ABC: Is Fisker Headed for a Solyndra-Like Collapse?

"Fiscal Fail" at Delaware Way

ABC News reported yesterday, “As a major financial deadline looms, a green car company that was approved for a $529 million loan from the U.S. Energy Department is keeping quiet about whether it could be headed towards a Solyndra-like collapse, following reports the company may be preparing for bankruptcy. ‘We are not offering any official comment on the speculation around bankruptcy at this stage,’ Roger Ormisher, a spokesperson for the electric car company Fisker Automotive, told ABC News recently. Ormisher was responding to questions about reports last week that Fisker had hired a prominent law firm to advise it on possible bankruptcy proceedings. The Anaheim, Calif.-based company recently disclosed that it had furloughed non-essential U.S. workers in March . . . .”

“Fisker Automotive entered the electric car market with hefty support from the U.S. Energy Department and backing from such celebs as Justin Bieber and Leonardo DiCaprio, but the company and its high-priced Fisker Karma have continued to skid financially. If the California-based luxury carmaker goes bust, it will be the most high profile failure of an alternative energy firm backed by the Obama administration since the solar company Solyndra filed for bankruptcy in 2011.”

The ABC report elaborates, “In April 2010, Fisker started receiving payments on a loan of up to $529 million from the Department of Energy as part of the Obama administration's push to bolster alternative energy firms. . . . The loan to Fisker was part of a $1 billion bet the Energy Department made in two politically-connected California-based electric carmakers producing sporty -- and pricey -- cutting-edge autos.”

Like Solyndra, Fisker is exhibiting warning signs about its viability. ABC writes, “In October 2011, ABC News aired reports revealing that the government loan to Fisker raised concerns among industry observers and government auditors, and added to questions about the way billions of dollars in loans for smart cars and green energy companies were being awarded. At the time, Fisker was already more than a year behind rolling out its $97,000 luxury vehicle bankrolled in part with DOE money. The ABC News investigation, conducted with the Center for Public Integrity, came in the wake of the administration's failed $535 million investment in Solyndra. That company's collapse, bankruptcy and raid by FBI agents generated further interest in how the Energy Department doles out billions in highly sought after green energy seed money. Both Fisker and Obama administration officials raced to defend Fisker, but at the same time acknowledged the inherent risk involved in such start-ups. The Energy Department said it had carefully vetted loan recipients to minimize taxpayer risk. Then in May 2012, after providing nearly $200 million in loans, the Energy Department announced it had frozen payments to Fisker, saying it hired a restructuring advisor to study the terms of the agreement and assess the performance of the company. . . . But the outlook has only appeared to get worse. In December, the Wall Street Journal reported that Fisker board members had discussed the prospect of filing for bankruptcy, citing unnamed sources. Company executives responded by saying they were seeking larger partners for the small automaker.”

is only the latest of the Obama administration’s “investments” in green energy companies to be struggling. There was, of course, the well-known bankruptcy of Solyndra, which got a $535 million loan from the federal government. But also going bankrupt was Indiana-based EnerDel, which got a $119 million stimulus grant from the Energy Department. And then there was A123, which went bankrupt after receiving nearly $250 million from the Obama administration, but was then sold to a Chinese conglomerate.

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Tags: Green Jobs, Stimulus Waste, Fisker Automotive, DOE, Solyndra, A123, EnerDel, failed. Democrat energy investment To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service. Thanks!