Your ongoing Obama green energy disaster of the day: Fisker Automotive
While we enjoy our latest Two Minutes Hate against oil speculators, here’s a little lesson in the interconnectedness of Obama’s disastrous “green energy” investments:
One of the big recent “green energy” epic failures is A123 Systems, which raked in $300 million from the “stimulus” bill, plus another $135 million in Michigan state funding. They’re currently teetering on the edge of bankruptcy, and just got slapped with a class-action lawsuit for allegedly “making false and misleading statements” about manufacturing deficiencies in their products.
One of those products was the electric battery used in the Fisker Karma, a $100,000 electric sports car that literally dropped dead when Consumer Reports took it for a test drive. A123 Systems was betting heavily on Fisker’s success – so heavily that they pumped $20 million of their own equity and cash into the auto maker.
Fisker got $529 million of your money from the Obama Administration, producing 500 manufacturing jobs. Unfortunately, those manufacturing jobs were in Finland, not America. Fiskers executives were quite proud of their wise decision to keep those jobs overseas.
Confronted by this horrific embarrassment, Obama apologists pointed to the Fiskers plant in Delaware, the lovely state from whence our Vice President hails. They bought an old GM factory (built when the “G” stood for “General,” not “Government”) and planned to build a much more affordable $50,000 car for the common man in their American facility. It’s called the “Atlantic.” It doesn’t actually exist, and it probably never will.
That’s because Fisker has begun laying off workers left and right at its Delaware plant, “because it ran out of government loan money,” as USA Today put it. “Fisker had failed to meet production and sales milestones it had promised in the loan agreement with the Department of Energy, so loan cash was shut off last May.” They’re up to 66 layoffs now.
As reported at The Truth About Cars, “At this point the plant is empty, Fisker having spent millions of dollars, most of it public funds, to remove the old equipment yet not having the money to buy and install a new assembly line.” Every single one of the few cars Fisker has sold were assembled in Finland.
The kinda-sorta good news, if you’re willing to put a happy face on anything salvaged from the ruins of Obamanomics, is that Fisker didn’t burn through all $529 million of the U.S. taxpayer money the Obama Administration handed them. They’ve only spent about $200 million so far. The Energy Department put a hold on the rest of their subsidized loans. It’s very unlikely they’ll be able to meet the qualifications necessary to unlock that money… and no private investor in their right mind is going to give them big bucks unless they know Uncle Sucker is going to provide that taxpayer support. Meanwhile, the state of Delaware is reportedly paying the utility bills for the empty Fisker factory, which is not exactly an encouraging sign to potential private investors.
The need to get that money from the Obama Administration wipes out whatever flexibility Fisker might have had to develop an alternative business strategy. As Ronnie Schreiber writes at The Truth About Cars, “The problem for Fisker is that their entire business plan was based on getting money from the federal government and other assistance from the state of Delaware conditional on building cars in that same Delaware plant. If Fisker walks away from Wilmington, they’re on the hook for that same $200 million that they’ve borrowed in addition to what they’ll need to set up shop somewhere else. There’s just no way they’re going to find private funding with that hanging over their heads.” Schreiber wonders if it’s time for the “Fisker death watch” to begin.
So, for anyone still wondering: no, command economics can’t compete with the power and wisdom of the free market. Subsidized production and artificially created demand are collapsing into a black hole of serial bankruptcies, as the dying days of Obamanomics leave us with nothing but a mountain of debt and empty factories. And if you think that isn’t bad enough, try adding in the lost profit from the true opportunities obscured by the static of command economics, and the immense interest payments we, and our children, will be shelling out to finance the hundreds of billions of dollars Obama has wasted.