OPINION:
Fisker Automotive, the hybrid carmaker based in Anaheim, Calif., announced Friday that it would lay off 75 percent of its workforce, a sign the onetime darling of the “greens” is sputtering toward the end of the road. This story grows ever more familiar.
Henrik Fisker designed some of the most attractive cars on the road, notably the Aston Martin DB9. So when Mr. Fisker came up an idea for his own car that would align perfectly with President Obama’s green-energy investment strategy, it seemed to be a match made in automotive heaven. Taxpayers would put up the capital and bear the risk, and the marketplace could “catch up” and accept electric cars. This is the strategy crashing into a ditch.
In 2009, Vice President Joe Biden told a crowd of politicians and union members assembled in Delaware that Fisker, with a $500 million government startup loan, would take over an abandoned General Motors plant and build a dream car. “Thanks to a real commitment by this administration, loans from the Department of Energy, the creativity of U.S. companies and the tenacity of great state partners like Delaware,” he said, “we’re on our way to helping America’s auto industry reclaim its top position in the global market.” Delaware’s “commitment” included $12.5 million in state economic development loans and $9 million to retool the abandoned plant with the promise that Fisker would hire up to 2,000 workers to manufacture the $100,000 electric-hybrid luxury car.
The company did hire workers, most of whom lived in Finland, where the Fisker Karma was actually produced. The Energy Department ultimately barred the company from drawing the remaining $336 million of the loan owing to persistent production delays. Much of the blame could be placed on Fisker’s battery maker, A123 Systems — another “green” loan recipient that went belly up.
The Energy Department’s website still praises Fisker Automotive. An Energy Department spokesman dismisses critics of the scheme of spending the people’s money on visionary domestic carmakers. “They were wrong then, and they’re wrong today. From well-established names like Ford to innovative startups like Tesla and Fisker, America’s auto industry is being reinvented, and the department’s loan program is helping play an important role.”
There’s no doubting the importance of that role. Fisker raised more than $1 billion from private investors, making it less clear why taxpayers had to chip in. It’s government loans and not private investors’ dollars that are now an anvil around the neck of the sinking company. Payment on the Energy Department loan is due on April 22, and most investors or potential buyers aren’t likely to help unless the terms of the loan are renegotiated. Henrik Fisker is gone from the company, amid speculation that he squabbled with other top executives about whether the company should spurn government subsidies and not draw on the remainder of the federal loan.
The fiasco illustrates the folly of thinking the government can create a sustainable market. If consumers wanted electric cars, automobile manufacturers would build the cars. The buyers for the six-figure hybrid were social activists, Hollywood stars who want to show they are “saving the planet” and politicians who think they’re smarter than the marketplace.The most astute observer of this phenomenon may be Bob Lutz, the former chairman of General Motors, who so admired the Fisker Karma’s exterior beauty that he special-ordered a number of the cars — without the electric motors. In their place, Mr. Lutz intends to drop a politically incorrect, 638-horsepower Corvette engine. That will drive Al Gore crazy, but taxpayers won’t be paying for them.
The Washington Times
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