Illustration for article titled Karma Was Reportedly Considering Chapter 11: Sources UPDATED

You may recall the last time we talked about Karma, the company that was started to keep building and trying to sell the old striking-looking but kinda crappy Fisker Karma, they weren’t doing so hot. There were layoffs, accusations of poor management, and prototypes that were allegedly just “movie props.” It does not seem like things have been getting better, as multiple sources inside the company have revealed to Jalopnik that, in addition to further layoffs, executives at Karma were considering Chapter 11 bankruptcy.

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After the original story in April, I received a lot of feedback from Karma employees, current and former, confirming what our sources inside the company had told us. Karma themselves also sent a letter out to their employees regarding the story:

Illustration for article titled Karma Was Reportedly Considering Chapter 11: Sources UPDATED
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Along with this, Karma extended an invitation to visit Karma’s facilities in California (after quarantine and all that, I assume) and see for myself how things are progressing.

I’m not sure I should hold my breath for that visit, though. Since the article ran, COO Kevin Pavlov was forced out of the company, and showing me their autonomous vehicle progress might prove tricky, as Srini Gowda, Karma’s VP of Autonomous Driving, left immediately afterwards. Just to keep it exciting, so did the director of Karma’s safety program.

Additionally, more workers (about 15) were furloughed in mid-May, and our source reports that Karma was considering a plan to pare down to 38 employees and file for Chapter 11. Karma, through its attorneys, has denied that it was considering a plan to reduce its staff to 38 employees in contemplation of filing for bankruptcy.

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Also, due to poor work quality from technicians formerly of BMW and described as “cocky” and “talking so much shit” by one of our sources, Karma’s Dodge-based Level 4 Autonomous demonstrator van has been deemed to be a “major safety hazard” and has been pulled from all testing duties.

Through its attorneys, Karma denies that its Dodge-based Level 4 Autonomous demonstrator van has been deemed a “major safety hazard” and has been pulled from all testing duties. They reiterated their offer for Jalopnik to come visit their operations — an offer that Jalopnik has not yet accepted given the ongoing pandemic.

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The amount of responses I got from insiders at Karma have described an alarming litany of abuses, from poor treatment of employees to poor quality workmanship to outright deception and even a fruit fly problem in their cafeteria.

But hey, I’m still up to check out what you’re working on, if you’re still here, Karma!

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We have reached out to Karma for comment and will update if we hear anything.

UPDATE Sunday, June 28: Though we did not receive any comment from Karma prior to publication, on Thursday, June 25, an attorney for Karma wrote to Jalopnik denying that Karma had been considering Chapter 11, denying that it would be paring its staff to 38 employees in contemplation of a bankruptcy filing and denying that Karma’s Autonomous Demonstrator van was pulled from testing duties for safety reasons. Jalopnik stands by its reporting but has updated the story to reflect new information and the responses provided by Karma’s attorneys.

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In addition, sources tell Jalopnik that following publication of this story, the Wanxiang Group, the Chinese company funding Karma, appears to have been convinced to continue to provide funding for the company leading Karma to forego consideration of bankruptcy.

Senior Editor, Jalopnik • Running: 1973 VW Beetle, 2006 Scion xB, 1990 Nissan Pao, 1991 Yugo GV Plus, 2020 Changli EV • Not-so-running: 1973 Reliant Scimitar, 1977 Dodge Tioga RV (also, buy my book!)

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