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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 recently launched 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?"

 Fisker Karma

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 announced 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. 

Source: Detroit News

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RE: Anyone need an extra billion?
By mindless1 on 6/27/2012 9:08:13 PM , Rating: 2
Except you overlooked one crucial detail. We have to have defense funding. This loan is part of a larger problem, the policies of the government to loan not just to this company but it is one of thousands getting hand-outs to build things or provide services that the average american does not benefit from nearly as much as the rich do.

Fisker builds toy cars for the rich. I suspect the rich already have cars, no?

RE: Anyone need an extra billion?
By praktik on 6/28/2012 6:54:13 AM , Rating: 2
Technically correct - defense is a necessity. So some amount of defense spending is necessary... But is defense spending over the combined amount of the next 16 nations in a given year necessary?

These guys offer an interesting perspective on the graft and waste in US defense spending:

RE: Anyone need an extra billion?
By FITCamaro on 6/28/2012 8:26:43 AM , Rating: 2
Considering we protect over 16 other nations with that military, yes.

RE: Anyone need an extra billion?
By praktik on 6/28/2012 8:55:06 AM , Rating: 2
Right and defense spending is such a paragon of efficiency you couldn't do your World Policing for say, the combined budgets of the next 3 nations??

RE: Anyone need an extra billion?
By FITCamaro on 6/28/2012 8:27:54 AM , Rating: 2
No the crucial detail is that defense is a mandated duty of the federal government per the constitution.

No where though does it say anything about the federal government having the authority to become venture capitalists.

"Google fired a shot heard 'round the world, and now a second American company has answered the call to defend the rights of the Chinese people." -- Rep. Christopher H. Smith (R-N.J.)

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