Great news: Another green-tech stimulus recipient job flop

posted at 11:35 am on February 7, 2012 by Ed Morrissey

Last we heard from the Fisker Karma, the electric vehicle in which US taxpayers sunk $193 million so far, the loans were paying off by creating jobs … in Finland.  As it turns out, even that report was too optimistic.  With Fisker having burned through about 40% of the stimulus funds guaranteed by the Obama administration, they have suddenly run out of money — and will start ending jobs in the US rather than create them:

Fisker Automotive, the electric car company that received a half-billion dollars in Energy Department loan guarantees, announced layoffs at its Delaware production facility Monday.

The Energy Department agreed to loans totaling $528 million for two Fisker electric car projects: a luxury model — the$103,000 Karma which is on sale now — and a more affordable sedan, the Nina. …

“We have temporarily delayed work at the plant based on ongoing discussions with the DOE regarding funding for the Project Nina program. As a result, we have laid-off 26 people,” the company said in a statement Monday.

It’s never a good sign when a firm has to plead for more time by explaining that it’s searching for more private equity investment to get production rolling:

Fisker said it continues to pursue alternative funding sources. “We have successfully raised an additional $260 million of equity in late 2011, bringing the total amount of private equity financing to more than $850 million,” the company said.

The $193 million Fisker has received was for the production of its Karma line.  That’s the model whose production got moved to Finland rather than the US, where the money was supposed to create jobs.  The Karma is available for purchase, but it’s a model only affordable to the so-called 1%, unless one of the 99% plan to live in it instead of a house or condominium. Even the supposedly “more affordable” Nina would be out of range for most working Americans.  Last October, Autoblog pegged the MSRP for the Nina at $45,000, more than the Chevy Volt, which isn’t exactly selling like hotcakes at the subsidized MSRP of $32,000.  For the same money, a buyer could drive off the lot in a BMW 3 series car, one that won’t require several thousand dollars in new batteries in its first five to eight years on top of the purchase price.

Let’s assume that the Nina sells as well as the Volt, if Fisker ever starts production on it.  Their first year would have 7700 units sold for which Fisker would have received approximately $336 million in loans (the original $529 million less the $193 million for the Karma).  That comes to $43,636 in subsidies per car, or almost the entire estimated MSRP of the Nina, making the actual cost closer to $90,000.  It’s just that the taxpayer would have bought half of the car.

When Joe Biden visited the Delaware plant to promote the stimulus grant, he promised union workers about 2,000 jobs on the basis of the half-billion-dollar commitment to Fisker for the Karma and the Nina.  Right now the total from $193 million is -26 jobs, and another green-tech firm talking about the need to find new capital after missing its targets for the green-tech loans.


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It’s never a good sign when a firm has to plead for more time by explaining that it’s searching for more private equity investment to get production rolling:

If a company needs money to expand, that is usually a good investment.

If a company needs money to survive, it is usually a bad investment.

JohnGalt23 on February 7, 2012 at 11:37 AM

So, let me get this straight.

A company for whom supply and demand has been artificially inflated, and thus is having to downsize massively, has as a flagship model, the Karma.

Did someone leave the irony on?

KingGold on February 7, 2012 at 11:38 AM

What do they care? It’s not their money

Chuck Schick on February 7, 2012 at 11:40 AM

A smart Republican would be in Delaware today making a speech pointing this out. But, alas, we dont have any.

faraway on February 7, 2012 at 11:40 AM

Karma is dead? Karma is dead?

faraway on February 7, 2012 at 11:41 AM

Maybe Obama should consult with Bain Capital about his our investments.

His current investment advisers aren’t doing so well.

cozmo on February 7, 2012 at 11:42 AM

Where do I apply to get government funds for my Solar Oven start-up company?

WashJeff on February 7, 2012 at 11:44 AM

Karma’s a biznatch Biden

DHChron on February 7, 2012 at 11:44 AM

Why aren’t these stories talked about at every single GOP debate?!?

I mean really, voters need to get riled up the way they were during the 2010 elections. where is the outrage? I know the media isn’t going to talk about it, but what about us informed GOP and independent voters??

jetch on February 7, 2012 at 11:45 AM

Now I know why Obama hates “Wall St.”. They make better investments than he does.

cartooner on February 7, 2012 at 11:46 AM

Time for a HotAir “green” car…say we raise about 40 mil from Obama, split among the couple of hundred die hard posters (liberals need not apply), and then we “fail”, but keep the money.

right2bright on February 7, 2012 at 11:46 AM

King 0bama and his anti-Midas touch strikes again!!!

jukin3 on February 7, 2012 at 11:47 AM

And yet…the major media lets the clown continue with his circus!
If it was a person from another party…there would be a daily pounding, on top of a pounding. They would pyramid all of those failures…and pound on them daily until the election!

KOOLAID2 on February 7, 2012 at 11:47 AM

So people with scads of basically free money to spend as they wish without accountability managed to squander it? Huh.

If only there were some sort of economic model that could offer an alternative to these schemes, a market of sorts, where people are free to….well yeah, a free market I suppose you could call it.

Bishop on February 7, 2012 at 11:47 AM

For the same money, a buyer could drive off the lot in a BMW 3 series car, one that won’t require several thousand dollars in new batteries in its first five to eight years on top of the purchase price.

.Top gear did a funny test. The put the Stig in the prius and Clarckson in the M3. The Prius went 10 laps and the M3 matched his speed and line, guess which had better gas mileage?

Mord on February 7, 2012 at 11:47 AM

jetch on February 7, 2012 at 11:45 AM

Because its the primaries.

Why use up your best ammunition before the main target even comes onto the field?

cozmo on February 7, 2012 at 11:47 AM

Right now the total from $193 million is -26 jobs, and another green-tech firm talking about the need to find new capital after missing its targets for the green-tech loans.

So how much does that come out to per job….errr, lost?

Doughboy on February 7, 2012 at 11:48 AM

Maybe Obama should consult with Bain Capital about his our investments.

His current investment advisers aren’t doing so well.

cozmo on February 7, 2012 at 11:42 AM

Now that would be a good idea…seeing that Mitt is no longer involved.
Mitt was praising Obama for his gov. takeover and bailouts just a few weeks ago…surprised you are turning your back on Mitt so quickly.

right2bright on February 7, 2012 at 11:48 AM

Time for a HotAir “green” car…say we raise about 40 mil from Obama, split among the couple of hundred die hard posters (liberals need not apply), and then we “fail”, but keep the money.

right2bright on February 7, 2012 at 11:46 AM

Isn’t that called “The Producers”?

JohnGalt23 on February 7, 2012 at 11:49 AM

Fisker said it continues to pursue alternative funding sources.

 
Alternative energy requires alternative funding.
 
Awesome.

rogerb on February 7, 2012 at 11:49 AM

Never before in the history of the world has so much wealth been squandered. Utterly destroyed. How much have these syndicalists set back true innovation and progress thru their wanton destruction of capital?

tom daschle concerned on February 7, 2012 at 11:49 AM

Nobody in the current administration has been seen driving these cars either. Not good enough for them but they’ll use taxpayer money to force you to buy one. Even DNC Chair Debbie Blabbermouth Schultz (who wanted people to buy American) has an “Infinity”. Which is about as long as it’s going to take to pay off all these bills.

LeftCoastRight on February 7, 2012 at 11:50 AM

SSDD
God help us all if ØbaJobi is re-elected.
Someone needs to pay for this malfeasance. I’m sick of footing the damn bill.

~(Ä)~

Karl Magnus on February 7, 2012 at 11:51 AM

Why aren’t these stories talked about at every single GOP debate?!?

I mean really, voters need to get riled up the way they were during the 2010 elections. where is the outrage? I know the media isn’t going to talk about it, but what about us informed GOP and independent voters??

jetch on February 7, 2012 at 11:45 AM

Because the media controls the process and wants to ask about condoms and crackers! Don’t forget about the ‘masses”.

KOOLAID2 on February 7, 2012 at 11:51 AM

Dear leader 0 for 3 now?

cmsinaz on February 7, 2012 at 11:52 AM

MSM: *crickets*
White House: *crickets*
Enviro-nuts: *crickets*
And, unfortunately…
GOP: *crickets*

KS Rex on February 7, 2012 at 11:52 AM

+100 Chuck

cmsinaz on February 7, 2012 at 11:53 AM

Green energy schemes are worse than a waste. Look at Europe. The costly, inept, grid destabilizing green schemes have played a major role in the massive debt and brink of bankruptcy. You can’t just pour trillions of Euros down the drain in economically unproductive subsidies.
Look specifically at the tale behind the disaster looming for Germany. A very good read: http://notrickszone.com/2012/01/25/energy-expert-germanys-renewable-energy-transition-will-fail-spectacularly-heavily-damaging-the-economy/

anotherJoe on February 7, 2012 at 11:54 AM

So, let me get this straight.

A company for whom supply and demand has been artificially inflated, and thus is having to downsize massively, has as a flagship model, the Karma.

Did someone leave the irony on?

KingGold on February 7, 2012 at 11:38 AM

Heh!

hawksruleva on February 7, 2012 at 11:57 AM

Can we get everyone to start putting the words “green tech” in quotes…like I just did? As in, so-called “Green Technology.”

All these plug-in cars are powered by 50% coal in the US. Last time I talked to my one liberal friend, coal ain’t green.

Youngs98 on February 7, 2012 at 11:57 AM

And, unfortunately…
GOP: *crickets*

KS Rex on February 7, 2012 at 11:52 AM

Mitt and Newt were too busy attacking each others’ investment strategies to notice.

hawksruleva on February 7, 2012 at 11:57 AM

Last October, Autoblog pegged the MSRP for the Nina at $45,000, more than the Chevy Volt, which isn’t exactly selling like hotcakes at the subsidized MSRP of $32,000.

i see what you did right thar’…../

ted c on February 7, 2012 at 11:58 AM

And you wonder why more and more people resist paying taxes. It doesn’t make sense paying taxes to an administration that is this inept.

NapaConservative on February 7, 2012 at 11:59 AM

Given the ‘investment’ by US taxpayers, can’t they at least name the car The Obama?

GarandFan on February 7, 2012 at 12:00 PM

And let’s not forget some of the fat cat pols with their fingers deep in the tax payers’ pockets for this scam scam: former V.P. (and high priest of the Church of Glowbull Warming), Al Gore, plus John Doerr, who just happens to sit on President Barack Obama’s economic advisory board. Both men are venture capitalists in Fisker Automotive. Plus, Delaware is Joe Biden’s home state.

Fisker Automotive was started in 2007 and has yet to sell a single car.

Green = tax payers get screwed.

locomotivebreath1901 on February 7, 2012 at 12:00 PM

you just couldn’t write this stuff any funnier….

Karma? Solyndra? Lightsquared?

Bad Karma…Solyndra and Icarus… Lightsquared goes dark….

ah well

ted c on February 7, 2012 at 12:01 PM

Man you guys are loosing your touch!!!
where is the word unexpectedly??????

ColdWarrior57 on February 7, 2012 at 12:03 PM

What do they care? It’s not their money

Chuck Schick on February 7, 2012 at 11:40 AM

Expect things to continue like this for years until the people vote in enough change agents.

its quite obvious that 2010 was not enough. theyve gotten rolled or even worse, joined in on it in some cases.

cougar on February 7, 2012 at 12:03 PM

What Edmunds says:

The all-new 2012 Fisker Karma expands what a plug-in hybrid can be, as it promises not only fuel efficiency but also exclusivity, luxury and performance.

Pros
Plug-in-hybrid fuel economy; sharp handling; head-turning style; earth-friendly cabin materials.

Cons
Stiff ride; unrefined sound from gasoline generator engine; tiny trunk; only four seats; poor rearward visibility.

Sounds like they’ll be flying off the showroom floors.
/

TXUS on February 7, 2012 at 12:04 PM

WTF with our tax dollars….

(winning the future) YMMV

Dr. Demento on February 7, 2012 at 12:06 PM

They will build no cars,
Fisker, Aptera, Karma.
It’s just vaporware.

Produce an interesting-looking prototype, get a few government grants, and bilk private investors looking to cash in on the next big thing.

But the last thing any of these companies want to do is actually produce automobiles. Fisker’s solution to this problem is to make the vehicles so expensive that nobody will ever want to buy one.

Eventually it all collapses. But the injection of government money winds up giving investors false confidence, and the eventual collapse is much, much worse.

Haiku Guy on February 7, 2012 at 12:07 PM

from the urban dictionary (I kid you NOT)
*****
fisker

(Abbrebiation)
Full definition: f***ing ignorant,
1. Yo, you are a fisker
2. You have no right to say anything, you are a fisker.

*****

ted c on February 7, 2012 at 12:09 PM

Hey Midwestprincesse! HAPPY BIRTHDAY! young lady.

KOOLAID2 on February 7, 2012 at 12:10 PM

I wish we could hold Obama personally responsible for wasting OUR money. That SOB should pay back every dime of that money.

crosspatch on February 7, 2012 at 12:12 PM

Why aren’t these stories talked about at every single GOP debate?!?

The GOP desperately needs to get hold of the questioner (somehow called “moderator”) function at its own debates, else every question will be designed (1) to weaken the candidates, (2) to initiate in-fighting among the candidates, or (3) to make it impossible for the candidates to speak about any winning GOP issue by continually forcing them down byroads of every sort.

kunegetikos on February 7, 2012 at 12:17 PM

Fisker fisked our fisc and Karma is a b!+c#.

Steve Z on February 7, 2012 at 12:22 PM

Finland has a new conservative leader, as of last weekend.

The U.S. will not have one.

Schadenfreude on February 7, 2012 at 12:27 PM

Can we say that Fisker Automotive is “Finnished?”

bw222 on February 7, 2012 at 12:33 PM

Ah well, it’s not like we’re short of money or anything.

NoDonkey on February 7, 2012 at 12:34 PM

Definitely bad karma. Needs some bad press. crickets from LSM.

IrishEyes on February 7, 2012 at 12:38 PM

And you wonder why more and more people terrorists resist paying taxes. It doesn’t make sense paying taxes to an administration that is this inept.

NapaConservative on February 7, 2012 at 11:59 AM

FIFY

Ditkaca on February 7, 2012 at 12:44 PM

King 0bama and his anti-Midas touch strikes again!!!

jukin3 on February 7, 2012 at 11:47 AM

Nope, he has the Midas touch, Everything he touches turns into a Muffler!

D-fusit on February 7, 2012 at 12:45 PM

That plant in Deleware is where my car was built. Here’s a picture of it:

2007 Saturn SKY Redline

But when GM became Government Motors, the Saturn division (being non-union) had to be disposed of. So that was the end of a sweet little turbocharged 2-seat roadster that had robust power, was a heck of a lot of fun to drive, and rated 31 mpg! MSRP was $29,550 in 2006.

On most days when that car comes out of the garage, it still gets comments about how great it looks – and that’s now that it is five years old.

But instead of building desirable, fuel-efficient cars that people want to buy from a division of GM that people were fiercely loyal to, now we’ve closed down the non-union division and are spending money to not build cars that people don’t want not in America – all at taxpayer expense.

Brilliant!

JohnD13 on February 7, 2012 at 12:51 PM

But wait, this is a GOOD thing!! All those people going on unemployment will stimulate the economy – Nancy said so….

dentarthurdent on February 7, 2012 at 12:53 PM

As far as I’m concerned, Fisker can go to Hellsinki.

Oh, wait…

NapaConservative on February 7, 2012 at 12:54 PM

But when GM became Government Motors, the Saturn division (being non-union) had to be disposed of. So that was the end of a sweet little turbocharged 2-seat roadster that had robust power, was a heck of a lot of fun to drive, and rated 31 mpg! MSRP was $29,550 in 2006.

JohnD13 on February 7, 2012 at 12:51 PM

I used to work for one of Saturn’s sales promotion agencies. Actually, Saturn was unionized, but just had a different contract and was more cooperative than the rest of GM.

http://articles.latimes.com/1999/feb/25/business/fi-11486

The interesting thing is that as soon as a nameplate came up with some decent vehicles, GM dropped it.

Oldsmobile: Alero and Intrigue (many of which you still see on the road) and Bravado

Saturn: Vue, Outlook, Aura and Sky

Pontiac: G6, G5, G8 and Solstice

bw222 on February 7, 2012 at 1:09 PM

So that was the end of a sweet little turbocharged 2-seat roadster that had robust power, was a heck of a lot of fun to drive, and rated 31 mpg! MSRP was $29,550 in 2006.
 
JohnD13 on February 7, 2012 at 12:51 PM

 
Its big problem was that GM lost ~$10,000 on every one of those.
 
I’m not saying it’s the only reason, but that’s bound to be an enormous motivation to halt production. It never should’ve been priced so cheaply to begin with, but they were trying to undercut BMW and MB and lure buyers away from Mazda.
 
All three of which you can buy today, interestingly.

rogerb on February 7, 2012 at 1:16 PM

Car and Driver has a road test of the $119K version of the Karma in its March, 2012 issue. The reviewer likes the looks, technology and generally the way it drives, but thinks the car is too heavy, and is “… not a rational choice.”

Here are a couple of excerpts:

Even in sport mode, the Karma is not particularly nippy, taking 6.1 seconds to reach 60 mph, with the engine furiously cranking the generator and sounding like an old man snoring. Acceleration tapers off considerably after 80 mph, slowing to the rate of “barely detectable” as it approaches the 125-mph speed limiter. In stealth mode, it’s 1.4 seconds slower to 60.

Still, in any mode, the Karma has instant torque and is spry enough to jackrabbit through traffic. The naturally weighted electrohydraulic steering transmits discernible feedback and produces assertive directional changes. It even shames some cars currently wearing blue-and-white propeller badges—it’s that good. The Karma’s only tactile shortcoming is its brakes, which are powerful but a bit unnatural feeling, with several discrete steps of engagement.

Anyone who buys a Karma in the next couple of years is a test pilot as much as a customer. The company has already recalled and fixed 239 cars for improperly positioned hose clamps in the battery’s cooling system, which could lead to a fire. However, our development car showed precious few teething issues: some wind noise around a passenger-side window and a little driveline shudder. Also, the panel gaps are bigger and the alignments less precise than Herr Benz or Lexus-san would allow.

The Karma is not a rational choice. The Mercedes-Benz S-class hybrid is cheaper, the Lexus LS600h better built. An all-wheeldrive Porsche Panamera V-6 we tested was faster to 60 mph by more than a second and $20,000 cheaper, and its fuel economy was not much worse than the Fisker’s. At this stage in the Fisker’s life, the Porsche would undoubtedly be more reliable.

http://www.caranddriver.com/reviews/2012-fisker-karma-ecochic-road-test-review

Reno_Dave on February 7, 2012 at 1:20 PM

If only they had run a two-minute Super Bowl ad with tax dollars!

PatMac on February 7, 2012 at 1:20 PM

What do they care? It’s not their money

Chuck Schick on February 7, 2012 at 11:40 AM

Of course the don’t. In fact, I’m sure they stashed some of that $193 billion for administration funding, and will divide it all up as bonus’ when they file bankruptcy.

stacman on February 7, 2012 at 1:21 PM

Jobs not materialized. Recently I read that more than 1 million Americans lost work in January.

But no attention paid to this figure: 87.9 Million Souls. We don’t know what that figure should be, how many have left employment and how many are looking and how many don’t want to work.

1.2 million people dropped out of the labor force in one month! So as the labor force increased from 153.9 million to 154.4 million, the non institutional population increased by 242.3 million meaning, those not in the labor force surged from 86.7 million to 87.9 million.

From the Bureau of Labor statistics, not verified by me. Lazy.

http://www.zerohedge.com/news/record-12-million-people-fall-out-labor-force-one-month-labor-force-participation-rate-tumbles-

Just a different way to look at numbers, and think about them.
There are 313 million Americans.

Fleuries on February 7, 2012 at 1:23 PM

This was a great investment story. One million dollars in democrat campaign contributions returned 500 million dollars in funds to play “game the govt.” with and you will not be prosecuted for fraud because the whole administration was in on the scam.

dunce on February 7, 2012 at 1:31 PM

This administration continually proves that people aren’t as careful with other peoples money as they are their own.

Maybe one day they will have enough proof to learn that lesson.

esnap on February 7, 2012 at 1:32 PM

Is anyone really surprised that a car called a Karma, which is close-in-name-relation to the Karmann Ghia, has failed miserably?

Rufus on February 7, 2012 at 1:33 PM

smart Republican would be in Delaware today making a speech pointing this out. But, alas, we dont have any.

faraway on February 7, 2012 at 11:40 AM

No other comments here matter. faraway hit the nail on the head. We need Jim DeMint!

Strike Twice on February 7, 2012 at 1:36 PM

Add one more to the massive “green” sinkhole of FAILED companies headed into bankruptcy by OBOZO crony capitalists: Solyndra, Evergreen Energy, Beacon Power, Ener1, Amonix,…..

American taxpayers get shafted while OBOZO’s bundlers and cronies walk away with BILLIONS of our tax dollars (minus the share of the loot they kick-back to the OBOZO campaign.)

TeaPartyNation on February 7, 2012 at 1:47 PM

Cut the price. Sell it as the Dodge Vapor.

seven on February 7, 2012 at 1:49 PM

Is anyone really surprised that a car called a Karma, which is close-in-name-relation to the Karmann Ghia, has failed miserably?

Rufus on February 7, 2012 at 1:33 PM

Fisker Karma Gaia?

ted c on February 7, 2012 at 1:57 PM

Is it halftime in Finland yet?

ted c on February 7, 2012 at 1:59 PM

Time for a HotAir “green” car…say we raise about 40 mil from Obama, split among the couple of hundred die hard posters (liberals need not apply), and then we “fail”, but keep the money.

right2bright on February 7, 2012 at 11:46 AM

I saw that movie. “The Producers,” by Mel Brooks.

“Springtime, for Hitler,
and Germany………”

iurockhead on February 7, 2012 at 2:49 PM

No such thing as a “green” electric car. Such a creature will not exist for the foreseeable future no matter how much money is pumped into the technology because ultimately they are all coal-powered.

AttaBoyLuther on February 7, 2012 at 3:46 PM

….but…..

….socialism is utopia?

Butthurt0bama. Let’s see how many stupid people we really have in this country willing to give this idiotic liberal progressive socialist another 4 years.

Wolfmoon on February 7, 2012 at 4:03 PM

Cut the price. Sell it as the Dodge Vapor.

seven on February 7, 2012 at 1:49 PM

LOL Love it!! 2 green thumbs up!!!

dentarthurdent on February 7, 2012 at 4:10 PM

By the time the GOP wannabes get around to making some noise about this it will be “OLD NEWS”.

They should forget about beating each other up and start beating Obozo with some of this stuff!

belad on February 7, 2012 at 4:35 PM

Remember the bumper sticker “My Karma just ran over your Dogma”? I think in this case it’s more apt to say “My Dogma just peed on your Karma”.

BillH on February 7, 2012 at 4:54 PM

Do you hear that? That’s the sounds of crickets in the background, louder than the media, which won’t report yet another Barack failure.

madmonkphotog on February 7, 2012 at 7:02 PM

Time for a HotAir “green” car…say we raise about 40 mil from Obama, split among the couple of hundred die hard posters (liberals need not apply), and then we “fail”, but keep the money.

right2bright on February 7, 2012 at 11:46 AM

Wait…didn’t we do that already?
I thought that was what the Iraq war was for? Didn’t you get the memo about starting a defense contracting Co?
Well, sorry…you didn’t get a piece of the $Trillion$ clusterf*ck. Maybe Rummy or Cheney will split theirs with you?

greataunty on February 7, 2012 at 9:01 PM

Is it halftime in Finland yet?

ted c on February 7, 2012 at 1:59 PM

Funny!

KOOLAID2 on February 7, 2012 at 11:28 PM

Why aren’t these stories talked about at every single GOP debate?!?
The GOP desperately needs to get hold of the questioner (somehow called “moderator”) function at its own debates, else every question will be designed (1) to weaken the candidates, (2) to initiate in-fighting among the candidates, or (3) to make it impossible for the candidates to speak about any winning GOP issue by continually forcing them down byroads of every sort.

kunegetikos on February 7, 2012 at 12:17 PM

absolutly. They need to stop playing nice and sweep the leg and go for the throat.

newportmike on February 8, 2012 at 10:12 AM