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Fisker woes deepen

Things aren't going well for electric automaker Fisker. The company was expected to file for bankruptcy protection this month and was forced to lay off 75% of its workforce. The unexpected slashing of its workforce led to a suit by former employees. Today we learned that Fisker has failed to make its first $10 million payment to the Energy Department to repay the massive federal loan it was given.

A spokesperson from the Energy Department named Aoife McCarthy said that the federal government earlier this month recouped $21 million of the $192 million it loaned Fisker.

"Given the obvious difficulties the company is facing, we are taking strong and appropriate action on behalf of taxpayers," McCarthy said.

"Using the safeguards we write into our loan agreements, the department stopped disbursing on the loan in June 2011 after the company, taking a significant chunk of taxpayer money with it short of the aggressive milestones that we had established as a condition of the loan," she said. "As a result, while our original loan commitment was for $529 million, only $192 million was actually disbursed."

Fisker’s current and former CEOs are set to testify at House hearing this week about the struggles with the automotive manufacturer. Along with the automotive executives from Fisker, Energy Department supervisory senior investment officer for loans program office, Nicholas Whitcombe, will also be testifying.

The Obama administration approved Fisker for the $529 million federal loan in 2010. The automaker produced only 2,500 of its plug-in hybrid sedans at an estimated cost of $660,000 each when federal and private funds are considered.

Source: Wall Street Journal

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RE: Crony Capitalism
By Crazyeyeskillah on 4/23/2013 12:33:31 PM , Rating: -1
Let's cut the shit, these companies WANT to make money. Each and every one of them intends to be successful and self sustaining over their life time. The immediate observation a competent person would take away from your list is that the amount of money needed to create a new energy startup in the US is absolutely astronomical. Most businesses only fail because they don't have the cash flow to complete their initial phases. Also, a lot of these companies are hiring either newer engineers or people that have not worked in this industry before.

Lets take IBM for example. Decades of creating NEW techonology on a per contract basis for customers in their stitching with experience engineers of that field. They have consistently been successful while shedding the fat of individuals that are either under performing or not capable of producing new technologies within the contract terms (usually 1-2 years).

Contrast that with these new start ups who are trying to create foreign technologies they have little to no experience with, create all the industry inherent relationships needed to get their costs down, and train a f'n legion of engineers to try to figure out how to problem solve things that aren't found in textbooks. You can see why so many are failing so dramatically.

RE: Crony Capitalism
By ppardee on 4/23/2013 12:53:00 PM , Rating: 5
The problem isn't that they didn't want to be successful. The problem is that they didn't have the ability to be successful in a free market and our government used you and me to fund them to further Obama's (and the Left's) agenda. That's not how capitalism works.

The reason these people needed loans from the government was that they couldn't sucker enough investors in.

Yes, some businesses will just fail, but the difference between the government using our money to fund these failed businesses and an investor doing the same is that the investor is taking a risk for the possibility of a substantial financial reward. We are just taking it in the pants.

And you're also right that these companies are trying stuff that others have never done before, like solar panels, electric motors and running a profitable business. Or hybrid cars. You think Detroit didn't want to jump on this opportunity because they were paid off by 'Big Oil'? There wasn't a market for it, or where there was a market for it, the tech wasn't ready.

RE: Crony Capitalism
By Dukeajuke on 4/24/2013 9:45:07 AM , Rating: 1
I agree that it's sad that all these companies that were supported by taxpayers money have failed. But you are missing a big part of what is going on here. The US government has a long history of developing new technologies through government programs and Federal departments such as NASA and the DOD. And that is all paid for by your tax dollars right? The goal here was to develope new technologies to wean us off fossil fuels. What the Bush and Obama administrations did was to attempt to spur the development these new technologies by giving public "grants" to private companies instead of trying to do it within the federal bureaucracy (which is terribly inefficient). Some of these new energy companies have been successful, some have not. So was it a waste of taxpayer dollars? That depends on how much it has actually helped further develope alternative energy technology which I don't think can be measured yet.

RE: Crony Capitalism
By cmart on 4/23/2013 1:08:17 PM , Rating: 2
These companies like Solyndra may want to make money but with a government loan they have no incentive to succeed. It's a win-win for them, fail or not. Is Brian Harrison, Solyndra's former CEO, homeless and destitute? Is he in debtor's jail? Is he on the hook for one cent of our money that he blew and lost? Nope, nope, nope.

Oh, it's tough out there for start-ups, sure. But with no consequences for failure, it can be downright impossible for them and they don't care -- they'll just burn through our money and when it's gone, move on to that next pie in the sky.

RE: Crony Capitalism
By hartleyb on 4/23/2013 1:25:15 PM , Rating: 2
One of the items that is always missed in this argument beyond lack of customer demand is infrastructure. I wouldn't mind owning an electric car if it was reasonably priced and I could charge it at work, or in town. The reason no new energy policy has ever worked is the government hasn't put in place an infrastructure to support alternatives. For example (very Simplified), put in hydrogen pumps at all stations, and before you know it you will have people driving hydrogen powered cars. The consumer wants electric powered or alternative fuel vehicles, but there has to be an infrastructure to support it. You can't even take 99.9% of these cars to a local mechanic, because there are no parts on hand, and in many cases no parts via any kind of normal supply chain.

If you want electric or alternative fuel cars:

1. Build an infrastructure (Charging stations or alternative fuel stations across the country).
2. Start off providing cars that are electric, but have gas generators for when there is no charging station available, or if the distance is way beyond the battery capacity.
3. Put in place supply lines for parts and accessories.
4. Reduce cost (Maybe a turn in your gas powered car and get a specific price break type of program)
4. The only way 1-4 will happen is if you get the oil companies to build, and charge, for the infrastructure and power, or the oil companies will continue to lobby congress to vote against any normal expansion of electric vehicles.

"We shipped it on Saturday. Then on Sunday, we rested." -- Steve Jobs on the iPad launch

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