Fisker Karma – Another Obama Boondoggle

Everyone’s probably heard of Solyndra but how many of you have heard of the Fisker Corporation?

Two years ago, Henrik Fisker got $529,000,000 (yes, that’s $529 million) in government loan guarantees to start up his electric car company.  All the money hasn’t circled the bowl yet, but I’m predicting it will.

Let’s start off with the price of this “green” car.  Guess how much they cost.

Higher….higher….you’re getting warm…..$97,000.00!

According to our ever brilliant Vice-President Joe Biden, spending $529 million was seed money “that will return back to the American consumer in billions and billions and billions of dollars in good new jobs.”  That’s a lot of billions.  On the other hand, an article in Forbes didn’t see it that way.  At the same time, it was announced that Fisker was to re-open a former GM plant in Delaware for the less-expensive “Nina project.”  Delaware’s Council on Development Finance approved a $12.5 million loan which would become a grant if Fisker spent at least $175 million renovating the old GM facility and showed that it created 2,495 jobs in five years.

Anyway, it turns out that Mr. Fisker decided to build the car not in the U.S. even though there are a countless number of auto workers in need of jobs.  Instead, 500 assembly jobs were created in Finland!  Yes, the car is being manufactured 4,000 miles away on our dime.

Fisker’s plan was to build a cheaper, compact car in the United States beginning in 2013.

Well, it looks like there’s already a problem with the luxury model.  All 239 cars have been recalled because of a potential fire hazard.

There are recalls all the time by automobile companies but this is one helluva way to start a new company – with the help of U.S. taxpayers!

Nevertheless, our government is hellbent on shoving “green” technology down our throats whether we like it or not.

Now we’re learning that Fisker is laying off 26 workers at the GM plant in Wilmingtonand another 40 contractors and employees working on design and development of the Karma in California.

The car’s been delayed because of “regulatory delays” and “battery pack problems” which prompted a voluntary safety recall by Fisker.

“The Energy Department made loan availability for the Nina project contingent on Fisker meeting development and sales milestones for the Karma, which the company missed.  Fisker is now negotiating with the DOE to modify the loan agreement so funds for that project can be released.”

I read yet another story about a fire badly damaging the home of a new Fisker Karma owner, and the 60-day old electric car was the source of the blaze, according to the Fort Bend County, Texas, chief fire investigator Robert Baker.  Fisker denies this of course.

In March, another Karma broke down in the middle of a Consumer Reports road test, a failure that Fisker later said was due to a faulty battery.

Yet another Fisker Karma went up in flames recently near Palo Alto, CA.

This is yet another one of President Obama’s boondoggles he’d sooner sweep under the carpet than have it widely reported on this year.  So what about those billions and billions and billions of dollars Vice President Biden was expecting to see and the 2,495 jobs Delaware was hoping to see?  Never happened; never will.

I don’t get it, but if you do, God bless you.

Author Bio:

For over twenty years, Leona has tried to heed her husband’s advice, “you don’t have to say everything you think.” She’s failed miserably. Licensed to practice law in California and Washington, she works exclusively in the area of child abuse and neglect. She considers herself a news junkie and writes about people and events on her website, “I Don’t Get It,” which she describes as the “musings of an almost 60-year old conservative woman on political, social and cultural life in America.” It’s not her intention to offend anyone who “gets it.” She just doesn’t. Originally from Brooklyn, and later Los Angeles, she now lives with her husband, Michael, on a beautiful island in the Pacific Northwest, which she describes as a bastion of liberalism.
Author website: http://www.idontgetit.us
  • Leona Salazar

    I love that Mitt Romney mentioned “Fisker” right after “Solyndra”  when describing Obama’s $90 billion waste of taxpayer money on “green energy”.

  • Leona Salazar

    I still don’t believe taxpayer money should be used to fund these types
    of projects.  If the product is that good, private monies should be
    raised.  The information provided by Mr. Ormisher doesn’t address Vice
    President Biden’s outrageous comments. 

  • Leona Salazar

    I received the following comment from Roger Ormisher from Fisker Automotive:

    We have just read the article posted on your site – Fisker Karma.
    Another Obama boondoggle.

    Whilst we respect that everybody is entitled to their opinion and political view, we would always hope that any responsible commentator or writer would contact the company concerned to check out the facts.

    Unfortunately, there were a number of bad factual errors in the piece which paint Fisker in a very negative light.

    Attached are some key facts about us, that correct some of these errors and also put forward our position as a forward-thinking American company developing the next generation of technology.

    I hope that you would take these into consideration, whatever your political views.

    Many thanks

    Roger

    Fact sheet:

    Key Figures:

    Number of jobs created in the United States: Number of jobs created in Finland:
    Total U.S. government loans received:
    Fraction of U.S. government loans spent in U.S.: Fraction of U.S.
    government loans spent in Finland: Total amount of private equity
    raised:

    Ratio of private funding to public funding:

    Facts:

    1,000 (400 direct + 600 indirect) 250
    $193 million
    100%

    0%
    over $1 billion 5 to 1

    Fisker Automotive has created over 1,000 American jobs

    Fisker has created more than 1,000 jobs in the U.S. in engineering, design, and technology at our U.S. facilities and across our supply chain and retail distribution networks.

    Fisker Automotive has spent NO taxpayer dollars overseas

    All of the U.S. Department of Energy (DOE) loan money must be spent in the U.S., as required by the loan program and reviewed independently by PricewaterhouseCoopers.

    Fisker Automotive has received $193 million in loans from the U.S. government

    Fisker Automotive was approved for a $529 million loan facility under the Advanced Technology Vehicle Manufacturing (ATVM) loan program, of which the company has only received $193 million. All of the loan money has been spent in the U.S. and must be paid back, with interest.

    Fisker Automotive is primarily funded by private equity

    Since its founding, Fisker Automotive has raised over $1 billion in private equity. Compared to the $193 the company has received in government loans, the ratio of private to public funding is roughly 5:1.

    Final assembly for the Karma is performed by Valmet Automotive

    Fisker Automotive uses a contract manufacturer named Valmet Automotive, based in Finland, to perform final assembly of the Karma.
    Fisker pays for this service using private equity funds only.
    Approximately 250 jobs are supported at Valmet to assemble the Karma.

    The ATVM loan program was created under the George W. Bush administration

    The U.S. congress created the ATVM loan program on a bipartisan basis in 2007. Fisker Automotive was approved for the loan under the Obama administration in 2009. ATVM is not stimulus funded.

    Fisker Automotive is non-partisan and makes NO political contributions

    Fisker Automotive and its cofounders – Henrik Fisker and Bernhard Koehler – have made no political contributions to presidential candidates, political parties, or their associated political action committees.

    • Chief98110

      It is interesting that Mr. Roger Ormisher does not tell us how many people here and now are working for Fisker in the USA.  His reference , “Fisker has created more than 1,000 jobs in the U.S. in engineering,
      design, and technology at our U.S. facilities and across our supply
      chain and retail distribution networks” covers a lot of territory.  How many of those were short term? As I asked, how many are actually working for Fisker in the USA now?
      I get the feeling that he is using tricky stats to support his position. But most troubling to me is WHY the car is assemble in Finland?

  • Chief98110

    The real problem aside from the government loan and the move overseas is
    the batteries.  Any electrician will tell you that trying to control DC current is  tricky. Others have tried and failed, check the history of the Corbin Sparrow.  When the Sparrow was running it could top 80 miles an hour and had a range of 30-60 miles. The problem was the batteries and the controller.  They are still around held together with duct tape. Unless the battery and controller issues are resolved that could be the fate of the Fisker.

    • Ron F

      Chief, that might be the real problem with the technology but to me the real problem is that we have these federal government programs guaranteeing loans to private companies [and foreign governments].  That would also apply to direct grants and any type of tax incentives.  The federal government is to provide for the general welfare, not micro-manage the economy and pick industries and technologies of the future.  The problem we have is I do not think we have had a Congress in years or an executive branch since Ronald Reagan that remotely understood the concept of limited government.

    • Ron F

      Thanks for reminding us about the Corbin Sparrow.  How many were built – 285?  They do have collector value.

  • Petter Hennum

    I have one and it is fantastic. It is just as well built, more fun,  looks better, and use almost no gas, as compared to my old Mercedes SL. Almost all parts are built in the US by American companies and have American patents. We should be proud and support this project and the US should build the worlds best cars.

    Petter Hennum

  • PD

    You realize this was a $25+/- Billion DOE project for green projects. The big 3 car makers got loans in the neighborhood of $5B each. Fisker and Solyndra got small slices of the whole program. And Fisker would be building cars in the states in 2013 if politics didn’t enter the funding discussion. It’s tough having the government as a partner.

    Everything in this article is old news, and has been addressed. The car is version 1.0 of new technology, and you have to expect to fix problems.

    Leona, go buy one, or at least drive one, there’s a dealer in Bellvue. Then go update on your facts.

  • Rob Mac

    I agree with keeping government out of the free
    market, but before blasting the government for attempting to break barriers
    into an industry, blast them for heightening barriers with tax break and
    other (regulatory) subsidies for oil, sugar beets, corn….not to mention banks
    and unions. 

    • Ron F

      Rob, I would like to do away with all subsidies and tax breaks.  I also think all income should be taxed the same which puts me outside of the mainstream of the Republican Party.

  • Roger Ward

    Fisker’s value and viability is not the question (although I doubt in its value and seriously doubt its chances to survive.)  The real problem is that $590 million of my money is at stake and I never agreed to put this money at risk.  Has any American been given the chance to vote on whether or not this loan guarantee should have been extended?  Given the abysmal failures of the Obama administration in their attempts to create “green” jobs, I think it’s a foregone conclusion that this will cost Americans big time …. or the half of us who actually pay taxes.  (Solyndra, anyone?)

    Where did the idea come from that Big Government has the right to create and develop new and unproven industries? …. and who authorized it to use our money in this foolish endeavor?  Speculation in new industries is best left to private capital!  The electric car industry had a good foothold at the beginning of the automobile age;  the market voted to ignore it and to go with the internal combustion engine.  If someone is going to gamble on this sort of technology, it should be GE or some other source of private capital!

    • Ron F

      Roger, the program was started when George W. Bush was President.  He signed the legislation.  My problem is not with the application under President Obama.  There never should be this type of federal program.  I do not want any administration micro managing the economy or any government programs to stimulate the economy.  Once we accept the idea, than it is difficult to complain about the application of the program.  What scares me is how many other programs are out there that we do not know about.

      • Roger Ward

        Ron, you’ll never catch me defending the Bush administration’s fiscal policies or its “big government” actions.  Having one failed presidency (Bush) should have taught us to avoid such a thing again.  Instead, we managed to put into office the single worst President in American history.  Who was it that said “a people deserves the government it gets”?  Woe is us.

    • trc

      read the history of airlines, computers, aerospace,
      trains, and guns….all essentially incentivized and subsidized by government.

  • Deleditor

    Very poorly done. Cut and paste job loaded with half truths. This is a program from the Bush administration. 

    • Ron F

      It is not a half truth.   The Advanced Technology Vehicles Manufacturing program was signed into law by President Bush in 2007 and the initial application was submitted to the Bush administration but it was approved by the Obama administration.  We do not know if the Bush administration would have approved the project.  Nevertheless, I am not critical of the Obama administration with respect to the loan guaranty.  We do not know if we will lose money on it and no administration is perfect.  If you have a program like this some administration will make a mistake.  I am against having any programas like this.

  • Ron F

    Iraq got something like a $2 billion loan guaranty from the Bush administration a year or two before our first war with Iraq and President Bush compared Saddam Hussein to Hitler.  How much did TARP cost under President George W. Bush.  Have we lost any money on the loan guaranty to Fisker yet?  All administrations have economic policies and tax policies which they consider helpful to the economy.  All of them are wrong some of the time.  I wish all administrations would stay out of commerce and that we would have a Tax Code that was just concerned with generating revenue and not trying to provide incentives for economic activity.

    • nickshaw

       I’ll accept what you say about the loan guarantee to Iraq.
      Would that be before Saddam invaded Kuwait, prompting Bushs’ comparison? You do know that Iraq was fighting Iran before that? That was considered a good thing back then (as it would now, I suppose). Further, Saddam was imposing a more or less secular culture in Iraq at the time. I think we considered that a pretty good thing too.
      Besides, it was a loan guarantee by your own description. Do you know if it was paid back if it was tapped or how much of anything was paid out by American taxpayers to cover the guarantee? Probably not, right?
      Personally, I would severely curtail any kind of loans or aid to countries that do not agree with US policy or don’t like us very much. Just as wouldn’t lend money to or help a neighbor whose dog craps in my yard or threatens to sue me for some stupid reason!
      As to Bush, the younger’s, part of TARP, most of it was paid back with interest.
      Zero went ahead and spent that on other things (against the rules of the TARP bailout I might point out!).
      I did not agree with the bailout, just so’s you know.
      Otherwise, I agree with you, the government has no business supporting commercial activity that suits it’s fancy at the time. It’s not the job of the taxpayer to hand over money promoting the commercial interests of other taxpayers, period!
      States may engage in this but, that’s their prerogative. It’s not a matter for the federal government.

      • Ron F

        Nickshaw, the reason I pointed out the Iraq loan guaranty is that Fisker is also a loan guaranty and we do not know if we will lose money on it yet.  As for the Iraq loan guaranty, we did have to pay the $2 billion but I do not know what we recovered when we froze and I assume took Iraq assets.  I understand the comparison was after the invasion of Kuwait but my point was all administrations make mistakes.  The senior President Bush was friendly with Noriega when he was the head of the CIA I believe and Noriega was considered a great friend of the United States but we invaded Panama to arrest him.  I understand that most, if not all, of the TARP funds were repaid but that does not include the toxic assets that were bought at book value, not market value.  My whole point is that I want the least interference in the economy by government whether it is through loan guarantees, grants or the tax code.  What President Obama is doing is what all administrations and both both parties do in one form or another.  I believe we are better off without the federal government trying to stimulate the economy.

        • nickshaw

           Agreed!

  • Guest

    Honestly, you need to get all your facts straight – you slanted your negative comments quite a bit to obviously push your agenda.  Fisker is promising new car company, with excellent technology.  Of course, their will be some initial issues on new advanced technology.  But, the Fisker Karma is a excellent new car, which will opn up the doors for smarter use of our energy in transportation.  By the way, the Fisker Karma is one amazing car!

    • nickshaw

       The only “slant” here addresses the fact that we, the American taxpayers, should not be investing in particular companies just because they are working in a field favored by this government. And more particularly, if they are working in a foreign land!
      If private money wants to advance the cause of electric vehicles, well, have at it. You won’t hear complaint from me!
      But, if a hundred year old technology is as earth shattering as you seem to imply, one has to ask, why is there not more private investment? Why do they need my tax money now when billions and billions have been invested in battery technology (and that’s where the problem is, not the electric propulsion part!) over the last hundred years with no appreciable advance?
      Money does not create innovation. No matter how much is spent. Especially if it’s directed to people involved with this administration and the “green” industry. I might not quibble if such funds were directed to purely research facilities, like universities and such.
      You do know Algore is or was involved with Fisker, right?

  • NS Sherlock

    Bernie didn’t write this article.

    • nickshaw

       Libs do not think clearly, as can be discerned from some comments here, NS.
      Why do you expect they can figure out who they should be writing to when making such comments?

      • NS Sherlock

        Agreed. I am enjoying the fact you are holding your ground and making them squirm. Good job!

  • Wheels55

    When I talk with people who support this kind of spending, they say we should invest in new technology for cleaner energy and to be energy independent. It sounds like this wasteful spending was a home run for Obama – people seem to like it.
    When I ask them: if this R&D was such a good idea, why didn’t the free markets invest in it a long time ago?, they have no answer. This isn’t technology for the middle class, yet so many in the middle class seem to like their tax dollars spent this way. And you wonder why Romney is behind in the polls…

    • dennis

      The free market DID invest in it – to the tune of $1B+ of venture capital and private equity. The drawdown on the government loan guarantee is $193M, or 15% of the total capital invested. I own a Fisker Karma, and it is an amazing car. 50-100 mpg depending on your commuting patterns. Puts BMW/Mercedes/Lexus to shame – and it is AMERICAN technology.

      • Wheels55

        It does seem like a great car. I hope you are right about that technology taking off. I just dislike the government betting on technology and companies with our money. As you point out, if this technology does succeed by bringing affordable 100 mpg cars to market, it will be because of private investment, not government.

  • Evanmc28

    Goldberg is silly. Call your local Fisker dealership and drive this car. It speaks for itself! 

    • nickshaw

       I’m sure it does speak for itself.
      I wonder what it’s speaking after a year or two of daily driving in heavy traffic in all sorts of weather conditions that is expected of every other car produced today (you know, other than the Lambos and Ferraris that hardly see the light of day!)
      If you happen to own a Fisker (which I assume from your comment) please come back in two years or so and tell us how much you still like your car and the new battery you just had installed that cost nearly as much as the original car did.

      • deny916

        That is if the car doesn’t catch fire and burn itself to bits….

    • Wheels55

      For that much money, it should do more than speak.

  • Phil Brous

    Mr. Goldberg,

    This is old stuff. If this is all you can come up with as a journalist, you should hang it up. Name a car company new or old that hasn’t had problems, name one, please? Oh, fires you wish to talk? I can name a few others that are still having trouble with this. Fisker has identified the problem, issued a voluntary recall and is fixing them. The car is actually easy to work on says my mechanic in our shop. It’s interesting that all our current customers are happy with their Karma’s.

    • nickshaw

       ”All our current customers”?
      It’s not like you’re about to agree with Bernie’s assessment, is it?

      • NS Sherlock

        There can’t be that many customers for $100,000+ per car. And, if this ‘green’ project goes belly-up as others have, who is going to repair this 5300 lb. hunk of junk?

        • nickshaw

           I’m sure a half way decent electrical guy could look after repair work after Fisker passes, NS. Yeah, the controls, I’m sure, are pretty complicated but, as I mentioned before, the traction motors themselves are fairly basic and I don’t doubt they are reliable.
          What will be funny are the ones with 50-100 lead acid batteries shoehorned into them after the factory unit is no longer available!
          Only the die hards will do this just to get them on and off the trailer at the car shows!
          I certainly wouldn’t drive it regularly on the streets. An accident might be…errr…scary, to say the least!

  • Berkminator

    It is very unfortunate to have columnists like yourself to prepare news as such to promote the current republicans for the upcoming election and use companies like Fisker just because it was tied to a DOE loan. More unfortunate is to compare it to Solyndra but I am not going to get into that. 

    Firstly, Fisker has not been able to use the entire 500+m loan from the DOE. only 190+m has been released and that money has been used entirely on product development and refurbishing of the Delaware plant. (At least thats what Roger omnisher from Fisker states)

    The money spent for the production of Karma has got nothing to do withDOE loan. Fisker has raised money privately equating more than $1bn for the production of Karma and I am sure that’s more than enough to make sure none of the DOE money is spent outside of the States.

    Cars unfortunately do get recalled due to problems in production.  However, this is not uncommon. Every car company in the world faces these issues. Just last week Lamborghini recalled more than 1000 2004 Gallardos for a potential fire hazard. More than 15 Ferrari 458′s and Lamborgini Aventadors (not to mention a couple of them going into flames) had similar issues. But of course since they are not tied with US politics, there is no need to put them on the spot right?I do not live in the States. I am a current Karma owner in Turkey and the car is magnificent. I havent been to the gas station over 2 months now. This car is the transition process of the car indutry’s elecrtic future. With all the bad press and negative publicity thanks to columnists and reporters like you, this company has suffered a lot more than it deserved. Yet I believe that they will still succeed with or without the DOE or the political support.

    • nickshaw

       ”This car is the transition process of the car indutry’s elecrtic (sic) future.”
      You are aware that the “electric car industry” has been going on for over a hundred years, right?
      And that 100 years ago there were electric cars that got the same range per charge and were nearly as quick as today’s electric cars?
      Can you give me guess how long this “transition process” is supposed to last?
      The problem is not the mechanics of the car. Electric traction motors are superior on many levels. The problem is the battery.
      Over a hundred years and billions of private dollars have been invested in improving battery technology. And yet, here we are, a technology that’s a hundred years old in a really cool looking package.
      What makes you think spending my money, my tax dollars, will make the leap to the magic battery possible?

      • Damore

         

         Nice! Way to dissect one sentence and ignore the facts
        of the overall comment.

        • nickshaw

           Okay.
          “Firstly, Fisker has not been able to use the entire 500+m loan from the DOE. only 190+m has been released…”
          Followed by,
          “Fisker has raised money privately equating more than $1bn for the
          production of Karma and I am sure that’s more than enough to make sure
          none of the DOE money is spent outside of the States.”
          If Fisker is such a good deal and private money is pouring in, why do they need my tax money? Will I be getting it back? “I” in the taxpayer sense of course.
          Particularly since…see my comment above.
          Happy now?

          • Berkminator

            nickshaw, as far as I know, one of the top priorities at the moment for Fisker is to pay the loan back via alternative debt financing/private funding and move on without the pressure of politics.  

          • nickshaw

             Good on Fisker if they do! It would give me some confidence that this wasn’t just another Algore induced scam, at least!