The U.S. Department of Energy (DOE) announced Monday that it had seized $21 million from the reserve account of “green” automaker Fisker Automotive after the company failed to make its first payment on federal loan guarantees totaling $192 million, the Daily Caller reports.
The California-based company received the guarantees as part of the 2009 “stimulus” law, which handed out $90 billion in subsidies and loan guarantees for various green-energy programs, many of which have foundered when confronted with the realities of the marketplace.
Fisker, too, has struggled throughout its brief existence. Since its inception in August 2007, the automaker has sold fewer than 2,200 cars, a third of which never left dealers’ lots. The cars that were produced — the hybrid subcompact known as the Karma (shown) — were beset with problems: They were very small; had a limited driving range under electrical power and poor gas mileage when the batteries gave out; performed poorly in testing for Consumer Reports; and — worst of all — would spontaneously burst into flames. The company finally ceased production of Karmas last year.
In March, founder and executive chairman Henrik Fisker, who designed the Karma, resigned from the company. Three weeks later Fisker Automotive laid off 75 percent of its workforce; the company is now being sued for failing to give the terminated employees 60 days’ notice and severance pay as required under federal law. Having failed to attract new investors in recent months, the automaker is now widely expected to file for bankruptcy. It recently hired the law firm of Kirkland and Ellis, which has one of the largest bankruptcy practices in the country, and the public-relations firm Sitrick and Co., which specializes in crisis management.
Henrik Fisker is among those slated to testify before the House Oversight Committee Wednesday in a hearing entitled “Green Energy Oversight: Examining the Department of Energy’s Bad Bet on Fisker Automotive.” The committee will have much to investigate, for while Fisker is largely privately funded, politics and government collaboration have played a major part in keeping it afloat for nearly six years despite its anemic performance.
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