Better Place liquidators to fire over half of workers

Electric-car manufacturer to let go two-thirds of employees; of the company's 900 customers in Israel, 200 were company employees.

Better place 311 (photo credit: Better place)
Better place 311
(photo credit: Better place)
The liquidators in charge of winding down Better Place, the electric-car manufacturer that filed for bankruptcy earlier this week, said Thursday they will fire of two-thirds of the workforce.
Of the 209 workers to be let go, 160 to 170 would receive notice later in the day, leaving the company with 111 workers, Sigal Rozen Rechav, charged with liquidating the company, told the Knesset Economics Committee on Thursday. All the employees will receive salaries for May, and further layoffs could be expected before the liquidation is complete, she said.
In the first phase of the liquidation, which will run through June 13, the 38 battery-swapping stations would continue to operate for car owners, though the question of how many of the stations will continue to operate after that date and for how long remained unresolved, Rozen Rechav said.
“With the current number of customers, there is no model that can cover the costs,” she said. Of the 900 Better Place customers in Israel, 200 of them were company employees.
The company, which had $8 million to $9m. in cash left on hand, had costs of about $7m. a month, including $2m. of salary commitments.
A few unlucky Better Place customers will not be able to utilize their cars for that entire period of time. The Transportation Ministry put a hold on import licenses for the company, meaning that customers who have not yet received their cars are stuck. Economics Committee chairman Avishai Braverman (Labor) requested that the ministry find a solution by the end of the day.
During the discussion, a slew of other thorny subjects facing liquidators came to the fore. Chief among them was the fate of a Swiss branch of Better Place that held the company’s patents and intellectual property. Of the 14 companies in the Better Place group, only four of them were in Israel, and not all have yet applied for bankruptcy.
If the liquidator is unable to bring the Swiss company’s assets into the Israeli bankruptcy process, which she promised to attempt, the value of the patents could remain outside their reach, providing no benefit to the customers, suppliers and employees seeking compensation.
The committee discussed how existing customers could make use of their cars, which can only travel up to 120 kilometers without a charge or a battery swap.
Customers need a solution because without the working infrastructure, “you had a car and now you have a hunk of iron in the yard,” Rozen Rechav said.
Braverman said the legal situation was complex.
“The battery in the cars belongs to Better Place and the Renault company,” he said. “Does the liquidator intend to take these batteries?” Customers who said they were satisfied with their cars under the existing system urged the government to invest in public charging outlets or find a way to rescue the battery-swapping stations.
The way the state responded to the needs of the customers could set the tone for its future support of electric vehicles. Braverman called for a followup meeting next week.