Writing on Wired’s Autopia blog Daryl Siry is reporting (on Nov 15) that over the weekend a management shakeup occurred at Aptera resulting in the ouster of two company founders and the firing of many people. The move is apparently aimed at preserving capital, slow down the burn rate while waiting for approval for an expected DoE loan. Clearly when a company ousts senior management there is likely another story about strategic or tactical disagreements, as Siry’s article describes. Daryl Siry is the former marketing chief at Tesla with years of experience in the entrepreneurial startup company climate. His reporting appears to be based on discussion with sources inside Aptera and tracking chatter on a discussion forum. While Aptera has not made an announcement of their own, a Popular Mechanics article tells a different story.
Disagreements resulting in ousters of company founders is nothing new in the entrepreneurial startup company climate. In the case of Aptera in 2008 they hired Paul Wilbur, a longtime industry veteran, as president and CEO, and Marques McCammon as Chief Marketing Officer. Their hiring occurred shortly after Aptera’s last round of financing, $24 million, in July 2008 which saw Google.org and other companies make investments. Both Wilbur and McCammon come from the car industry which have a different engineering style than is typical in high tech startups where there is an emphasis on releasing a product early and rapidly iterating the design based on customer feedback. Siry claims this sort of culture clash is behind the ouster.
In Jan 2009, Aptera announced a production delay from the originally planned “end of 2008”. The delayed production date of October 2009 has now come and gone without deliveries to customers. In a Jan 2009 letter to customers Aptera cited a customer survey which showed several required design changes that prompted the production delay.
The production delay, according to Siry’s report, led to a series of financial consequences. By not delivering vehicles to customers Aptera was unable to recognize any of the income originally expected from the shipments which were to begin in late 2008. That coupled with the difficult financial climate since late 2008 made it difficult to find further financing. As reported earlier Aptera sought money from a DOE loan program but was ineligible due to it being a three wheel vehicle, not four wheels as required to be legally an “automobile”. In Oct 2009 a law was passed and signed by Pres. Obama making two- and three-wheeled EV’s eligible for this DoE loan program.
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Siry’s report claims that as Aptera’s capital dwindled tensions rose within the company and two plans were developed. One by Wilbur, the CEO, would slash the workforce to a skeleton until (if) the DoE loan were to come through. The other, by the founders Fambro and Anthony, would instead begin production and delivery of the vehicle as it currently stood. A boardroom showdown rejected the founders’ “ship it now” plan resulting in the ousters.
The Popular Mechanics report says that while some Aptera employees have been “let go”, neither of the founders have been ousted. Instead Steve Fambro is taking some much needed vacation time and is expected to return to work next year, and Chris Anthony is said to be busy as CEO of Flux Power and has had a part time involvement with Aptera for awhile. Their report quotes Steve Fambro saying “I can say that Paul Wilbur’s leadership and Tom Reichenbach’s talent (VP of engineering), the changes that they’ve made to the vehicle are spot on. Anyone can armchair quarterback, but the changes have made the vehicle better—it’s better handling and more comfortable.”
The DoE loan program is the Advanced Technology Vehicle Manufacturing Program. Among the loans granted under that program is nearly $1 billion to Tesla Motors and Fisker Automotive. However neither Tesla nor Fisker has actually seen a dime, yet, from the loan programs. As noted in my earlier reporting (see Fisker, the vast rightwing conspiracy, and the $528 Mil DOE loan) the loan process is not one where the DoE simply writes a check and says “good luck”. Instead the money is granted in phases as recipients meet certain conditions of developing their business, establishing factories and showrooms, etc. The conditions in the loans are geared to incentivize creation of a real car company, not simply being a handout. If Aptera were be accepted into the same program they would likely have similar conditions to meet.
More on the trouble at Aptera, cash may be running out
Aptera Founders Ousted in Showdown With Auto Vets: Report
Aptera acknowledges production delays, major changes
Door Opens for Aptera, 3-Wheelers to Grab DOE Green Car Funds
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