Stop me if you’ve heard this before. An administration walks into Congress and insists on billions of dollars to “invest” in green-tech startups, then loses its shirt on bad bets - even while knowing the bets were bad. If that sounds like Solyndra, well, you’re right...
... Fisker Automotive, which continued to get millions in taxpayer funds even while failing to meet the conditions of its loan:
Newly obtained documents show the Obama administration was warned as early as 2010 that electric car maker Fisker Automotive Inc. was not meeting milestones set up for a half-billion dollar government loan, nearly a year before U.S. officials froze the loan after questions were raised about the company’s statements.An Energy Department official said in a June 2010 email that Fisker’s bid to draw on the federal loan may be jeopardized for failure to meet goals established by the department.Despite that warning, Fisker continued to receive money until June 2011, when the DOE halted further funding. The agency did so after Fisker presented new information that called into question whether key milestones — including the launch of the company’s signature, $100,000 Karma hybrid — had been achieved, according to a credit report prepared by the Energy Department.
Some may wonder what will happen to all of the American manufacturing jobs that the loans helped create. On that score, we don’t need to worry … because all of that cash didn’t produce a single job anyway:
Vice President Joe Biden announced in late 2009 that Fisker would reopen a shuttered former General Motors factory in Wilmington, Del., to produce plug-in, electric hybrid vehicles. The plant was never completed and never produced any cars.
Once again, we see that “investing” only works when the investor is managing his own money, and not public funds. How many millions of dollars have been lost because this administration couldn’t admit that it backed turkeys — and also admit that firms that can’t attract investors on its own are the worst possible bets in the first place? The biggest question that the White House should answer is the names of those who kept approving the cash disbursements to Fisker, Solyndra, and a host of others in its loser portfolio even after finding out that the companies were failing.
But this story is not over yet. As Reuters reports today, the CEO of the company is heading to Congress once again to explain that Fisker can be successful if the right "financial and stratgeic resources" are provided. We won't hold our breath...
"After resolving initial launch challenges, the cars perform well and customers love them," according to a copy of Henrik Fisker's testimony to the panel. "Fisker still has the potential to build on these achievements if the company can secure financial and strategic resources."
The House Oversight and Government Reform committee will focus on the U.S. Department of Energy's (DOE) decision to grant Fisker Automotive a $529 million loan in 2009.
The hearing comes as the automaker verges on collapse. Among the key questions is whether Fisker's prospects were strong enough at the start to warrant the DOE's backing, which helped trigger a flood of private financing for Fisker.
Forecasts in 2009 for the sale of hybrid and electric vehicles far outstripped subsequent demand.
"I'm not sure there is anything anyone can say or do to help Fisker," said Theodore O'Neill, an analyst with Litchfield Hills Research LLC. "The company is adrift without Henrik.
"The supply chain is broken, so they can't get parts on credit anymore, and while it is one of the most beautiful cars on the road, there is insufficient demand," he added.