Obama administration approves federal loan, company builds cars in Finland…

With the approval of the Obama administration, electric car company Fisker Automotive is using a $529 million dollar federal government loan to build cars in Finland.

Vice President Joseph Biden said the Energy Department’s loan to the start-up company would lead to thousands of American manufacturing jobs, but two years after the loan was announced, the company’s manufacturing jobs are limited to the electric Fisker Karma sports car being built in Finland.

“There was no contract manufacturer in the U.S. that could actually produce our vehicle,” the car company’s founder and namesake told ABC News. “They don’t exist here.”

Henrik Fisker says the U.S. tax payer money has been spent on engineering and design work that stayed in the U.S., not on the 500 manufacturing jobs that went to a rural Finnish firm, Valmet Automotive.

“We’re not in the business of failing; we’re in the business of winning. So we make the right decision for the business,” Fisker said. “That’s why we went to Finland.”

The loan to Fisker is part of a $1 billion investment the Energy Department has made in two politically connected California-based electric carmakers producing sporty pricey cutting-edge autos. One being Fisker Automotive which is backed by a venture capital firm whose partners include former Vice President Al Gore. The other, Tesla Motors​, whose prime backers include PayPal mogul Elon Musk and Google co-founders Larry Paige​ and Sergey Brin​.

An investigation by ABC News and the Center for Public Integrity’s iWatch News found that the DOE’s bet carries major risks for taxpayers, has raised concern among industry observers and government auditors, and adds to questions about the way billions of dollars in loans for smart cars and green energy companies have been awarded. Fisker is more than a year behind rolling out its $97,000 luxury vehicle bankrolled in part with DOE money. While more are promised soon, just 40 of its Karma cars have been manufactured and only two delivered to customers’ driveways, including one to movie star Leonardo DiCaprio. Tesla’s SEC filings reveal the start-up has lost money every quarter and while its federal funding is intended to help it mass produce a new $57,400 Model S sedan, the company has no experience in a project so vast.

The Department of Energy investing billions of taxpayer dollars in alternative energy has raised many red flags in the wake of the administration’s failed $535 million investment in solar panel maker Solyndra. The company’s collapse, bankruptcy and raid by FBI agents has led to many questions about how the Energy Department hands out billions in highly sought after green energy seed money.

Fisker said he apprised the Department of Energy of his decision to assemble the high-priced Karma in Finland after he could not find an American facility that could handle the work. They approved, he said, as long as he did not spend the federal loan money in Finland, something he says the company has taken care to avoid. He said the decision was made to help prevent his company from following the path of Solyndra, which exhausted nearly all of its loan money on a high-tech solar manufacturing plant in Freemont, California.

An audit this year by the Government Accountability Office criticized the Energy Department for not keeping close enough tabs on its fleet of auto loans, including those to Fisker and Tesla, to ensure that they meet benchmarks. The funding was issued under the $25 billion Advanced Technology Vehicles Manufacturing loan program, one piece of a giant umbrella of DOE loans and loan guarantees.

“DOE cannot be assured that the projects are on track to deliver the vehicles as agreed,” said the GAO report examining the department’s ATVM program. “It also means that U.S. taxpayers do not know whether they are getting what they paid for through the loans.”

The majority of the DOE funding for Fisker is earmarked for the company to develop a less costly, mass market sedan, called Project Nina. Energy officials issued the loans for a car that, even two years later, has not been publicly revealed.

 

 

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