Fisker - The New Solyndra: Obama Kept Pumping Taxpayer Cash As Company Was Failing

Tyler Durden's picture

It appears, once again, that the government's inept approach to spending 'other people's money' has blown up in their face. As HotAir.com reports, newly obtained documents show the Obama administration was warned as early as 2010 that electric car maker Fisker Automotive Inc. was not meeting milestones set up for a half-billion dollar government loan, nearly a year before U.S. officials froze the loan. Just as with Solyndra, Congress seemed convinced to spend billions of taxpayer money 'investing' in green-tech startups - only to lose everything. Simply put, in our humble opinion, the pattern is explained by the 'monopoly money' perspective we suspect these funds are viewed as in light of Bernanke's inexorable funding of the government's largesse. None other than the great Joe Biden reveled in the news in 2009 that Fisker would re-open a closed GM plant creating jobs, jobs, jobs; it never completed the task and never created one job. When the money isn't yours, 'investing' public funds is oh so easy and it appears, with zero consequence for the decision makers - again.

 

Via HotAir.com,

Stop me if you’ve heard this before.  An administration walks into Congress and insists on billions of dollars to “invest” in green-tech startups, then loses its shirt on bad bets - even while knowing the bets were bad.  If that sounds like Solyndra, well, you’re right...

 

... Fisker Automotive, which continued to get millions in taxpayer funds even while failing to meet the conditions of its loan:

 

Newly obtained documents show the Obama administration was warned as early as 2010 that electric car maker Fisker Automotive Inc. was not meeting milestones set up for a half-billion dollar government loan, nearly a year before U.S. officials froze the loan after questions were raised about the company’s statements.

 

An Energy Department official said in a June 2010 email that Fisker’s bid to draw on the federal loan may be jeopardized for failure to meet goals established by the department.

 

Despite that warning, Fisker continued to receive money until June 2011, when the DOE halted further funding. The agency did so after Fisker presented new information that called into question whether key milestones — including the launch of the company’s signature, $100,000 Karma hybrid — had been achieved, according to a credit report prepared by the Energy Department.

 

Some may wonder what will happen to all of the American manufacturing jobs that the loans helped create.  On that score, we don’t need to worry … because all of that cash didn’t produce a single job anyway:

 

Vice President Joe Biden announced in late 2009 that Fisker would reopen a shuttered former General Motors factory in Wilmington, Del., to produce plug-in, electric hybrid vehicles. The plant was never completed and never produced any cars.

 

...

 

Once again, we see that “investing” only works when the investor is managing his own money, and not public funds.  How many millions of dollars have been lost because this administration couldn’t admit that it backed turkeys — and also admit that firms that can’t attract investors on its own are the worst possible bets in the first place? The biggest question that the White House should answer is the names of those who kept approving the cash disbursements to Fisker, Solyndra, and a host of others in its loser portfolio even after finding out that the companies were failing.

 

But this story is not over yet. As Reuters reports today, the CEO of the company is heading to Congress once again to explain that Fisker can be successful if the right "financial and stratgeic resources" are provided. We won't hold our breath...

"After resolving initial launch challenges, the cars perform well and customers love them," according to a copy of Henrik Fisker's testimony to the panel. "Fisker still has the potential to build on these achievements if the company can secure financial and strategic resources."

 

...

 

The House Oversight and Government Reform committee will focus on the U.S. Department of Energy's (DOE) decision to grant Fisker Automotive a $529 million loan in 2009.

The hearing comes as the automaker verges on collapse. Among the key questions is whether Fisker's prospects were strong enough at the start to warrant the DOE's backing, which helped trigger a flood of private financing for Fisker.

 

...

 

Forecasts in 2009 for the sale of hybrid and electric vehicles far outstripped subsequent demand.

 

"I'm not sure there is anything anyone can say or do to help Fisker," said Theodore O'Neill, an analyst with Litchfield Hills Research LLC. "The company is adrift without Henrik.

"The supply chain is broken, so they can't get parts on credit anymore, and while it is one of the most beautiful cars on the road, there is insufficient demand," he added.

 

Lawmakers may raise questions about the relationship between the DOE and Fisker, which has been strained in recent months, people familiar with the matter have said.

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redpill's picture

An expensive, complex, fire-prone hybrid that isn't very fast and doesn't get very good gas mileage.  I just don't understand how it could have failed.

FL_Conservative's picture

That's "investment", not "spending".  Haven't you heard??  /sarc

TJ00's picture

Well it's employment for millions of mechanics fixing each car every few miles and millions more firefighters and lawyers every few thousand, remember broken windows is 20th century, now we're in the 21st we have wheeled MOABS that break down dozens of times before the target, I mean destination.

Dewey Cheatum Howe's picture

The broken car economy an iteration on the Krugman broken window economy.

Manthong's picture

It’s just comforting to know that this same leadership, mindset and investment approach is in the process of yielding the same results for most every aspect of US and global society.

Dewey Cheatum Howe's picture

I think I will start my own iteration on this, open an auto glass business and go around town breaking car windows. Actually with all these out of work 20 something year olds I bet they have plenty of pent up aggression looking for an outlet and would gladly go into some high end neighborhoods and do it for free.

MacGruber's picture

I like how everyone is wetting themselves over the government granting a LOAN to a company to start a new field of industry that could actually help the U.S. be competitive in world markets, yet nothing is mentioned at all about the numerous military spruce gooses out there like the now infamous F-35 that has cost taxpayers billions in development, and will cost a projected $200M per unit (or 1/2 of a Fisker loan). I get the mismanagement aspect of the arguement, but as far as goverment being asleep at the wheel and mis-allocating tax dollars (or should I say Chinese lended funds), this is a mere drop in an infinite sea of crony inspired waste.

Dewey Cheatum Howe's picture

You have to start somewhere........ The government shouldn't be in the direct investment including vetting business plans when it comes to loans in an industry it knows shit about simple as that.

TuesdayBen's picture

That darned Barry Obama, he's one heck of a doggone sharp businessman. He is all about capitalism and he is a whiz at understanding the bottom line. And that is how he's been able to so adroitly pull the US out of that depression he inherited. Thank the lucky stars for good ol' Barry O. Mm mm mm.

nmewn's picture

So, there were no jobs "saved or created" in Delaware or Valmet Automotive in fucking Finland?

Color me shocked ;-)

StychoKiller's picture

The Obamatron should stick to what  he knows:  Guns & Ammo Sales!

SwimmininNawlins's picture

Just because one thing is obviously fucked does not mean that we should ignore other things that while they may be fucked are not quite as fucked as the original huge fuck story.

FL_Conservative's picture

These "investments", whatever industry they pertain to, only exist as part of corporate welfare (aka, crony capitalism) and they're a consistent failure.  It's how politicians pay back those that support their political career.  Hence ALL such "investments" should be eliminated......permanently.  It's also why the central government keeps growing bigger and bigger.  There's lots of friends and family, you know.

eternalblue's picture

well for one thing, military spending is actually authorized in the US constitution, whereas "green" technologies are not.

kchrisc's picture

So the those in gov cannot make shit that they supposedly need to kill and steal from more people but they have all the wisdom that is needed to fund a business/industry that the "create money" banks don't even see as wise.

Or could it just be a clear case of pissing away stolen loot on "you do me and I'll do you" politics?!      hujel

piliage's picture

Despite some failures, many us military programmes have been proven generators of fantastic value added technology. This is due primarily to two things:

1) DARPA, an extremely successful early technology launch platform with an open public vetting process via the us congress and many leading us researchers
2) certainly in the 50s and 60s, rand corporation. There would be no Internet, Boeing 747, 777, 787, or airbus for that matter without rand.

So, with real oversight from external adults doing real analysis on behalf of the public and broad input from congress, military spending is often a great driver of innovation. Not always, but generally pretty good, particularly when compared to the crap that the European Union funds which has mostly been money down the toilet. You want to see crap, check out the EIT programme of Barosso.

aerojet's picture

We should deploy every SWAT team in the country to shoot holes in any boats they can find.

onewayticket2's picture

how many air traffic controllers did these bad investments cost?

onewayticket2's picture

how many air traffic controllers did these bad investments cost?

smlbizman's picture

this something else to thank these fuckers for....at least get to second sentence

http://www.baltimoresun.com/health/maryland-health/bs-hs-insurance-rate-...

buckethead's picture

I find it useful to place blame where it is most aptly pinned. In this case, one might consider placing the blame on congress, which is where the power to spend actually resides. As fun as it is to blame Obama, the headline misses the target.

Urban Redneck's picture

Congress's fault was thinking that a clown like Barry knows or would hire anyone remotely competent to make a responsible decision in the first place.

It was Chu's DOE that reviewed and approved the application.

onewayticket2's picture

you mean the Congress with 60 democrats in the Senate and Nancy Pelosi overseeing the House majority?

McMolotov's picture

It's for the fucking children. Quit yer bitching.

pods's picture

Fisker?

I thought that was like the "shocker" but reversed?

pods

Aeternus's picture

It was progressive....... While it lasted........ Ahah, Ahaha, AHAHAHAHAHAHA!

 

https://www.youtube.com/watch?v=fyklt01lN_I

NotApplicable's picture

Enough with your stupid fucking harlem shake links already.

Dr. Engali's picture

 Electric car alert! Paging DCFusor!

FL_Conservative's picture

You mean Dr. Emmitt Brown and Mr. Fusion.

Hippocratic Oaf's picture

He'll be with us momentarily. He's trying his damndest to find a positive article for buying a Dolt.

Freddie's picture

Hope & Change.  Give every illegal alien a Fisker.  Order more drones for Americans who might complain.

FEDbuster's picture

Instead of "A chicken in every pot", it's now "An EBT card in every purse and wallet".

augustusgloop's picture

BA's fireprone, grounded 787 fleet led to new highs for boeing stock. proven model. 

DCFusor's picture

At least GM made a car that works.  Still love my Volt, BITCHES.  Almost 2 years now and I like it more every time I go someplace and don't have to buy gas.  And, it's fun to drive.  It's no Tesla, but then - those are kind of hard to just write a check for and drive off - you have to wait, and hope they are still in business by the time they make your car.

Hate GM all ya want - this was a "bet the company car" started long before the bailout junk went down, and they made a good bet, it's the best thing they ever made, which puts a lot of other manuf's cars behind it.  98% of owners would buy another - find another car with that stat.  Even one.

 

Defenestratus's picture

Buyers' Remorse, party of 1, your table will soon be available.

 

Dr. Engali's picture

98% of all 10 owners...not bad.

Kilgore Trout's picture

It's nice not buying gas. I take it your wife pays the electric bill.

Isotope's picture

The Fusor makes his own electricity. Almost all solar. See his website.

DoChenRollingBearing's picture

Why not take DCFusor at his word?  If he likes his car, he likes his car!

Col_Sanders's picture

Saw one of those shit-boxes the other day.  I was walking past a "Trader Joes" (notice I said "past" and not "into") and - naturally - it was parked right out front - they even backed into the parking spot so you could see the extra-large "Zero Emissions" sticker/badge on the back.  They wanted to make damn sure that everyone walking buy *knew* they cared more about the planet than anyone else possibly could.

I Lol'd.

What that sticker actually says is "I'm too fucking stupid to understand that I've only *moved* the source of emissions - from my car to a power plant somewhere..."

These are the same asshats who believe the world will eventually "run out" of water.

SeattleBruce's picture

Is Obumma still president?

Esso's picture

He has ALWAYS been the president.

Back to work, citizen.

Gene Parmesan's picture

I miss the days when the incompetence of the federal government was (rightly) taken as fact by all. Now people are begging the .gov to take their money and manage their lives.

McMolotov's picture

Who among us doesn't long for a gigantic DMV-like bureaucracy to herd us like livestock from cradle to grave?

Hippocratic Oaf's picture

Thought we were there already