‘Green Energy’ Loan Beneficiary Fisker Automotive Cuts Jobs

Fisker received $529 million in taxpayer funding

February 7, 2012

President Obama’s green jobs initiative hit another pothole Monday when an electric car company that received more than half a billion dollars in Department of Energy loans announced it was conducting layoffs.

A Delaware state development official told the News Journal that Fisker Automotive, a California-based electric car company, is laying off employees to reserve enough capital to qualify for more aid from the DOE.

"They're trying to preserve the cash that they have," Alan Levin told the News Journal. "And unfortunately, until they meet the milestone that DOE continues to set … they're not able to access the additional capital that they need."

The company received $529 million in loans to produce two lines of plug-in hybrid cars. The DOE said Fisker’s delays were "common," and it will continue to work with the company.

"Our loan guarantees have strict conditions in place to protect taxpayers," a DOE spokesperson told Bloomberg. "The Department only allows the loan to be disbursed as the company meets certain milestones and demonstrates results. As has been widely reported, Fisker has experienced some delays in its sales and production schedule—which is common for start-ups. As Fisker works through those issues and incorporates lessons learned from the production of the Karma, the Department is working with Fisker to review a revised business plan and determine the best path forward so the company can meet its benchmarks, produce cars, and employ workers here in America."

The Fisker announcement is yet another item in a string of unmet goals and disappointments for the Obama administration’s green jobs initiative. The most prominent—and costly—was the bankruptcy of Solyndra, a solar panel company that received $535 million in DOE loans.

Other green energy companies have followed. Beacon Power, the recipient of a $43 million DOE loan guarantee, announced bankruptcy in October 2011. Ener1 Inc., which owns a company that received a $118 million DOE grant to make electric-car batteries, filed for bankruptcy in January. Another solar company, Amonix, received a tax credit worth roughly $6 million for a new facility in Las Vegas, but it recently announced it was laying off about 200 workers, almost two thirds of its workforce.

This is not the first time Fisker Automotive has been in the news. An ABC News report last October discovered that Fisker was using its federal loans to produce cars in Finland. Company officials said "there was no contract manufacturer in the U.S. that could actually produce our vehicle."

At the time of their loan announcements, though, the companies were lauded by the Obama administration as the future of the American manufacturing industry.

"While some wanted to write off America’s auto industry, we said no. We knew that we needed to do something different—in Delaware and all across the nation," Vice President Joe Biden said on the opening of the Fisker facility in 2009. "We understood a new chapter had to be written, a new chapter in which we strengthen American manufacturing by investing in innovation. 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—we’re on our way to helping America’s auto industry reclaim its top position in the global market."