By Edmund Jenks
Is Fisker Automotive Another Solyndra Style Waste Of Money?
We, at The EDJE, have a neighbor whose family was happy to tell me, about six months ago, that they had private investments in Fisker Automotive, Inc.
News broke this week stating that Obama’s Department of Energy was acting as a venture capitalist by issuing a 500 million dollar plus loan to a car manufacturing company on the heels of the bankruptcy announcement of Solyndra, a solar cell manufacturer where the Obama Administration thought it was a good risk to place taxpayer money at risk in a company that they knew would go bankrupt.
This excerpted and edited from Newsworks –
Tactics of Delaware carmaker Fisker questioned by ABC News
By John Mussoni – October 21, 2011
ABC News partnered with the Center for Public Integrity to do a series of reports that aired on various broadcasts over Thursday and Friday. It pointed to over $500 million in U.S. Energy Department loans for Fisker to build new-age fuel efficient cars.
The failed new energy company, Solyndra, is also casting a shadow over Fisker Automotive and other new technology companies. The ABC News report raised questions about how federal dollars are being spent in getting the Fisker assembly line up to speed in the old Boxwood Road GM plant in Delaware.
The report points to a General Accounting Office report saying there is not enough oversight on how the money is being spent. The GAO report also states there aren’t enough trained engineers who can analyze whether companies like Fisker and its chief competitor, Tesla Motors, are spending money appropriately.
ABC News focuses on the one Fisker assembly line already running in Finland. Some of those federal energy dollars were used on design plans. ABC interviewed Fisker head, Henrik Fisker who assured reporter Brian Ross the federal money was not being used to pay workers at the plant.
There is a tone of skepticism in both reports about whether there could be another company that fails despites federal backing.
Delaware has money tied to Fisker as well.
The state of Delaware has a big stake in Fisker’s success. Part of the deal struck in October 2009 was a $9 million grant that would off set utility charges while Fisker started the necessary changes needed to change the assembly process from what was left behind with General Motors to the Fisker assembly line. To date the state has paid $5 million, according to Governor Jack Markell’s office.
The state has also invested another $12.5 million in a loan to Fisker that will be converted to a grant if hiring goals are met. There have been 100 people hired so far in 2011. The goal is over 2,000 workers to be in place by 2013.
A Fisker spokesman told Fox Business Channel what the company meant to say was that full distribution would not begin until 2013. The spokesman said the company was still on track to begin production a year from now.
The Delaware facility looks about the same as it did when General Motors shut down the plant in July 2009. The water tower still has the GM logo. There are padlocks on the fences where hundreds of workers used to work.
When I came home, I could not wait to write the following to my neighbor:
“I just found out today in the news that you (and your dad) have nothing on me, in that, I am an investor in the Fisker Automotive, Inc. too! We have great taste.
This is NOT a Solyndra type of deal that the Obama Government made because there is actually a market for well conceived, well designed, limited production run boutique automobiles … no matter the sales price. The solar panels that were supposed to be produced at the Solyndra could only be made for $6.00 in a $3.00 solar cell market price world.
I hope to see Henrik Fisker again at the LA Auto Show.”
As per Fisker – Not a single dollar of the DoE loans has been, or will be, spent outside of America. All expenditures are reviewed by PwC (PriceWaterhouseCoopers) on behalf of the DoE. Image Credit: Fisker Automotive, Inc.
This excerpted and edited from Fisker website –
Fisker Statement re: Misleading News Reports
ID: 567 | 10.21.2011
There have been stories in the media today commenting on the Department of Energy (DoE) loan guarantees Fisker Automotive received. We wanted to give you some more information.
Not a single dollar of the DoE loans has been, or will be, spent outside of America. All expenditures are reviewed by PwC (PriceWaterhouseCoopers) on behalf of the DoE.
After receiving the DoE loan, Fisker made it a priority to create U.S. jobs which led to the purchase its own assembly plant in Delaware where we plan to establish production of our second, higher volume, line of vehicles (Project Nina).
There are currently over 100 workers reconfiguring the Delaware plant so that Fisker will be ready to begin hiring a skilled hourly workforce to producing its Nina platform vehicles in the U.S. for sale around the world. Many of these Delaware costs are covered by the DoE loans.
For the Karma program, the DoE loan money was used solely in the U.S. to fund design, engineering, and integration work.
Only private equity financing, of which we have raised over $600 million so far, has been used for costs not covered by the DoE loans, of which only a small part is production costs in Finland.
The majority of our private funding has been used to create jobs, including 650 people at Fisker’s headquarters in California, over 100 at the Delaware plant and many more at various suppliers throughout the U.S.
At the inception of the company, Fisker explored the possibility of producing the Karma in the U.S. However, there are no contract manufacturers like Valmet in the U.S., and none of the established domestic automakers were willing to partner with Fisker to provide a manufacturing option in the U.S. that would work for the Karma program. Our assembly arrangement for the Karma was in place before the DoE loans were approved, and has been widely reported on since 2009.
There is no link between Fisker Automotive and any political party. We are politically neutral – our focus is on building luxury electric vehicles.
More than 45% of the components of the Fisker Karma sedan are manufactured by approximately 40 suppliers located in the U.S. Some of our biggest suppliers in the U.S. include A123 Systems (Li-ion battery), General Motors Springhill Engine Plant (gasoline engine), Goodyear (tires) and TRW (regenerative braking system).
With the help of DoE loans, Fisker has already created hundreds of U.S. jobs, with thousands more in the near future. Ultimately Fisker is a high-tech American car company that we’re confident will be an American success story to be celebrated.
So, is Fisker Automotive another Obama/Solyndra style waste of taxpayer money? If the former design director of Aston Martin and the once president and CEO of BMW’s DesignworksUSA, Henrik Fisker has his way, we think not.
One last observation: The Obama Administration is sooooo confused that it voices support for the 99%ers of the Occupy Movement while spending taxpayer monies as a venture capital firm (over one billion dollars) in business efforts that meet the needs of the progressively defined 1%ers who can afford $80,000 plus green economy automobiles manufactured by Tesla and Fisker Automotive!
Now THAT is Hope & Change we can believe in!
… notes from The EDJE
[Article first published as Is Fisker Automotive Another Solyndra Style Waste Of Money? at Technorati]