Karma Automotive restructures to cut costs


A top-to-bottom reorganization at Karma Automotive will see the Chinese-funded California startup try to steer a quick path toward profitability by selling its engineering, design, customization and manufacturing capabilities to other companies.

Karma’s plant in Moreno Valley, California, has capacity for up to 1,000 hand-built vehicles per year. But production of the company’s Revero GT hybrid performance sedan is expected to be between 500 and 1,000 vehicles per year. Karma wants to sell excess capacity as well as its product development and vehicle integration expertise to other automakers in a new business plan it calls 4+1.

Karma spokesman Dave Barthmuss said the company is open to building another company’s vehicles in its plant.

The change in direction at Karma resulted in an executive shuffle.

Bob Kruse, the former General Motors engineer who played a key role in the development of the Chevrolet Volt, has left his role at Karma, where he served as chief technology officer. Wards Auto first reported the changes at Karma.

No successor for Kruse has been named, said Barthmuss.

But one of the executives behind Detroit’s VLF Automotive, Gilbert Villarreal, has joined Karma as its COO. His main task right now, Barthmuss said, will be to manage the restructuring, which could see layoffs of some of the company’s total global work force of 1,000 employees.

Villarreal, along with product development wiz Bob Lutz, founded VLF in 2016 to build high-performance versions of the old Fisker Karma. Lutz and Villarreal have worked together since 2012. Production of the Corvette-engined Destino ended when the company ran out of Karmas to convert.

“His role is to make sure we can grow as a high tech incubator and creator of luxury vehicles,” Barthmuss said of Villarreal.

Under Kruse, Karma re-engineered and redesigned the Fisker Karma, renaming the stylish sedan the Revero GT and replacing the GM-sourced powertrain with one from BMW. Kruse had been aggressively promoting the new car, which launched this month.

Barthmuss said Karma’s production plans remain to build and sell between 500 and 1,000 Revero GTs per year, and that the company needs to be staffed appropriately for that volume. “Do we need all these engineers? No, we don’t,” he said.

Other projects in the pipeline at Karma — a higher performance Revero and new models including an SUV — appear to be on track, Barthmuss said. Karma is wholly owned and funded by Wanxiang Group, one of China’s largest auto parts suppliers based on revenue. Wanxiang is believed to have cut the amount of money it is investing in Karma, Wards reported, from $400 million per year to just $100 million.

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