Ex-Lilium Employees Say They Are Still Missing Pay

It was supposed to be a Christmas miracle.

Nearly three months after declaring insolvency, and the same day that hundreds of employees received termination notices in the mail, Lilium announced that it had found a group of investors willing to acquire the company for several hundred million euros. With barely enough time to process the news, the startup’s employees had their terminations revoked and were invited back to resume work in early January.

But the respite turned out to be short-lived. Nearly two months later, on Feb. 21, Lilium declared insolvency for a second time after the hoped-for investment never arrived. The second declaration of insolvency, unlike the first, was final, requiring that Lilium liquidate its assets entirely, roughly equivalent to Chapter 7 bankruptcy in the U.S.

For the startup’s whipsawed employees–which numbered approximately 1,300 prior to the first insolvency declaration in October–the decision to resume work in January has left them in a precarious position. While they were promised wages for nearly two months’ work, those paychecks never arrived.

Making matters worse, the German federal government has denied their requests for unemployment compensation, leaving many ex-Lilium workers unable to meet their near-term financial obligations.

In conversations with multiple former Lilium employees, they describe being strung along by management promises to hang tight until paychecks arrive, part of a pattern of what they describe as negligence and incompetence from senior leadership. They also blame the German government bureaucracy for allowing them to slip through the cracks without the compensation and benefits that would typically accompany an insolvency situation.

“The German bureaucracy has collectively let all of us down,” says one former Lilium employee. “There is a social safety net, but there is also the giant flyswatter of German bureaucracy that is preventing us from falling into the net. It’s a big mess–the various agencies in Germany don’t know how to handle it because they’ve never seen a situation like this before.”

“Lilium’s management has recklessly created this situation,” says another former employee. “There were many instances where they could have prevented this from happening. I mean, for over three months, we received no pay and no benefits, with no help from anyone, including senior management, who have just disappeared with no explanation.”

“Germany is such a highly regulated environment, and the Lilium team was so experienced,” a third former employee said. “It’s hard to imagine that all these former CEOs and CFOs [chief financial officers] could have let this happen.”

Representatives from Lilium did not respond to a request for comment for this article.

While it is not entirely clear why the promised investment never materialized, the former employees describe a situation in which management repeatedly assured them, week after week for nearly two months, that the money was in transit but had been slowed by difficulties associated with cross-border transactions.

“They kept telling us, ‘It’s a sure thing, the money is there. It’s just a transactional roadblock in the banking system. And then every single week after that, we’d have these all-hands meetings where they would reassure us that it’s still coming,” the former employee recalled. 

It is also unclear why the German government has not paid out unemployment benefits, the former employees speculate that the bureaucratic headaches created by the two rounds of insolvency and the formation of multiple limited liability companies–including a new company formed in January–created a situation in which the company’s workers simply fell through the cracks.

“Now if you go to the unemployment office, the first thing they ask is, ‘Who do you work for?’ And you have to explain the whole thing with the two companies, so they’re already confused,” the ex-employee said. “People are frustrated. We’re without health insurance. It’s a bad situation.”

Asked their view on why the company failed, the Lilium employees interviewed for this article largely blamed organizational decisions taken by management. They also point out challenges related to the physics of the Lilium Jet, although at least some of them believe the design still has promise.

One former employee blames “hubris” by management, speculating that the company’s leadership may have wanted to create an entity that was “too big to fail” in the eyes of the German government. He says that his department continued to bring new hires on board right up until the declaration of insolvency in early October.

“There was never any effort to slow things down and be fiscally responsible,” he says. “The spending just continued right until the very end.”