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Fisker, the hybrid car company on the verge of bankruptcy, was a complete mess the past few years.

Congressional testimony taken Wednesday showed the car company produced vehicles that locked owners inside and wouldn't let them exit, one of a host of problems the automaker faced. The House Committee on Oversight and Government Reform took testimony from several high-ranking Fisker executives, including founder Henrik Fisker. The committee is looking at whether Fisker properly used $192 million in Department of Energy loans.

The committee is hoping to use Fisker as an example of what Republicans view as government waste. Republicans have targeted Fisker and Solyndra, a solar panel company that went under shortly after taking loans from the Department of Energy, as examples of the folly of putting government money in start-up companies backed by political allies of President Obama.

Fisker received money from a similar loan program started under the Bush administration.

Fisker was the only car company present, though GM, Ford and other automakers have also taken loans. The Fisker loan represents less than 2 percent of the car-loan program, Democrats told The Associated Press. Fisker, though, has apparently been failing to meet its milestones for these loans since as early as 2010.

The committee is chaired by Darrell Issa (R-Calif.), an especially belligerent member of Congress when it comes to government investments in private industry, entitlements and just about anything supported by the Obama Administration. Issa compared Fisker to Yugo's founder Malcolm Bricklin, Preston Tucker (made famous in the Francis Ford Coppola film Tucker), and asserted that Fisker made mistakes that GOP Presidential Candidate "Mitt Romney would not have made on his first day out of business school."

The DOE recently seized $21 million in a reserve account of Fisker as the company readies for a probable bankruptcy filing. "While this is a hard time for the company's employees and investors, our overall portfolio of more than 30 projects continues to perform well and more than 90 percent of the $10 billion loan loss reserves Congress established remains intact," DOE spokesperson Aiofe McCarthy said.

Opponents of the President and of government investment in green energy don't have to work very hard to make the example of Fisker Automotive look bad to voters. That specific company should never have been on the receiving end of tax-payer investment.

While Fisker only received $192 million of what would have been DOE loans of more than $500 million if it had been able to meet its milestones, the company raised and burned through a total of about $1 billion, according to news reports. The rest was provided by private investment.

All of Fisker's problems beg the question, why did the U.S. invest in this company in the first place?

Five Reasons Why Taxpayers Should Never Have Financed Fisker

1. If Fisker could raise a total of $1.2 billion, with less than 20 percent coming from taxpayers, why involve the taxpayers at all? Private investment, such as that coming from private-equity/venture capital firm Kleiner-Perkins, couldn't have covered the whole nut? Why did the private investors need the tax-payer participation?

2. Start-up car companies are about the highest risk investment a person can make. It takes enormous amounts of capitol to sustain a car company through engineering, development, safety testing, distribution, etc. A lot can go wrong, and ultimately the success of a car company with a new brand is going to depend on how good its marketing is, not how good the technology is.

3. The government has no business staking a car company with no track record. The bailouts of General Motors and Chrysler in 2009 were different cases, because the scale and scope of those businesses were highly intertwined with other supplier companies, dealers, etc. A huge chunk of the economy was riding on the future of GM and Chrysler.

4. Government investment is much better directed at building up the infrastructure to support electric vehicles nationwide, as well as in making batteries less costly. Car companies like Ford, GM, Toyota, Honda and Nissan can make all the EVs and extended range EVs this country is ever going to buy. What they need is batteries to cost less and more charging infrastructure. Supporting and investing in technology companies, such as battery makers or those building fast-chargers, is one thing. And that endeavor is entirely worthwhile. Investment in car companies using that tech is just not necessary or appropriate.

5. All offices of government should look at the optics of investing in a company making products that only the wealthiest three percent or so of households are going to buy. Fisker's cars cost in excess of $100,000, and the model that was going to be built in Delaware with the DOE loans was going to cost around $50K or so. Let the private equity firms, whose executives would be the ones buying these cars, fund the start-up builders.


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  • 14 Comments
      • 2 Years Ago
      I disagree completely. Helping to fund Fisker was a good move and to compare it to a typical start up is absurd. This wasn't a simple start up nor a simple car company. Europe and China are pouring billions into alternative energy research and there was a time when the USA was at the forefront of cutting edge tech. It is an investment into something quite novel and other countries are well aware of this. Sadly, our preeminence in such tech is waning as is our preeminence in the world economy. There was a time when America could afford to make these investments. Now all we are good at is making the rich super rich, and protecting the flow of oil.
      xessexcva9
      • 2 Years Ago
      In truth, the government has NO business financing anything. Government employees are not the brightest bulbs in the harbor anyway. If they were really good, they can make far more money in private enterprise anyway. Second, where do these arogant ignorant twerps get the authority to blow billions of tax dollars in their own half baked schemes OR the administrations agenda. Obozo tells us that White House tours have to be stopped for lack of funds, that air traffic controlers must be cut back, the military must be cut back, yet he blows billions to an enemy (Egypt), props up the muslim brotherhood governments in other countries and blames congress for refusing to increase taxes to suit his whims. He is an uneducated loser.
      • 2 Years Ago
      on the other hand tesla will pay back their loans within 5 years of the 10 year repayment deadline.
      wrestleprocbt
      • 2 Years Ago
      Cool looking car but not very well managed and marketed. Hey Gov't Motors, whens Amercia going to get it's money back or is it? Some secret deal with your buddies in office now???????? Make the unions give us back our money then we'll be happy.
      Ron Wizard
      • 2 Years Ago
      Our tax dollars at work. Elected governmnet officials in congress created this problem. Now they get to waste more tax dollars investigating it. Wouldn't it be nice to sue elected officials when they screw up like this? I call it real "Accountability".
      frebee2
      • 2 Years Ago
      why are they not going after solyendra for the half billion they stole.
        • 2 Years Ago
        @frebee2
        you can't even spell the name correctly, mr know it all.
      Docstu
      • 2 Years Ago
      "Hoping to use Fisker as an example of government waste" really? What would you call it? A sound investment or a political payback. I choose the latter. Of course that is ONLY my humble opinion and not those of a editor-in-chief but a common man using common sense.
      Randolph
      • 2 Years Ago
      Trans Am 2015
      jerryjeeper
      • 2 Years Ago
      Obama's track record for picking "winners and losers" has been pretty bleak and ALL at the expense of the Taxpayers.
      danwat1234
      • 2 Years Ago
      Why did they give money to a gas guzzling car company? The Fisker only gets 20MPG if you never plug it in, and only 50MPG if you always plug it in! Tesla on the other hand, awesome.
      Shirley
      • 2 Years Ago
      Solyendra & now Fisker, oh great Dictator great choices you have made...guess they can go on the list of all the other rotten choices you have made.
        • 2 Years Ago
        @Shirley
        obama obama obama. save us your odrama.
      • 2 Years Ago
      just before I looked at the draft which said $5799, I accept ...that...my mother in law woz actualie making money parttime from their laptop.. there uncles cousin has been doing this 4 less than 20 months and recently paid the morgage on there villa and bourt a great new audi. I went here, ................... Zoo80. ℂom
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