A123 Systems has had to lay off 125 employees at two Michigan locations because of Fisker's lengthy delay getting the Karma luxury plug-in hybrid to market. That's the bad news. The potentially good news is that the layoffs may be temporary. Even though Fisker has reduced its 2011 Karma orders to 1,500 units from 7,000, once Fisker is back on track to reach its stated goal of selling 15,000 vehicles in 2012, the workers may be called back in six months of less. Jason Forcier, vice president and general manager of automotive solutions at A123, told Crains Detroit that, "We're basically aligning our workforce with that reduction in orders from Fisker. We had to take some action to get our costs in line, but we believe it to be temporary, and we'll bring those people back as Fisker works through some inventory."
A123 has lithium-ion battery contracts with over 20 transportation-related companies (details here), so a setback at one doesn't imply a serious problem for the whole company. Still, big news events like the NHTSA Chevy Volt fire can hurt the plug-in vehicle industry – and A123 does have a contract with General Motors to co-develop lithium-ion batteries for upcoming electric vehicles.