Energy Dept. loses $139M in Fisker auto loan default
The Energy Department (DOE) said Friday that it will lose $139 million on its loan to electric carmaker Fisker Automotive, a development that quickly revived GOP criticism of federal green technology loan programs.
Fisker filed for bankruptcy reorganization Friday. The group Hybrid Technology, LLC purchased DOE’s loan made to Fisker for $25 million, as part of a plan aimed at eventually re-starting production of Fisker’s plug-in hybrid Karma sedan.
It’s the latest twist in the troubled saga of Fisker. The company won approval for over a half-billion dollars in DOE loans in 2009, largely for plans to manufacture a separate electric car in the U.S. That plan did not get off the ground.
DOE froze the payments in 2011 after handing out $192 million to Fisker, and the sale of the loan combined with money recouped earlier puts the department’s total loss at $139 million.
DOE loan programs have come under fierce criticism from Republicans in recent years over the 2011 collapse of the DOE-backed solar panel maker Solyndra, which had received $528 million in loans, and failure or struggles of some other federally-backed companies.
But DOE on Friday emphasized that the wider $30 billion-plus loan portfolio has performed well.
“While this result is not what anyone hoped, the $192 million disbursed to Fisker minus the $53 million recovered by the Department represents less than two percent of our advanced vehicle loans, and less than one half of one percent of our overall loan program portfolio,” a DOE official said in a statement.
Meanwhile, a senior House Republican attacked Obama administration green energy and auto financing projects in the wake of the Fisker announcement.
“Fisker’s collapse closes yet another sad chapter in DOE’s troubled portfolio. The jobs that were promised never materialized and, once again, taxpayers are on the hook for the administration’s reckless gamble,” said House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and Oversight and Investigations Subcommittee Chairman Tim Murphy (R-Pa.), in a joint statement Friday evening.
Rep. Marsha Blackburn (R-Tenn.), the vice-chairwoman of the Energy and Commerce Committee, told the Associated Press, “time after time this administration has fumbled the ball with their attempts to pick winners and losers when it comes to American energy.”
Fisker won funding under the Advanced Technology Vehicles Manufacturing loan program that was authorized in a bipartisan 2007 law but began providing loans under the Obama administration.
Solyndra and other green power projects won loan guarantees under a related, but separate, program authorized in bipartisan 2005 legislation and expanded in the 2009 stimulus law. All the loan guarantees have been issued during the Obama administration.
Hybrid Technology, LLC — described in press reports as an investor group — said its purchase of the Fisker loan is the first step in plans for an affiliate to acquire Fisker’s assets.
The plan will “eventually lead to the restarting of production and distribution of the Karma sedan, as well as the development and production of future advanced hybrid electric vehicles,” Hybrid Technology, LLC said in a news release.
Hybrid Technology is owned by Richard Li, a billionaire from Hong Kong, according to The Los Angeles Times and the Associated Press.
“[Hybrid Technology] is committed to building upon the Fisker legacy and presence in the United States as a foundation for the design and manufacture of advanced hybrid electric vehicles,” spokeswoman Caroline Langdale said.
The Karma was previously manufactured in Finland before production halted in 2012, but DOE said the plan is to bring production to the U.S.
The DOE official said Hybrid Technology, LLC has “committed to ensure the implementation of a business plan that includes moving the manufacturing of the Karma to the U.S. and commits to keeping the related engineering and design capacity in California.”
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