Fisker Misses $10 Million Payment to DOE as Feds Seize Reserve Account
April 23, 2013 9:49 AM
comment(s) - last by
Fisker woes deepen
Things aren't going well for electric automaker Fisker. The company was expected to
file for bankruptcy protection this month
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.
Wall Street Journal
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RE: Crony Capitalism
4/23/2013 12:53:00 PM
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
4/24/2013 9:45:07 AM
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.
"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer
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