U.S. to exit Fisker at hefty taxpayer loss
Detroit News Washington Bureau
Washington —The Energy Department said Tuesday it will auction off its outstanding $168 million loan to the now-closed electric vehicle manufacturer Fisker Automotive Inc., a move that will likely mean significant losses to taxpayers. It would be the second automaker to fail after receiving loans that were later sold by the government at a loss.
Peter W. Davidson, executive director of the Energy Department’s loan program office, said in a blog posting Tuesday that the department will exit Fisker, whose Karma luxury sedan was driven by celebrities such as Al Gore, Justin Bieber and Leonardo DiCaprio.
Fisker was initially was awarded $528 million from the $25 billion Advanced Vehicle Technology Manufacturing loan program, but received only $192 million. The Energy Department said it has already recouped more than $28 million from Fisker’s accounts.
“After exhausting any realistic possibility for a sale that might have protected our entire investment, the department announced today that we are auctioning the remainder of Fisker’s loan obligation, offering the best possible recovery for the taxpayer,” Davidson said Tuesday.
The auction will be Oct. 11. The winner of the auction would be in the driver’s seat to take control of the company. But the Energy Department wants a buyer to keep jobs in the U.S.
“The department will require all bids to include a commitment and business plan that promotes domestic manufacturing capabilities and related engineering for advanced technology vehicles here in the United States,” Davidson said.
The Anaheim, Calif.-based company said in November it was considering Michigan for a new technical center. It previously had a center in Pontiac and had considered buying a shuttered GM assembly plant in Pontiac in 2009 to build cars, but opted for a Delaware plant instead.
Fisker had planned to create 2,000 factory jobs in Delaware and start production by late 2012. It never opened.
Fisker sold about 2,000 plug-in hybrids worldwide, but hasn’t built a car in more than a year. In April, it did not make a $10 million loan payment to the Energy Department as it sought to find a buyer or new investor. Fisker laid off 75 percent of its staff that month.
Fisker has drawn scorn from House Republicans and former presidential candidate Mitt Romney. Republican Sens. Chuck Grassley of Iowa and John Thune of South Dakota expressed concern in February that Fisker would be sold to a Chinese buyer after reports suggested Geely Automotive and Dongfeng Motor Corp. were in the running to acquire a majority stake.
“When the federal government picks winners & losers, the American people are left on the hook,” Rep. Kevin McCarthy of California, the House’s No. 3 Republican, said Tuesday in a Twitter posting.
Earlier this month, the Energy Department sold its unpaid $50 million loan to Allen Park-based VPG to AM General for $3 million, which agreed to acquire VPG’s MV-1 wheelchair-accessible vehicles. Taxpayers lost about $42 million on that sale.
The Energy Department on Tuesday cited successes like Ford Motor Co.’s $5.9 billion loan, which helped support thousands of jobs, and Tesla’s $465 million loan that was repaid early.
From The Detroit News: http://www.detroitnews.com/article/2...#ixzz2fHkIhHJU