In his profession as a Wall Street analyst, an adviser to the United Auto Employees and a vice chairman of General Motors, Steve Girsky made his bones by unwaveringly telling the unvarnished truth to power.
Because the CEO of struggling Nikola Corp., he retains his boldness.
“I feel our prospects are great,” Girsky said in a Friday interview with FreightWaves. “I feel 2024 goes to be the perfect 12 months within the history of the corporate.”
It will not take much to perform that. After a litany of setbacks, the corporate’s money continues to be tight. But it surely is at its highest level in 18 months. Nikola is producing fuel cell trucks at its plant in Coolidge, Arizona, and starting deliveries to customers.
Nikola is patching together a network of hydrogen fueling stations in California that will allow the trucks it sells there to operate. And it’s a pacesetter in generating vouchers value tons of of 1000’s of dollars per zero-emissions electric truck from the California Air Resources Board.
Nikola founder Trevor Milton’s shadow recedes
The shadow of founder Trevor Milton is receding. He was sentenced last week to 4 years in prison on wire and securities fraud convictions. Nikola wrested $165 million from Milton in arbitration in October. And the corporate is “pursuing all avenues to get well as much as we will” to cover the tens of hundreds of thousands it paid for Milton’s defense as a part of a September 2020 separation, Girsky said.
The challenges remain daunting. Nikola must nail down a source — possibly two sources — of batteries to repair 209 battery-powered electric vehicles recalled last August and resume taking orders. It needs certainty that Volvo Group will supply battery packs for the fuel cell trucks after acquiring the battery business of Proterra Inc. out of bankruptcy in November.
“Every thing we’ve heard thus far says they need to proceed to run the business as a stand-alone and scale it,” Girsky said.
Nikola’s stock (NASDAQ: NKLA) languishes around $1 a share — it traded intraday at 87 cents on Tuesday — partly because greater than 1 billion of 1.6 billion authorized shares are in the marketplace. Newly activated shares dilute the worth of longer-term holders.
Slowing the revolving door of Nikola executives
Then there’s the revolving door of senior executives. Two CEOs, two CFOs, the pinnacle of the energy business and others departed in 2023.
“There’s been quite a lot of turnover. But I feel morale at the tip of the 12 months is significantly better than it was after I took over [in August],” Girsky said. “The situation is stabilizing from a personnel perspective. There’s more to return. But I feel we’re all beginning to row in the identical direction.”
Girsky, 61, became Nikola’s fourth CEO in as a few years, giving up the role of board chairman to oversee every day operations.
“The board asked, ‘Do you ought to do a search?’ I said, ‘No. This company’s had 4 CEOs in 4 years. It needs stability.’ I wanted to guide this team.”
CFO search more likely to conclude in January
Like most CEOs, Girsky surrounded himself with people he trusts. That began with recruiting Mary Chan, his partner at VectoIQ, as Nikola’s first chief operating officer. He elevated Steve Schindler, VectoIQ’s CFO, from director to chairman to succeed him. All three knew Nikola intimately from taking it public in June 2020 as its special purpose acquisition company sponsor.
“Mary Chan is a really capable, seasoned executive,” Girsky said. “She [spent] 25 years at Lucent. I brought her in to run OnStar [at GM]. She speaks to the engineers in a way that’s different from the best way I speak to them. Yes, she was a part of VectoIQ. I feel that helped because she actually knows the corporate. I went through wars along with her.”
The retirement of longtime CFO Kim Brady in April, and his successor, Stasy Pasterick, in November, after only six months within the role, leaves a serious function to fill.
“Now we have candidates that we’re chatting with. You’d be surprised on the variety of people who find themselves actually excited by this,” Girsky said. “I might expect to get something announced, hopefully, sometime in January.”
Running toward Nikola
The recent addition of turnaround expert Jonathan Pertchik to Nikola’s board demonstrates that, relatively than being a pariah, Nikola appeals to exceptional leaders.
“It’s a fantastic example of one other very seasoned, very capable executive running towards Nikola. There’s this perception that everyone’s running away from Nikola,” Girsky said.
Pertchik took over as CEO at TravelCenters of America in March 2020, and reorganized the corporate. BP America acquired TA in February at a premium of 10 times the stock price when Pertchik arrived three years earlier.
The remaining of the story
Girsky also said he:
- Expects no additional mass layoffs, following the discharge of 270 employees in June.
“There could also be some adds in some places and subtractions in different places. Energy is a business we’re growing, so there’s going to be resources which are deployed there, especially as we put more allotting locations on the market.”
- Won’t rule out a reverse stock split to lift the value of Nikola shares. A reverse split awards a single share for a multiple of existing shares; Nikola has those because shareholders agreed to double the variety of authorized shares to 1.6 billion in August.
“[A reverse split] doesn’t change anything except the share price,” Girsky said. “That doesn’t mean we won’t consider it sooner or later in the longer term. I don’t need to close off any options. But after we have a look at the highest five things we’re working on, that’s not certainly one of them.
“The share price will care for itself. I used to be an analyst for nearly 20 years. Stocks are connected to firms like rubber bands. Sometimes they get ahead, sometimes they get behind. We will only control what we control, which is the performance of the corporate and satisfying our customer.”
Recalled trucks should begin returning to customer in Q1
- Has little concern in regards to the “notice of going concern” filed as a part of the corporate’s 10-K filing for 2022 in February. A going concern filing says an organization will not be in business 12 months from the time it’s enforce.
“We’re not managing to eliminating a going concern. We’re managing to enhance the money profile of our business, satisfying our customers [and] getting trucks in the sector. We’ve taken our burn rate down from where it was to start with of last 12 months.”
- Sticks to the projection that customers whose battery-electric trucks were recalled in August will begin getting their trucks back in the primary quarter of 2024. He declined to call a battery supplier or suppliers.
“We’ll share the choice at a later date. You must just know we have now a plan A and a plan B. The goal is to start out to get them back in customer hands in Q1 after which construct from there. So, we get the trucks back to customers, we restock the dealers after which we have now a handful that we will incrementally sell.”
Related articles:
Nikola cuts 10-year hydrogen cope with FirstElement Fuel
Nikola claws back $165M from founder Trevor Milton
Girsky becomes Nikola’s third CEO in a 12 months
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