Taxpayers Loan Money To Build Cars. Where?
ABC News reported yesterday that “an electric car company that received a $529 million federal government loan guarantee is assembling its first line of cars in Finland, saying it could not find a facility in the United States capable of doing the work.” ABC News added:
“The loan to Fisker is part of a $1 billion bet the Energy Department has made in two politically connected California-based electric carmakers producing sporty -- and pricey -- cutting-edge autos. Fisker Automotive, backed by a powerhouse venture capital firm whose partners include former Vice President Al Gore, predicts it will eventually be churning out tens of thousands of electric sports sedans at the shuttered GM factory it bought in Delaware. And Tesla Motors, whose prime backers include PayPal mogul Elon Musk and Google co-founders Larry Page and Sergey Brin, says it will do the same in a massive facility tooling up in Silicon Valley.”
The news report points out “(a) key question, experts and investigators say, is whether another Solyndra is in the offing. The response:
“In interviews, executives with Tesla and Fisker said comparisons to Solyndra are unfounded. Each said the government's investments will ultimately pay off by supporting a fleet of electric cars that will ease the nation's dependence on fuel and benefit the environment.
"It's absolutely a worthwhile risk," said Diarmuid O'Connell, vice president of corporate and business development for Tesla Motors. "I absolutely believe it was a good bet for American taxpayers." Tesla has said its mass production of the sedan will ultimately lead to profitability.”
The article includes a link to “the Energy Department’s defense of the auto loan program.”
In its weekend editorial about the Fisker loan, Green Energy's Bad Karma, Investor's Business Daily calls it a "boondoggle," and concludes:
"The road to national bankruptcy is being paved by this administration with its crony capitalism, and we are being driven into the ditch with an electric car."
The real question, however, should be why government is choosing winners and losers with taxpayer dollars. That is not how a capitalist, free market system should operate.
UPDATE (10/22/11): In a blog entry today, American Thinker takes note of a Washington Post story (link provided) "about the failures that have marred Fisker's founding," e.g., the company co-founder admitting that "yes, we did have some delays . . . But this is completely different. You can't compare at all."