “The saga of would-be world-beater electric car startup Faraday Future got weirder than usual this week,” as the startup’s announcement about the firing came not long after the news service posted an article in which Krause claimed he had resigned as CFO back on Oct. 14.

Krause couldn’t be reached immediately by The Business Journal, but China Money Network posted a statement it claims came from Krause, in which he states of his former employer that “The company’s statement inaccurately portrays the circumstances surrounding my departure, and includes baseless and defamatory statements about me and my contributions to the company.

“I have retained legal counsel and will be exploring all options available to me.”

Jalopnik reports that after posting its article stating Krause’s claim, “Hours later, Faraday’s main financier — Chinese tech entrepreneur Jia Yueting — told employees in an internal email that it was planning to go public with a statement that announced the ‘termination’ of Krause.”

Whatever the truth is, China Money Network reports, “The news could further erode investor confidence and reduce the chance for the company to raise much-needed capital to maintain its operations.”

Faraday already had been under financial scrutiny after scrapping plans earlier this year to build a larger, $1 billion manufacturing plant in Nevada, instead taking the less-expensive option of leasing the empty Hanford plant and converting it into a car plant.

Faraday Future, the once-hyped Tesla competitor, appears to be going through another rough patch after repeated scaling downs of its manufacturing targets and facilities following funding issues that cropped up this spring. Now, a string of high-profile departures points to more turmoil at the company,” states a recent article on AutoWeek magazine’s website.

Pederson, who had just learned Monday of Faraday Future’s press release and hadn’t read related news reports, said the upheaval at the company didn’t raise concerns for him that Faraday might not be able to go forward with its plans to set up shop in Hanford and start building cars next year.

“Their board made a decision on Mr. Krause and decided to move on,” he said of Faraday. “The truth is, it’s a startup company and it will either be here or it won’t.”

In addition, Pederson said it might be a good thing that the shakeup at the top occurred now, “before they start here and hire local people.

“In a company that size, there are going to be a lot of bumps and bruises trying to start up.”

Hanford City Councilman Francisco Ramirez seemed equally unfazed.

“I met Stefan. He’s a great guy. I’m highly optimistic Faraday Future will keep going forward, despite Stefan stepping down,” he said, noting that Faraday officials acted as if their plans haven’t changed during an appearance by company officials a couple of weeks ago in Hanford to announce they’re ready to partner up with local manufacturers and service providers, as well as to start looking for new hires.

“From all I’ve seen, Faraday Future is still moving forward to develop in Hanford.”

e-Newsletter Signup

Our weekly poll

Does the $2 trillion federal relief package go far enough to help Americans, economy?

Loading ... Loading ...

Central Valley Biz Blogs