“In another setback for President Obama's clean energy loan programs, the recipient of more than a half-billion dollars in federal loans is laying off workers at their Delaware and California operations [emphasis added],” Bryan Tau of Politico reports.
Fisker Automotive, a California-based electric car company, is laying off an "undisclosed number" of staff to try to reserve enough capital in order to qualify for more federal help from the Department of Energy, according to a Delaware state development official.
Wait a minute. The Fisker Automotive?
That’s right, that Fisker Automotive: a company backed by an Al Gore-associated venture capital firm that was awarded a $529 million federal loan guarantee in April, 2010.
This is the same government-assisted automaker that outsourced manufacturing jobs to Finland because, "There was no contract manufacturer in the U.S. that could actually produce our vehicle," the car company's founder and namesake told ABC News. "They don't exist here."
Now they are laying off workers in both Delaware and California.
"They're trying to preserve the cash that they have," said 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."
Before announcing the layoffs, the company was working on reopening a closed General Motors plant in Wilmington to produce vehicles — an effort the Obama administration was quick to praise.
“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 about Fisker in Delaware 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.”
“This is proof positive that our efforts to create new jobs, invest in a clean energy economy and reduce carbon pollution are working,” said Energy Secretary Steven Chu. “We are putting Americans back to work and reigniting a new Industrial Revolution that is paramount for the economic success of this country.”
To date, the company has received $193 million of the total $529 DOE loan to produce two lines of plug-in hybrid cars.
“Our loan guarantees have strict conditions in place to protect taxpayers. The Department only allows the loan to be disbursed as the company meets certain milestones and demonstrates results," DOE spokesman Damien LaVera said in a statement.
"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."
So, let's see if we got this straight:
- Fisker Automotive is given $193 million of a $529 million DOE loan to produce two lines of plug-in hybrid cars and, presumably, create jobs
- The company is unable to find a contract manufacturer in the United States, so it outsources manufacturing jobs to Finland (the company vehemently denies charges that it has used any part of the federal loan to fund manufacturing operations in Finland)
- The automaker falls behind its production schedule and experiences"delays" in its sales (i.e. poor sales), depleting its capital
- But to qualify for the rest of the $529 million loan guarantee, the company has to maintain a certain amount of capital
- Therefore, in order to meet this DOE benchmark, Fisker Automotive decides it will save money by laying off an "undisclosed number" of employees
Considering that this is yet another government-sponsored clean energy investment that has experienced layoffs, and contrary to what Energy Secretary Steven Chu's says, Fisker Automotive hardly seems like "proof positive" that the White House's efforts to create new jobs are working.
(H/T: Weasel Zippers)