Fisker Insinuates Customer to Blame for Karma Fire

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Fisker logoFisker Automotive has implied that the Texas owner of one of its Karma models committed “fraud” or “malicious intent” in blaming the luxury electric vehicle for his garage fire last week, after he had to rescue his wife, mother and child from flames that spread quickly to his house.

The company’s claim could be a fatal public relations move, as the chief investigator in Fort Bend County Fire Marshal’s Office, Robert Baker, has also blamed the fire on the Karma. Fisker, recipient of $193 million (out of a $529 million total guarantee) loan backed by taxpayers via the Department of Energy, has suffered a series of publicity blunders including two recalls, a Karma breakdown at Consumer Reports’ test facility, a SEC investigation of its primary venture capital raisers, layoffs, and a cutoff of its loan by DOE.

According to a report by Autoweek, the fire started shortly after the owner, Jeremy Gutierrez, parked the Karma in his garage. Gutierrez left the vehicle, which he had purchased in April, without plugging it in. Within minutes he reportedly smelled burning rubber. 

“Yes, the Karma was the origin of the fire, but what exactly caused that we don’t know at this time,” said Baker, adding, “This looks just like golf cart fires we have down here.” Apparently the Houston area has several each year.

Nevertheless, Fisker provided a statement to Autoweek that suggested fireworks or an electrical panel as possible fire sources, but also cast aspersions on Gutierrez.

“As of now, multiple insurance investigators are involved, and we have not ruled out possible fraud or malicious intent,” the statement said. “Based on initial observations and inspections, the Karma’s lithium ion battery pack was not being charged at the time and is still intact and does not appear to have been a contributing factor in this incident.”

Gutierrez, in addition to endangerment of the lives of his loved ones, suffered the loss of two other vehicles in the garage – an Acura NSX and Mercedes Benz SUV – plus the destruction to his home (photos at link). Baker, who ruled the fire was accidental, estimated the damage at $100,000 (not including the two other vehicles) – but the Karma alone cost more than that. Gutierrez, clearly angered, issued his own statement through his lawyers, which revealed the remarkable response by Fisker:

Since the date of this incident, Mr. Gutierrez has been fully cooperative with public safety officials, as well as insurance adjusters and the vehicle manufacturer’s investigators. In fact, Mr. Gutierrez fully accommodated the precise and somewhat peculiar demands of Fisker Automotive, who sent their self-proclaimed “SWAT Team” of engineers and inspectors (that included their own forensic cause and origin investigator) to the Gutierrez home within 24 hours of the fire. They descended upon the Gutierrez home in alarming numbers and immediately demanded a 24-hour lock-down of his home, including the remains of the Fisker Karma vehicle. They also cordoned off portions of the Gutierrez home with non-transparent tarps to block the view from the public. Fisker even had access to eyewitnesses, who were interviewed by Fisker investigators and those investigators were shown video footage of the Fisker vehicle on fire before and other part of the garage….

Despite the fact public safety and law enforcement officials have determined Mr. Gutierrez’s home and vehicles are not a crime scene, Fisker Automotive released a public statement on May 8, 2012 implying fraud or malicious intent were open questions. The family is stunned by this implication. The Gutierrez family has afforded every accommodation to Fisker and access to all evidence that public safety and law enforcement official examined. Fisker’s statement is a grave disappointment, especially in light of the damages the family suffered and continues to suffer.

As for Baker, he said, “I’ve worked homicide scenes with less secrecy.”

Fisker seems especially concerned that the Karma’s lithium ion battery – manufactured by equally troubled A123 Systems – was not blamed for the fire. The company’s first recall followed problems with hose clamps on the batteries, and the second recall followed the Consumer Reports fiasco, which affected other A123 customers also. And then last month another A123 battery emitted chemical gases that caused an explosion at a General Motors research facility.

But that doesn’t mean another part of the car didn’t cause the fire, or that the battery wasn’t the culprit. Gutierrez reported he smelled burning rubber. And in the GM case, reports said emissions from the battery caused the explosion – not that the battery burned or exploded itself. Lithium ion batteries are known to overheat, and the problem of "thermal runaway" apparently has not been solved yet.

Regardless of the cause, the panicky response by Fisker is telling. The home invasion by its inspectors and assumption of control of the scene and investigation indicate anticipation of a PR disaster, a lawsuit, or both. That the automaker sent its own forensic cause investigator shows they are prepared to spin evidence in their favor.

As for the implication that Gutierrez might bear malicious responsibility for the incident, as Ronnie Schreiber of Cars in Depth wrote, “That goes well beyond playing defense. Fisker is either confident that foul play was involved or desperate enough over the company’s possible exposure to not care about getting sued for defamation.” 

Fisker does appear increasingly desperate. Cut off by DOE, the company had to suspend plans to produce its less pricey Atlantic sedan in Delaware, shutting down renovation activity at an old GM plant. Its capital fundraisers at Chicago-based Advanced Equities, who have been accused of “foisting junky startups on investors,” are under investigation by the SEC. Its politically connected Silicon Valley backers at Kleiner, Perkins, Caufield and Byers can’t be happy about the negative developments with their big investment, either.

And the fiasco of a Karma purchased by Consumer Reports becoming “undriveable before it has finished our check-in process” cannot be underestimated. If there is any customer you don’t want to have your product totally fail for, it’s CR.

So as a result Fisker has attempted to cloud the circumstances surrounding the Karma fire, stating, “There are conflicting reports and uncertainty surrounding this particular incident.”

The only conflict and uncertainty regarding the fire in Sugar Land, Texas, are the spin and doubt cast by Fisker itself. Baker, the public investigator in charge, was definitive about the fire’s source.

How much more evidence do we need that Recovery Act “green” stimulus, administered by President Obama’s Energy Secretary Steven Chu, is a massive failure? Fisker encapsulates it all: Unproven technology, owned by administration cronies, mismanaged, financed by suspected shady figures, with vehicles manufactured for rich people who use it only as a third or fourth toy vehicle. Now, in the case of the Gutierrezes, it has torched the cars they actually need – and their home too.

After blaming one of its precious few customers, if Fisker doesn't have proof to overturn the conclusions of an experienced fire investigator, it is sunk.

Paul Chesser is an associate fellow for the National Legal and Policy Center.