Is Fisker just one huge government mistake?
Fisker: Surfing on the taxpayers dime
A year behind schedule, and still no US manufacturing plant?
I haven’t been a big fan of Fisker and its plug-in hybrids, nor have I been much of a hater, even though every visit to one of their auto show booths during press days suggests they are quite an elitist bunch.
But the EPA’s fuel economy rating of the Karma, and the fact that after a $529 million US loan, Fisker is today producing cars in Finland, not the US, has put a bit too much starch in my shirt for comfort.
“With the approval of the Obama administration, an electric car company that received a $529 million federal government loan guarantee is assembling its first line of cars in Finland, saying it could not find a facility in the United States capable of doing the work,” reports ABC.
I’m sorry, but shouldn’t the loan approval been based on the guarantee of factory work? In fact, shouldn’t there have been detailed plans about factory purchases and jobs created?
“We’re not in the business of failing; we’re in the business of winning. So we make the right decision for the business,” Fisker CEO Henrik Fisker told ABC News. “That’s why we went to Finland.”
It’s been two years since Fisker received its US loan and since it has created 500 Finnish manufacturing jobs? Sure, eventually, Fisker might create US manufacturing jobs, but if sales don’t support the business, which is very possible, such manufacturing might never occur.
Again, shouldn’t this have been a loan requirement? What kind of underwriting does the government do on these loans? None?
But that isn’t really what’s bugging me.
Instead, its the 52 mpge rating that the Karma is rated by the EPA. The Toyota Prius basically achieves that today, for far less money — making it a real possibility for far more consumers — and at far more benefit to the environment according to recent studies. And the Prius didn’t require $1/2 billion in tax payer money for loans, and another $7500 in consumer tax credits per vehicle.
52 mpge is just not good enough for tax payer money, particularly without an instant guarantee of immediate US jobs. Even then, I’m not sure Fisker was worth the loan. Ultimately, little Fisker is doing is really going to challenge established automakers, unlike Tesla, which might also be a waste of taxpayer money, but at least Tesla is breaking new technological ground and driving real innovation.
There is no doubt the government needs to be involved in helping new energy companies compete in the auto space, but the Fisker loan proves they need to act more intelligently when doling out taxpayer money. Sure, Wall Street spends other people’s money more recklessly, but that’s not an excuse for extremely fatty government pork.
Isn’t amazing that David Harris doesn’t give us any information as to he is or who he works for when giving us this glossy picture of how well the taxspayer’s money is being spent by people who have provided no promise that a vehicle will ever be built in the USA.
John Thompson, Port Charlotte, Florida
Retired business man.
We think that ABC missed the mark and failed to tell the whole Fisker story. ABC insinuates that Fisker used political connections to receive DoE loans and also makes the misleading point that, despite taking loan money from the DoE, Fisker is producing its first car, the Karma sedan, in Finland.
Please note the following points of clarification:
• The Fisker Karma is the world’s first environmentally-responsible luxury sedan with a unique hybrid electric powertrain developed by a highly-skilled team of engineers and designers in America.
• Not a single dollar of the DoE loan has been, or will be, spent outside of the United States. 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 of 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 produce its Nina platform vehicles in the U.S. for export 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. This has helped to create jobs throughout the U.S, including 650 people at Fisker’s headquarters in California, over 100 at the Delaware plant and many more at various suppliers.
• 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).
• Only private equity financing has been used for costs not covered by the DoE loan. We have raised more than $600 million in private equity financing thus far and only a small part has been spent on production costs in Finland.
• 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.
• There is no link between Fisker Automotive and any political party. We are politically neutral – our focus is on building luxury electric vehicles.
• 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.