Another Obama Green Project Folds after Getting Millions from Taxpayers
In yet another of the Obama administration’s disastrous green-energy investments, a fly-by-night electric car company is on the verge of bankruptcy after getting nearly $200 million from the U.S. government to develop hybrid vehicles.
When the administration was making its case to invest taxpayer dollars in the southern California startup company, Fisker Automotive, it assured that thousands of much-needed jobs would be created in the region which has been hit hard by unemployment. It also touted Fisker’s innovative plans to develop two lines of plug-in hybrid electric vehicles that could run up to 300 miles on a rechargeable Lithium-ion battery.
So when the Department of Energy (DOE) announced in 2010 that it would give Fisker $528.7 million for its experiment, Vice President Joe Biden—well known for his many gaffes—put the company on a pedestal, saying “the story of Fisker is a story of ingenuity of an American company, a commitment to innovation by the U.S. government and the perseverance of the American auto industry.” Then he credited the “real dedication by this administration” for helping “America’s auto industry reclaim its top position in the global market.”
He wasn’t the only one to put his foot in his mouth. Pushing for the multi-million-dollar allocation a year earlier, Obama’s Energy Secretary (Steven Chu) guaranteed Fisker would develop two lines of plug-in hybrids that “will save hundreds of millions of gallons of gasoline and offset millions of tons of greenhouse gas emissions by 2016.” Furthermore, Secretary Chu said approximately 5,000 jobs would be created or saved. “This investment will create thousands of new American jobs and is another critical step in making sure we are positioned to compete for the clean energy jobs of the future,” Chu said.
Turns out that, after taking $192 million from Uncle Sam, Fisker has laid off three quarters of its employees and the feds have finally acknowledged that it’s likely on the verge of bankruptcy. One California newspaper reports that Fisker failed to make a $10 million first payment on the $192 million government “loan.” The company has manufactured only 2,700 vehicles, sold a laughable 2,000 and hasn’t built one since July, according to the story.
This week the House Committee on Oversight and Government Reform will hold a hearing (“Green Energy Oversight: Examining the Department of Energy’s Bad Bet on Fisker Automotive”) to address the administration’s “bad bet” on the startup company. One committee member, a congressman from Ohio, says the Obama administration owes American taxpayers an explanation as to why this deal was made in the first place and what action will be taken to minimize the loss that taxpayers face.
Undoubtedly taxpayers will take a huge hit. This already happened with Solyndra, the northern California solar panel company—bankrolled by Obama fundraiser George Kaiser—that folded after getting $529 million from the government. Despite the “serious concerns” of U.S. Treasury officials about the risky infusion, a federal audit exposed how the controversial deal was suspiciously rushed through for a politically-connected entrepreneur that had raised large sums for Obama. Judicial Watch is investigating the Solyndra scandal and has sued the administration for records related to the shady deal.