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Fisker burned through $1.3B in private and government funding

The latest massive failure in the automotive industry to take a huge chunk of taxpayer money with it is Fisker. The automaker has been struggling and earlier this month laid off 75% of its workers. The company is also expected to file bankruptcy, seeking protection from its creditors.

Through all of its troubles, Fisker has only produced 2,500 of its Karma plug-in hybrid sedans (it hasn’t even begun production of the smaller Atlantic plug-in hybrid sedan). When you consider the amount of investor and U.S. taxpayer money given to Fisker in the form of government-backed loans, each of those 2,500 Karma electric vehicles cost $660,000 to produce compared to a retail price of $103,000.

Fisker had planned to spend part of the $529 million loan from the U.S. government to reopen an old General Motors manufacturing factory in Delaware. Despite the fact that Fisker had violated loan terms for the use of government-backed funds from being Energy Department, it was allowed to continue using the money according to a report released last week by a company called PrivCo.


Fisker Karma

“They made a mistake” in awarding the loan, PrivCo Chief Executive Officer Sam Hamadeh said of the Energy Department in an interview yesterday with Bloomberg. “Should they have fought this sooner? Obviously -- as soon as it became evident that they had begun to default.”

However, the Energy Department takes issue with the PrivCo report stating that the report contained errors. The Energy Department says that it halted Fisker's funding in late June of 2011 after the company had used about $193 million from the government loan.

Overall, Fisker spent $1.3 billion in venture capital and taxpayer money according to the report. Fisker is supposed to make the first repayment of $20.2 million on the loan granted from the Energy Department today. It remains unclear whether or not that will happen. 

Source: Bloomberg



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RE: Attempt to Create Jobs
By Mint on 4/23/2013 3:13:15 PM , Rating: 2
quote:
Then the government, failed to protect our manufacturing sector from outside influence (countries like china, and japan do this). For example, our deal with china is fairly 1 sided. We have no middle class anymore. Big business is trying to see to that personally.

What they're doing is, starving the economy of jobs.
Jobs have always been under assault from foreign cheap labor, competition/efficiency of big business, etc. Outsourcing was simply a preview of automation getting ridiculously good recently and in the future. Manufacturing is coming back, but jobs barely are.

What has kept the economy alive in the last 30 years is that all the income/profits from these factors was used to:
1. Buy more/better stuff;
2. Invest in equipment to build that stuff; or
3. Lend it, via the bank, to others who needed money to buy/build stuff.

The less we have of #1, the less we have of #2, and all the rest becomes the banks' burden in #3. We though #3 could get as big as it wanted and the private market would always want to borrow whatever it could, but we were wrong. It's obvious that #3 became so big that it was impossible for banks to lend it all back out safely. What's happening now is that a bunch of money is just sitting around as excess reserves, and it's growing.

There's only a few options to shrink #3:
a) cross your fingers that the rich will start spending more
b) redistribute their income to people who will spend it
c) tax their income and spend it via democracy
d) don't do anything and just accept high unemployment


RE: Attempt to Create Jobs
By TakinYourPoints on 4/23/2013 5:25:08 PM , Rating: 2
Miiiiint!

I never do this but there was a lengthy post you made several days ago that I didn't see until yesterday when someone else brought it up. My response so you don't see that I'm completely full of crap. :)

http://www.dailytech.com/Article.aspx?newsid=30371...

tldr - I didn't short stock because trying to catch a top is insanity. I sold call spreads against it instead, profiting when the stock didn't exceed the value of my calls and then profiting further when the stock finally did reverse.


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