4 ms·

Car Company Gets U.S. Loan, Builds Cars In Finland

41 points by hariis 15y ago

TMK 15y ago
Yahoo. More work here for vehicle builders!
hariis 15y ago
Considering this, I think it is a good move, "He said the decision, ultimately, was to help prevent his company from following the path of Solyndra, which exhausted nearly all of its loan money on a high-tech solar manufacturing plant in Freemont, California. "
- OstiaAntica 15y ago
  Fisker's other plant is in Joe Biden's Delaware.
jdherg 15y ago
Ish. According to a response article* , the DOE loan is earmarked to only be used for spending within the US. The company in question also has a Delaware plant that they bought from GM and are in the process of hiring for and upgrading. * ( http://www.grist.org/cleantech/2011-10-21-the-facts-on-fisker-the-medias-latest-faux-scandal http://www.grist.org/cleantech/2011-10-21-the-facts-on-fiske... )
tomfakes 15y ago
This headline could be changed to be: Car maker builds cars in Finland, gets US loan guarantee to build cars in US and create US jobs Maybe it's a bit long for a headline This news is also 2 years old!
- hugh3 15y ago
  What is a loan guarantee, anyway? Oh, I looked it up. Apparently it's an assumption of the risk if the company defaults. So if I'm understanding this correctly, from the US Government's point of view it has all the risk of giving them a loan (we're on the hook if they default), with none of the upside (if they pay it back we don't get the interest). Right?
  - brown9-2 15y ago
    Well the upside is that the lender develops successful technology that has a big impact on the economy and the movement away from reliance on oil. It's subsidized research.
    - hugh3 15y ago
      It's badly subsidized research. Compare to, say, the budget of the National Renewable Energy Laboratory in Golden, Colorado. For five hundred million dollars, you can get, say, five thousand man-years worth of actual research. As opposed to a business that makes a few funny-looking sports cars for rich people and then goes broke.
    - OstiaAntica 15y ago
      It is corruption, a form of "venture socialism" where politically connected donors get money with no-strings-attached. It's heads I win, tails, the taxpayer loses. This form of government-driven investment is a dramatic departure from 200 years of American tradition. Nobody really noticed because a lot of these programs were created by George W Bush, with Democratic support, and the media cheerleading anything "green".
      - Retric 15y ago
        There are plenty of examples of these types of government backed deals. Disneyland being one of the most famous that nobody talks about but the tradition predates 'corporations' with the 'East India Company' being the both the first example of a large multi-national company and probably the most blatant example. Some of this is infrastructure like oil pipelines, but homestead land grants are both classic American expansionism and free handouts at the same time.
        OstiaAntica 15y ago
        You are mistaken. Disneyland is a classic private entrepreneurial tale. Walt Disney sold his home to finance the park. http://www.mackinac.org/7164 http://www.mackinac.org/7164 Homestead land grants cost taxpayers nothing and went to small family farmers. That's nothing like half-billion dollar taxpayer loans directed by politicians in Washington.
hugh3 15y ago
I have moderately high hopes for Tesla, but I really can't see Fisker being a success. It's weird-looking, expensive ($100K), has a very limited electric range (32 miles) and is incredibly fuel-inefficient (20mpg) once the battery runs out. Furthermore, unlike Tesla, they don't seem to have a firm plan to proceed from a low-volume luxury model to a higher-volume cheaper model. Besides, Tesla seems to have the rather limited "I'm a rich dude who wants to show how much I care about the environment by driving around in an expensive electric car" market sewn up pretty well. And the Nissan Leaf and Chevy Volt are far cheaper, generally better, and I'd trust 'em a lot more. The only real question is how many Karmas will get built before Fisker goes bankrupt taking $528 million of US taxpayer money with it. Car manufacturing is a really hard business to break into. If you look at the world's big car companies, they've practically all been around since the 1920s, and possibly slightly before. Kia was founded in 1944. I can't think of any companies (aside from offshoots of existing car or related motorized equipment companies) that have been sucessfully founded since the end of WW2.
- vaksel 15y ago
  The only one I can think of is Lotus...founded in late 50s. The others Land Rover, Hummer, MINI etc, were all bought by others. Tata also counts...but they are part of a conglomerate that's been in business since mid 1800s
- tomfakes 15y ago
  I am willing to stand up to be a customer of Fisker, but not of Tesla. I have places I go that are > 200 miles from home. I want to drive my fun car to these places. The Tesla can't do this. I can never be a customer of Tesla's with this restriction. I will be buying the convertible Fisker Karma if they ever get to the point of selling it!
  - hugh3 15y ago
    You'd be much better off getting, say, a Nissan Leaf for local journeys and a Porsche Boxster (or whatever fun car you like) for longer trips. You'll have better fuel economy and about $20K in change.
jakeonthemove 15y ago
I'd seriously consider getting a mid-sized electric SUV, but these small sport cars are just plain useless. However, I understand that for novel products like electric cars it's best to start by marketing them to people who can afford them and who can influence others to buy them... And the headline is just misleading (like most headlines on Yahoo News): not only did the company say they've spent the money in the US, they actually can't spend them outside the country...
pg 15y ago
A good example of why companies should avoid taking government money if they can: even if the government doesn't impose a lot of restrictions on you upfront, the press will retroactively.
- tomjen3 15y ago
  Does it matter? I mean sure some people will hate you but properly not enough to lynch you. I would it imagine it would be worse for a start-up to be unknown that to have free publicity, even if it was negative.
  - pg 15y ago
    I don't know how much it matters, to be honest. Depends how big a distraction it is for the company. E.g. I'd guess this news story is not the last they'll hear about it. Republicans will presumably use this as a stick to beat the administration with.
    - thrill 15y ago
      Should they not?
      - pg 15y ago
        I don't know that either. I don't know any details of this case. My point was just that it will be a distraction for the company if they do.
- OstiaAntica 15y ago
  pg, we need a clearer voice against these types of loan schemes. In the Fisker deal, the Qatar state put up a fraction of the U.S. govt investment, and is getting equity in return. The U.S. taxpayer has nothing but downside and is actually underwriting the risk in Fisker for the venture investment of players like Kleiner Perkins, Qatar, and Palo Alto Investments. It is corrupt.

41 points by hariis 15y ago

TMK 15y ago

Yahoo. More work here for vehicle builders!

Considering this, I think it is a good move, "He said the decision, ultimately, was to help prevent his company from following the path of Solyndra, which exhausted nearly all of its loan money on a high-tech solar manufacturing plant in Freemont, California. "

OstiaAntica 15y ago
Fisker's other plant is in Joe Biden's Delaware.

jdherg 15y ago

Ish. According to a response article* , the DOE loan is earmarked to only be used for spending within the US. The company in question also has a Delaware plant that they bought from GM and are in the process of hiring for and upgrading. * ( http://www.grist.org/cleantech/2011-10-21-the-facts-on-fisker-the-medias-latest-faux-scandal http://www.grist.org/cleantech/2011-10-21-the-facts-on-fiske... )

tomfakes 15y ago

This headline could be changed to be: Car maker builds cars in Finland, gets US loan guarantee to build cars in US and create US jobs Maybe it's a bit long for a headline This news is also 2 years old!

hugh3 15y ago
What is a loan guarantee, anyway? Oh, I looked it up. Apparently it's an assumption of the risk if the company defaults. So if I'm understanding this correctly, from the US Government's point of view it has all the risk of giving them a loan (we're on the hook if they default), with none of the upside (if they pay it back we don't get the interest). Right?
- brown9-2 15y ago
  Well the upside is that the lender develops successful technology that has a big impact on the economy and the movement away from reliance on oil. It's subsidized research.
  - hugh3 15y ago
    It's badly subsidized research. Compare to, say, the budget of the National Renewable Energy Laboratory in Golden, Colorado. For five hundred million dollars, you can get, say, five thousand man-years worth of actual research. As opposed to a business that makes a few funny-looking sports cars for rich people and then goes broke.
  - OstiaAntica 15y ago
    It is corruption, a form of "venture socialism" where politically connected donors get money with no-strings-attached. It's heads I win, tails, the taxpayer loses. This form of government-driven investment is a dramatic departure from 200 years of American tradition. Nobody really noticed because a lot of these programs were created by George W Bush, with Democratic support, and the media cheerleading anything "green".
    - Retric 15y ago
      There are plenty of examples of these types of government backed deals. Disneyland being one of the most famous that nobody talks about but the tradition predates 'corporations' with the 'East India Company' being the both the first example of a large multi-national company and probably the most blatant example. Some of this is infrastructure like oil pipelines, but homestead land grants are both classic American expansionism and free handouts at the same time.
      - OstiaAntica 15y ago
        You are mistaken. Disneyland is a classic private entrepreneurial tale. Walt Disney sold his home to finance the park. http://www.mackinac.org/7164 http://www.mackinac.org/7164 Homestead land grants cost taxpayers nothing and went to small family farmers. That's nothing like half-billion dollar taxpayer loans directed by politicians in Washington.

hugh3 15y ago

I have moderately high hopes for Tesla, but I really can't see Fisker being a success. It's weird-looking, expensive ($100K), has a very limited electric range (32 miles) and is incredibly fuel-inefficient (20mpg) once the battery runs out. Furthermore, unlike Tesla, they don't seem to have a firm plan to proceed from a low-volume luxury model to a higher-volume cheaper model. Besides, Tesla seems to have the rather limited "I'm a rich dude who wants to show how much I care about the environment by driving around in an expensive electric car" market sewn up pretty well. And the Nissan Leaf and Chevy Volt are far cheaper, generally better, and I'd trust 'em a lot more. The only real question is how many Karmas will get built before Fisker goes bankrupt taking $528 million of US taxpayer money with it. Car manufacturing is a really hard business to break into. If you look at the world's big car companies, they've practically all been around since the 1920s, and possibly slightly before. Kia was founded in 1944. I can't think of any companies (aside from offshoots of existing car or related motorized equipment companies) that have been sucessfully founded since the end of WW2.

vaksel 15y ago
The only one I can think of is Lotus...founded in late 50s. The others Land Rover, Hummer, MINI etc, were all bought by others. Tata also counts...but they are part of a conglomerate that's been in business since mid 1800s
tomfakes 15y ago
I am willing to stand up to be a customer of Fisker, but not of Tesla. I have places I go that are > 200 miles from home. I want to drive my fun car to these places. The Tesla can't do this. I can never be a customer of Tesla's with this restriction. I will be buying the convertible Fisker Karma if they ever get to the point of selling it!
- hugh3 15y ago
  You'd be much better off getting, say, a Nissan Leaf for local journeys and a Porsche Boxster (or whatever fun car you like) for longer trips. You'll have better fuel economy and about $20K in change.

jakeonthemove 15y ago

I'd seriously consider getting a mid-sized electric SUV, but these small sport cars are just plain useless. However, I understand that for novel products like electric cars it's best to start by marketing them to people who can afford them and who can influence others to buy them... And the headline is just misleading (like most headlines on Yahoo News): not only did the company say they've spent the money in the US, they actually can't spend them outside the country...

pg 15y ago

A good example of why companies should avoid taking government money if they can: even if the government doesn't impose a lot of restrictions on you upfront, the press will retroactively.

tomjen3 15y ago
Does it matter? I mean sure some people will hate you but properly not enough to lynch you. I would it imagine it would be worse for a start-up to be unknown that to have free publicity, even if it was negative.
- pg 15y ago
  I don't know how much it matters, to be honest. Depends how big a distraction it is for the company. E.g. I'd guess this news story is not the last they'll hear about it. Republicans will presumably use this as a stick to beat the administration with.
  - thrill 15y ago
    Should they not?
    - pg 15y ago
      I don't know that either. I don't know any details of this case. My point was just that it will be a distraction for the company if they do.
OstiaAntica 15y ago
pg, we need a clearer voice against these types of loan schemes. In the Fisker deal, the Qatar state put up a fraction of the U.S. govt investment, and is getting equity in return. The U.S. taxpayer has nothing but downside and is actually underwriting the risk in Fisker for the venture investment of players like Kleiner Perkins, Qatar, and Palo Alto Investments. It is corrupt.