Two Republican Senators Ask Questions on Loans Granted to Fisker Automotive
June 27, 2012 1:21 PM
comment(s) - last by
Senators fear Fiskercould default on giant government loans
The United States government granted a number of loans to different high-tech startups in an attempt to kick start innovation and research into alternative fuel and power. Among the companies that received these loans were Fisker Automotive and Tesla Motors. Tesla Motors has been undeniably successful and
its Model S and made deliveries to the first buyers of the electric vehicle.
Fisker Automotive, however, hasn’t been as fruitful. The auto company has experienced issues with battery packs that had to be replaced, and a test vehicle loaned to Consumer Reports
“died” with just a few hundred miles on the odometer
As the recipient of a government loan, U.S. Senators Chuck Grassley R-Iowa and Senator John Thune, R-South Dakota are now questioning Energy Secretary Steven Chu about why a loan was made to Fisker Automotive considering it is partly owned by Qatar Investment Authority, a foreign-owned company.
The letter to Chu read in part, "Why should the American taxpayer have to accept the credit risk of a company owned by a foreign government?"
The Energy Department loaned Fisker Automotive $529 million and awarded battery supplier A123 $249 million in grants. A Fisker spokesperson responded by stating that the company sold more than 1,000 cars globally and generated more than $100 million in revenue. The spokesman also stated that Fisker was focused on creating American jobs.
Fisker has already
delays in producing its lower-cost family sedan due to setbacks with the battery packs for the plug-in hybrid vehicle. Battery supplier A123 is
replacing 600 battery packs
in Fisker Karma vehicles at a cost of $55 million after manufacturing flaws were found in the batteries.
The letter from the Senators also asked, "Will DOE consider A123's ongoing financial struggles before distributing the rest of the grant?"
A123 intends to hire as many as 400 new employees in the coming months, as was a condition of receiving the state and federal money. The company currently has about 780 workers in Michigan.
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RE: Anyone need an extra billion?
6/27/2012 4:00:22 PM
Thank you John Keynes. You have to spend money to make money right? Thinking like yours is why we have 17 trillion in debt. But then again most of the Keynesian's won't acknowledge the flaws in their economic model. Like the government isn't very good at setting market priorities. And when the government is running a deficit, more spending equals more debt. especially in the long term. You want people to have more money? Lower their taxes. Taxes are what it costs a person to work. But of course you can't lower taxes because the government needs to waste more money buying favor. Or doing stupid things like supporting ethanol. If the government would require less, we would all have more. But most of you don't understand that. You want the government to do more so that you have to do less, which requires more resources from you in the long run.
You can balance the budget AND create jobs. But you can't do it by increasing spending when your income has decreased.
“Then they pop up and say ‘Hello, surprise! Give us your money or we will shut you down!' Screw them. Seriously, screw them. You can quote me on that.” -- Newegg Chief Legal Officer Lee Cheng referencing patent trolls
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