Government loses $139M on loan to electric car maker

[IDemo]

Source: NBC News

The Obama administration said Friday it will lose $139 million on a loan to struggling electric car maker Fisker Automotive Inc. after selling part of the loan to a private investor that immediately took the company into bankruptcy.

Hybrid Technology LLC, the California car maker's new owner, said it plans to keep Fisker operating after it emerges from bankruptcy.

The $139 million loss is the largest in the Obama administration's green energy loan program since the 2011 failure of solar panel maker Solyndra. The government lost $528 million in the Solyndra collapse, triggering sharp Republican criticism of the loan program and President Barack Obama's investments in green energy.

The Energy Department awarded Fisker a half-billion-dollar loan guarantee in 2009, but suspended it in 2011, after Fisker failed to meet a series of benchmarks. Fisker had received $192 million before the loan was frozen.



Read more: http://www.nbcnews.com/business/government-loses-139m-loan-electric-car-maker-2D11644165

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Bad news, I've always been a fan of the car.

[KansDem]

1. Here's the problem...

...selling part of the loan to a private investor that immediately took the company into bankruptcy.

Capitalists have no interest in solar panels and electric cars, so stop giving them our money to screw us over with.

The environment and energy should be national-security concerns. The government should just build the solar panels and electric cars itself and stop giving money to those who seek to rip us off...

[Bradical79]

2. What do you all think of our green energy investment program?

Has it paid off in any way? We only hear about the big failures in the media, because lets face it, if an investment breaks even there's not going to be anything for most so called journalists to talk about. It's a hell of a lot easier to write about a disaster rather than actually do research and gives us a good overview (good or bad) of how these things are working out overall.

Anyway, with our government's track record with what private companies we give money to in general, I feel like this money would be better off used as direct funding for R&D on something like solar power (for example). But, I don't know if that opinion is overly skewed by poor media reporting.

[IDemo]

3. Unfortunately, "thousands make today's commute safely" won't draw the attention

like "two die in head-on collision". Most reporting by its very nature will tend to focus on negative incidents, regardless of subject.

Renewables and alternative transportation face an uphill battle against a fossil industry that still receives hundreds of billions in subsidies. And given the tough economy, most investors won't pursue a venture into anything that isn't going to yield a short term profit as well as a long term growth potential.

The government does perform quite a bit of R&D on alternative energy tech at places like Argonne Labs and the INL in Idaho.

[7962]

9. "thousands make today's commute safely". I LOVE that! You're so right.

And it goes for so many things, too. BAd news always leads.

[Jimbo S]

18. Sounds like a headline from "The Onion"

which makes "The Onion" "The Onion".

[Paulie]

12. Tesla paid their loan back 9 years early.

And Nissan made the Leaf. Those are wins.

http://www.autonews.com/article/20130522/OEM05/130529956?template=mobile

[Grins]

17. I'm not so sure....

Susan Kraemer at CleanTechnica - Obama admin's hit rate far outperforms venture capitalists:

The US government guarantee of a private loan to Solyndra, at $535 million, represented a minuscule 1.4% of the Department of Energy investment in all renewable technologies. By contrast — Venture Capitalists expect much higher failure rates. Richard Stuebi, who advises Venture Capitalists on expected green energy failure rates, says that just 3 in 10 successes represents a successful VC investment strategy. That is 70% losers — not 1.4%.

Ventures vs. Dollars but it appears DoE does a better job. The "is it worth it" part? I think so.

[Conium]

4. Fisker Karma cost $660,000 each but sold for $103,000

April 22, 2013, BLOOMBERG NEWS:

Fisker Automotive Inc. spent more than six times as much U.S. taxpayer and investor money to produce each luxury plug-in car it sold than the company received from customers, according to a research report.

More: http://www.newsday.com/classifieds/cars/fisker-karma-cost-660-000-each-but-sold-for-103-000-1.5118474

It was quite a bargain for the rich. Maybe it was bad Karma.

[Snoopy 7]

5. So

We loose billions to the oil subsidies yearly we need to give money to those who want to make life better not the oil barons who corrupt and pollute the world...

[Paladin]

6. An early Christmas present to Obama critics and the automotive industry. (nt)

[kelliekat44]

7. They will get it back in the future. Not even as much lost on one unnecessary bomber.

Perspective is everything!

[n2doc]

8. I'm sure the righties will go nuts over this one

The tens of billions of DOD waste? Not so much.

Behind the Pentagon’s doctored ledgers, a running tally of epic waste:

http://www.reuters.com/investigates/pentagon/#article/part2

[PSPS]

10. Because, as we all know, government exists solely to "make a profit."

[Igel]

13. The left has thoroughly bought into this way of thinking.

If you're a private citizen and make an investment, you get part ownership in the company or, depending on the contract, on any profits. Investments are judged by ROI.

If you're a private citizen (or organization) and invest in people, you have a contract. They owe you the results of their labor and you can be taken to court for it. They can seize your property and garnish your wages--which basically means that you're their serf until the debt's paid. Much nicer than debtor's prison, presumably.

If you're a private citizen and make a donation to an organization or citizen you get a warm fuzzy feeling from knowing you did good. You might get a tax deduction. You might not. The homeless guy on the corner of the freeway doesn't issue donation receipts that the IRS accepts.

Most parents donate to their kids. If you do it right, if things work out, then they voluntarily donate back in some way--after all, it's a reciprocal relationship. The mercenary consider it an investment, and they're usually the parents of mercenary kids and are disappointed with their ROI. Kids aren't property, not in that sense, and you don't get the profit from your kid once s/he turns 18 (or even before). That kind of "investment" is called slavery.



If a government makes an investment in a company, it gets part ownership of the company or, depending on the contract, on any profits. Investment is still billed as useful and the ROI may not be calculated, but it's claimed to be truly impressive.

As soon as the government starts investing in people, the relationship between the citizen and the government has changed. The government gets part ownership of the person or of the person's profits. Now, typically we don't call them profits, but that's just a matter of words--we account for allowable deductions from our revenue stream and then pay taxes on any income over what's considered somehow required for doing business. The government even uses its taxing authority to manipulate our behavior, just as it does with business. You see the only logical outcome of treating families as small revenue centers in the attitude that lack of taxation for a group for a purpose is a subsidy--which has usually meant a direct payment of money to a business. We become profit centers for a government that is a business, and that business is running the country. It's just a bit of metonymy-based induction to get to "the government is the country", just as we think of a large corporation's physical plant as that (legal abstraction of a) corporation made flesh.

A loan program that isn't targeted to investment goals but to help people is a non-profit activity. A loan program that is targeted to help the country, esp. when the country is seen as an extension of the government, is investment. I like non-profits.

[cosmicone]

15. Impressive post. n/t

[seabeckind]

16. So what is this gov't of which you speak?

You describe it as if it's some entity separate from our society.

What does tax have anything to do with it? You make it sound as if the "government" should be run like a business and look for a return on its investment.

I thought our "of, by, and for the people" was in the service business, not the profit business.

<added> The ultimate non-profit.

[valerief]

11. Govt loses 24 billion from shutdown. Perspective. nt

[seabeckind]

14. Another example of laissez faire and monopolization

The development of a new technology which is to be a benefit to all of society should be under the control of the society. It is part of the commons. Every major accomplishment in the history of the world, particularly in this country, had little return at its onset. Rail, waterways, electricity, space exploration. The private sector does not function that way. Their primary goal is return on their investment.

Of course in this case the return came in the form of an unpaid gov't loan. Which was fine from their standpoint. They had a success -- from the investor's POV.

Way past time to bury the profit model for the commons. Especially in this country. We have fallen well behind the rest of the 1st world -- that world we used lead. Now we have to wait for some private concern to figure out a way to profit from it before we see it. And even then we end up with some halfassed quality that is profitable without being prohibitive to the investors.

Education, transportation, communications, health, etc. Let the profit model be the value-added portion and paid for by those who want it and not those who are chained to it.

[grahamhgreen]

19. Do we get any patents out of it?

[Conium]

20. Tesla also makes electric cars.

Tesla pays back U.S. loan nine years early

http://www.dispatch.com/content/stories/business/2013/05/28/tesla-pays-back-u-s--loan-nine-years-early.html

[herding cats]

21. The Energy Department loan program was in total $34 billion.

Just to put this in perspective, so far the losses are a fraction of the $10 billion Congress set aside to cover losses. Including this current one, loss is still below 1/10 of the amount set aside to cover the expected losses. In other words, this isn't unexpected, or a in anyway a tragedy. Not every venture will be a success, so far there have been less failures than what was originally anticipated. Which isn't a bad thing.