By Gary P Jackson
This Fisker Karma is yet another case of the federal government, through the Department of Energy, funding a turd with a shiny paint job.
Before we go further, readers need to know that former Vice President Albert Gore, Jr., the Bernie Madoff of the global warming scam, is a major investor in Fisker and no doubt played a part in securing over a half-billion dollars of your tax dollars in loan guarantees for this lemon. From the Wall Street Journal in 2009:
Gore-Backed Car Firm Gets Large U.S. Loan
WASHINGTON – A tiny car company backed by former Vice President Al Gore has just gotten a $529 million U.S. government loan to help build a hybrid sports car in Finland that will sell for about $89,000.
The award this week to California startup Fisker Automotive Inc. follows a $465 million government loan to Tesla Motors Inc., purveyors of a $109,000 British-built electric Roadster. Tesla is a California startup focusing on all-electric vehicles, with a number of celebrity endorsements that is backed by investors that have contributed to Democratic campaigns.
The awards to Fisker and Tesla have prompted concern from companies that have had their bids for loans rejected, and criticism from groups that question why vehicles aimed at the wealthiest customers are getting loans subsidized by taxpayers.
“This is not for average Americans,” said Leslie Paige, a spokeswoman for Citizens Against Government Waste, an anti-tax group in Washington. “This is for people to put something in their driveway that is a conversation piece. It’s status symbol thing.”
DOE officials spent months working with Fisker on its application, touring its Irvine, Calif., and Pontiac, Mich., facilities and test-driving prototypes.
Matt Rogers, who oversees the department’s loan programs as a senior adviser to Energy Secretary Steven Chu, said Fisker was awarded the loan after a “detailed technical review” that concluded the company could eventually deliver a highly fuel-efficient hybrid car to a mass audience. Fisker said most of its DOE loan will be used to finance U.S. production of a $40,000 family sedan that has yet to be designed.
“It’s the ability to drive significant change in fuel economy across a large market segment” that swayed the department to approve the Fisker loan, Mr. Rogers said. “We got quite excited.”
Henrik Fisker, who designed cars for BMW, Aston Martin and Tesla before starting his Fisker Automotive in 2007, said his goal is to build the first plug-in electric hybrids that won’t sacrifice the luxury, performance and looks of traditional gas-powered luxury cars.
The Karma will target an exclusive audience — Gore was one of the first to sign up for one. Mr. Fisker says all new technology starts out being expensive. He pointed to flat-screen televisions that once started at $25,000 but are now affordable to the mass market.
Couple of things to note. One, the Karma which had a target price of $89,000 actually stickers for around $109,000. There is, at this time no $40,000 “family sedan” in the pipeline. And despite being an “American startup” the car is built in Finland by Valmet Automotive.
Also, not only are taxpayers on the hook for Fisker, we are also on the hook for another half-billion to Tesla, which builds it’s cars in the UK.
A billion dollars in loan guarantees to companies who manufacture their product overseas. Why?
The only good news? Someone at the Department of Energy was actually paying attention and realized Fisker was having all sorts of production issues, and froze the loan money. The bad news is $193 million had already been given to Fisker before anyone was paying attention.
Consumer Reports recently tested the Fisker Karma, or at least attempted to. The thing broke down before they could actually test it. According to CR the first time in their history any vehicle broke before they could test it.
Ooooh, that is bad Karma.
A six-figure Fisker Karma electrified sedan broke during Consumer Reports check-in period, before the magazine even could begin testing it, delivering another black eye to the struggling automaker.
“Our Fisker Karma cost us $107,850. It is super sleek, high-tech—and now it’s broken,” the magazine lamented in its blog today in an item headlined “Bad Karma.”
The dealer CR purchased it from did repair the car and it was subsequently tested.
The car has had numerous problems, including a massive $55 million battery recall.
Fisker, which has sold 650 cars worldwide since it’s creation has been able to secure private financing, but as the Wall Street Journal pointed out in April:
In a recent lawsuit, an individual investor in Fisker said that he was forced to buy more shares or risk losing his original investments in a prior round. The lawsuit characterized Fisker’s current financial situation as one in serious immediate need of new capital.
This brings us to the latest. The Obama regime is actually touting Fisker as a “success story” in a propaganda piece called Beyond Solyndra.
Department of Energy officials are a bit sore about Solyndra, the solar panel company that received $535 million from their stimulus loan guarantee program and abruptly declared bankruptcy, leaving 1,800 workers without a job and taxpayers on the hook.
So, in order to combat the negative press about their green energy programs, DOE officials have created a slideshow highlighting their favorite loan recipients. They titled it “Beyond Solyndra” because they want Americans to understand that their program is about much more than one bad company. Or even three bad companies, if you count two other recent “green energy” bankruptcies — Beacon Power ($43 million DOE loan guarantee) and Ener1 ($119 million DOE grant). But who’s counting?
The department’s “Beyond Solyndra” presentation laments all of the unfair news coverage. “[W]hile critics have focused their attention on the Department’s loan guarantee to Solyndra,” it states, “the full story is that the Department’s loan portfolio as a whole is having a transformative impact.” Indeed — DOE also funds transformative firms like Fisker, a Finnish electric car company that is featured in the department’s slideshow. Fisker received a $529 million loan guarantee. Fisker’s Karma, a $115,000 electric car, received the 2012 Design of the Year award from Automobile Magazine — a fact that DOE’s slideshow makes sure to mention.
Unfortunately, Fisker reportedly plans to cancel the manufacture of vehicles in the United States. Last May, its loan guarantee was frozen by DOE because, as a department spokesman explained at the time, “Fisker has experienced some delays in its sales and production schedule.” Two months after winning the design award, Fisker laid off 66 employees since it was running out of the $193 million of the loan that DOE had already disbursed.
In noting how cool Fisker’s Karma design really is, Automobile Magazine offered this caveat: “There is no way to know yet whether Fisker will be a Lamborghini-style success or a DeLorean-style failure.” The latter is looking increasingly likely. In April, Fisker threatened to pull out of Delaware unless it got more government help — three years after Vice President Biden’s 2009 visit to its factory there. That factory was supposed to employ about 2,500 people by now, but USA Today reported in April that it is “absolutely empty.“
Given all this, and the $193 million that taxpayers could lose, it is surprising that Fisker would be featured in the Obama administration’s official propaganda as a positive sign of what the Department of Energy is doing. On the other hand, it seems oddly fitting that President Obama’s administration would think it grounds to boast that it has subsidized a car that looks cool but doesn’t sell.
As I noted in an earlier piece, it’s past time to get government out of the banking business. Government, at any level, has no business financing private industry. It’s been proven over and over that politicians and bureaucrats suck at picking winners and losers. With few exceptions, they’ll pick a loser every time.
As we are seeing, there IS private money out there. There was no need to hand Fisker a wad of tax payer cash. Same goes for Tesla Motors. What’s even more disgusting is this stimulus money, money that was supposed to be used to create jobs in America, actually created jobs in Finland and Great Britain!
Global warming is a hoax, a con, but the government believes in it so much, that billions upon billions of dollars have been thrown at every clown who shows up with some new “green” idea. None of these ideas pan out, and with few exceptions, the companies go bankrupt, meaning the tax payers loose again.
We need serious, sudden, and relentless reform in government, at every level. One of those reforms needs to be an understanding that BANKS and VENTURE CAPITAL FIRMS loan money. It’s their job. They are the experts.
You don’t see bankers showing up at the DOE trying to do that job, do you? Governments shouldn’t try to do the banker’s job either. They are no good at it. And it’s destroying the country. The U.S. government is nearly $16 TRILLION in debt and borrows forty cents out of every dollar spent from China.
This is insanity. And it’s destroying the nation’s future and the future of generations to come.
This has to stop.