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Nick Sampson, Faraday Future’s former senior vice president of product research & development, introduces the FF91 electric car during a news conference at CES International in January 2017 in Las Vegas. He left the company on Oct. 30. (AP Photo/Jae C. Hong)
Faraday Future, once positioned as a potential Tesla challenger, confirmed the departure of two of its cofounders, Global Product and Technology Senior Vice President Peter Savagian and Senior Vice President of Product Strategy Nick Sampson, along with several other emergency cost-cutting strategies the financially beleaguered company implemented while it seeks additional funding to bring its FF91 electric vehicle to production.
"This was an extremely tough decision to make, and we recognize the emotional stress and financial strain this puts on people’s personal lives," the company said in an emailed statement. "We are grateful to all of the hundreds of employees who are willing to stay and continue to work on the FF 91 core project, as well as those who will be on a temporary furlough. In addition, we take our relationship with our suppliers seriously, and we hope to receive support and understanding from our global partners as FF overcomes our difficulties."
Last week the company announced that it had received a favorable ruling in its application for emergency relief against investor Evergrande Health Industry Group Ltd. filed in the Hong Kong International Arbitration Centre. Faraday Futures argued that Evergrande breached its funding obligations, and its attempts to prevent the company from obtaining other investments or financing caused a significant cash shortfall. As a result, the company was forced to take emergency measures, including layoffs, unpaid furloughs and salary cuts.
Bu those payroll reductions didn’t cut deeply enough into the company’s expenses, and an email from Sampson obtained by The Verge said the company is "effectively insolvent in both its financial and personnel assets, it will at best will [sic] limp along for the foreseeable future," the tech news site reported.
Faraday Future’s statement explained that certain employees will be required to take an unpaid leave of absence for November and December, and any employees hired after May 1 must also take a furlough. All employees hired before that date can continue to work for the company, but at a reduced salary, which The Verge reports is a maximum of $50,0000 per year, according to current and former employees, while hourly workers are limited to minimum wage. However, all employees that health care benefits will continue for all employees enrolled in its health insurance plan. The company says it anticipates the furlough will last through the end of December 2018, although that is dependent on securing additional funding from global investors.
Faraday Future CEO YT Jia speaks during the unveiling of Faraday Future’s FF91 electric car at CES International Tuesday, January 2017 in Las Vegas. (AP Photo/Jae C. Hong)
Its arbitration ruling allows the company to seek up to $500 million in new investment money subject to Evergrande’s approval, according to The Verge. The company noted in last week’s statement that its first FF 91 pre-production vehicle was presented to its employees ahead of schedule on August 28 and that it was just a few steps away from delivering the vehicles to its paid reservation holders in 2019, built at its Hanford, California factory. To date, no vehicles have been delivered to customers.
In June, the financially troubled company appeared to have secured a degree of stability when the U.S. Treasury Department approved its much-needed $2 billion funding deal with Evergrande.
Evergrande Health Industry Group, a Hong Kong-based unit of Chinese billionaire Hui Ka Yan’s Evergrande Group, acquired a controlling 45% stake in Faraday Future for about $860 million (HK$6.75 billion) through the transfer of the Season Smart Limited partnership created last year to aid Faraday, Evergrande said in a June 25 Hong Kong Stock Exchange filing. Faraday’s original investors retain a combined 33% stake, with the remaining 22% of company equity to be distributed to employees as part of an incentive program, according to the filing.
After a splashy demonstration of its flagship FF 91 model at CES 2017 in Las Vegas, a cash shortage forced Faraday to mothball a $1 billion, 3 million-square-foot auto-assembly plant in Nevada.
Now it appears to be in even tougher straits.
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Nick Sampson, Faraday Future’s former senior vice president of product research & development, introduces the FF91 electric car during a news conference at CES International in January 2017 in Las Vegas. He left the company on Oct. 30. (AP Photo/Jae C. Hong)
Faraday Future, once positioned as a potential Tesla challenger, confirmed the departure of two of its cofounders, Global Product and Technology Senior Vice President Peter Savagian and Senior Vice President of Product Strategy Nick Sampson, along with several other emergency cost-cutting strategies the financially beleaguered company implemented while it seeks additional funding to bring its FF91 electric vehicle to production.
“This was an extremely tough decision to make, and we recognize the emotional stress and financial strain this puts on people’s personal lives,” the company said in an emailed statement. “We are grateful to all of the hundreds of employees who are willing to stay and continue to work on the FF 91 core project, as well as those who will be on a temporary furlough. In addition, we take our relationship with our suppliers seriously, and we hope to receive support and understanding from our global partners as FF overcomes our difficulties.”
Last week the company announced that it had received a favorable ruling in its application for emergency relief against investor Evergrande Health Industry Group Ltd. filed in the Hong Kong International Arbitration Centre. Faraday Futures argued that Evergrande breached its funding obligations, and its attempts to prevent the company from obtaining other investments or financing caused a significant cash shortfall. As a result, the company was forced to take emergency measures, including layoffs, unpaid furloughs and salary cuts.
Bu those payroll reductions didn’t cut deeply enough into the company’s expenses, and an email from Sampson obtained by The Verge said the company is “effectively insolvent in both its financial and personnel assets, it will at best will [sic] limp along for the foreseeable future,” the tech news site reported.
Faraday Future’s statement explained that certain employees will be required to take an unpaid leave of absence for November and December, and any employees hired after May 1 must also take a furlough. All employees hired before that date can continue to work for the company, but at a reduced salary, which The Verge reports is a maximum of $50,0000 per year, according to current and former employees, while hourly workers are limited to minimum wage. However, all employees that health care benefits will continue for all employees enrolled in its health insurance plan. The company says it anticipates the furlough will last through the end of December 2018, although that is dependent on securing additional funding from global investors.
Faraday Future CEO YT Jia speaks during the unveiling of Faraday Future’s FF91 electric car at CES International Tuesday, January 2017 in Las Vegas. (AP Photo/Jae C. Hong)
Its arbitration ruling allows the company to seek up to $500 million in new investment money subject to Evergrande’s approval, according to The Verge. The company noted in last week’s statement that its first FF 91 pre-production vehicle was presented to its employees ahead of schedule on August 28 and that it was just a few steps away from delivering the vehicles to its paid reservation holders in 2019, built at its Hanford, California factory. To date, no vehicles have been delivered to customers.
In June, the financially troubled company appeared to have secured a degree of stability when the U.S. Treasury Department approved its much-needed $2 billion funding deal with Evergrande.
Evergrande Health Industry Group, a Hong Kong-based unit of Chinese billionaire Hui Ka Yan’s Evergrande Group, acquired a controlling 45% stake in Faraday Future for about $860 million (HK$6.75 billion) through the transfer of the Season Smart Limited partnership created last year to aid Faraday, Evergrande said in a June 25 Hong Kong Stock Exchange filing. Faraday’s original investors retain a combined 33% stake, with the remaining 22% of company equity to be distributed to employees as part of an incentive program, according to the filing.
After a splashy demonstration of its flagship FF 91 model at CES 2017 in Las Vegas, a cash shortage forced Faraday to mothball a $1 billion, 3 million-square-foot auto-assembly plant in Nevada.
Now it appears to be in even tougher straits.
