If that spare $103,000 has been burning a hole in your pocket waiting for delivery of a svelte new Fisker Karma, you’ll have to find something else to spend it on, for it looks as if there aren’t going to be any more of these plug-in hybrid electrics of which President Obama has been so fond.
At least there won’t be any unless Fisker can find $20 million by today with which to pay its overdue federal loan, as well a find a lot more to fire up production again. Fisker Automotive ceased production last July after turning out 2,500 automobiles, from a contract plant in Finland.
Earlier this month it laid off three-fourths of the work force at its plant in Anaheim, California, which had yet to build an automobile.
Fisker is the latest in a list of bad bets the Obama Administration has made in trying to become the venture capitalist for “clean energy” in order to replace fossil fuels. Solyndra, a maker of solar panels, was the first conspicuous failure, going out of business owing the government half-a-billion dollars. A123 Systems, a Massachusetts company that was to be Fisker’s primary battery supplier, then filed for bankruptcy and has since been purchased by a Chinese company.
Founded in 2007 by Henrik Fisker, a designer of sports car, Fisker was always in need of money. By mid-2009 it had arranged for a $529 million line of credit at the Department of Energy. Mr. Obama had designated Stephen Chu, his Secretary of Energy, as venture-capitalist-in-chief. Mr. Chu’s qualifications consisted of his career as an academic physicist.
With much fanfare, Fisker held an announcement ceremony in late October 2009 that it would pay $20 million for a former General Motors plant in Wilmington, Delaware and invest another $18 million in retooling it. The ubiquitous and ever-cheerful Joe Biden was on hand to laud the good news. Between the DOE money and $21 million from the State of Delaware it looked as if state and federal taxpayers were going into the luxury car-building business for which there was no known market. Nevertheless, Fisker confidently predicted it would be producing 15,000 cars a year.
It tried, to no avail, to get two Chinese automobile companies to make big investments in the new operation.
By December 2010, the DOE knew that Fisker wasn’t meeting various milestone payments on its loan. In the 20 months between the Delaware ceremony and June 2011, when the feds froze funds, Fisker had drawn another $193 million from its government line of credit. Fisker’s minders were either asleep at the switch or turning the other cheek. Once funds were frozen, Fisker hired a company in Finland to produce cars. So much for job growth in the United States!
With meager production stopped and most of its work force dismissed, Fisker then hired a major law firm to help it find new investors or file for bankruptcy. The witching hour will come today when a $20 million payment is due on the federal loan. If Fisker can’t pay, it’s bankruptcy for the Karma. In that case, since most of Fisker’s equipment and property is pledged as collateral on the federal loan, Uncle Sam — or, more to the point, Uncle Barack — will once again be presiding over a fire sale of used goods.