DOE Ends Auction for $168 Million Fisker Loan
October 18, 2013 9:54 AM
comment(s) - last by
Winner hasn't been announced nor has the size of the loss for taxpayers
The Energy Department has been conducting an auction seeking bidders for the $168 million of the $528 million loan originally given to Fisker Automotive before it went belly up. While the auction has ended, the energy Department hasn't officially announced who won the auction.
The auction was conducted last Friday including opening bids from an unknown number of qualified bidders. The federal government is evaluating all of the bids in an attempt to find one that is in the best interests of the taxpayers. Once the final bidder is chosen the remaining negotiations having to do with the sale will take place.
Fisker was originally granted a $528 million loan from the $25 billion Advanced Vehicle Technology Manufacturing loan program instituted by the Obama administration. Fisker went on to lose roughly $35,000 on each Karma it sold, and when the company
failed to make a $10 million payment
to the Department of Energy in April of this year, the government seized the company's reserve account and recouped some of that original loan amount.
Despite the high-profile failures of automakers under the government loan plan, the
Obama administration is looking to start
the controversial Advanced Vehicle Technology Manufacturing loan program up again.
The executive director of the Energy Department loan program office Peter W Davidson said last month, "After exhausting any realistic possibility for a sale that might have protected our entire investment, the department announced today that we are auctioning the remainder of Fisker’s loan obligation, offering the best possible recovery for the taxpayer."
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10/19/2013 2:47:48 PM
Those dollar amounts are loan guarantees, aren't they?
A loan guarantee is not money received from the federal government. It's the government telling the bank it'll pay back the loan if the company fails to pay it back. In other words, the "company" only received federal money if it goes bankrupt (the money they used up from the loan came from the fed's coffers instead of the bank's).
If the company manages to stay in business long enough to pay back the loans, then it won't have received any federal money. It's actually one of the more common-sense type of subsidies - it costs the government less if they provide loan guarantees to companies which don't go bankrupt.
10/21/2013 1:53:24 PM
A loan guarantee is not money received from the federal government.
Not going to nit pick over verbiage since they all "received" money in the form of loans. But I'm sure a macro economist would agree with you since you're looking at the big picture. But I would emphatically disagree that we couldn't have done better. So my concern with it is that it seems they hand out these loans with too few strings attached. Minimal liability and protection for tax dollars - remember this isn't just the government spending their money, it's the government spending *our* money. Seeing the failure rates, I am not surprised anyone could confuse these loan guarantees with VC funding, because to me it looks like a guise.
I would personally find different ways to kick start alternative energies, or at least significantly modified.
And yes, absolutely eliminate the subsidies for big oil while you're at it to even the playing field.
"There is a single light of science, and to brighten it anywhere is to brighten it everywhere." -- Isaac Asimov
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