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Gov't Funded Electric Car Company Goes Out of Business
thecarchik writes "Consider yesterday's collapse of electric car company Green Vehicles an object lesson in why it's a bad idea for cities to invest in the risky business of start-up car companies — perhaps especially start-up electric car companies. Even such companies with a viable product have seen their fair share of financial troubles, but Green Vehicles did not even have a product to sell off at a fire sale. The city of Salinas, California learned that lesson as Green Vehicles shut its doors, costing the city more than $500,000."
I'd say it's a bad idea for *anyone* to invest in a company that has no product and/or does not make money.
Business plans are a dime a dozen; ability to execute is an uncommon skill.
There's no -1 for "I don't get it."
A "green jobs" investment that went sour. A car without a market. Socialists everywhere scratching their heads.
Yes the pun was intended.
Who exactly expected to have a fully functional prototype of a sale-able electric vehicle with a $500,000 investment? Cities, counties, states and the Federal Government get into all sorts of businesses that take time and money to set up. Medicare, BART, the TVA... it's not always a good idea, nor always a bad idea. But if you're going to do it, do it. $500,000 gets you two engineers, some materials and a fab plant for a year, and not much else. That may be a nice way to do a lean start-up, but it's entirely possible that the only reason that the half-mil was a waste was because that was the limit, so it was doomed to fail.
It may not be an impossible task, but if inventing the next generation of EV were easy and cheap--and in this context, I'd suggest that a $500,000 investment is cheap--then everyone would be doing it.
The CB App. What's your 20?
> it's a bad idea for cities to invest in the risky
> business of start-up car companies
Perhaps it's a bad idea for cities to heavily invest in any high risk venture. But it should be noted that we don't all come out and cluck at them when their risk pays off.
Anyway, if the good people of Salinas wanted to risk $500 thousand in a questionable startup, it's a free country (sort of). I imagine other cities have squandered far more money on far worse ideas.
Banks and finance companies don't make anything tangible either, yet get government bailouts in the hundreds of millions, if not billions.
Too bad they wern't 'too big to fail' while making nothing.
Divide a cake by zero. Is it still a cake?
Ummm, so they invested a half million and the company failed. It seems to me that more than half new businesses fail, as a matter of fact, the last time I checked new businesses have a failure rate of around 80% in the first five years of business. If your starting a new business with a new product, then the odds are stacked against you. Does that mean we stop trying to launch new products? If we stop trying to invest in new projects then I guess the only way to open up new funding is by legislating income for current product lines, which doesn't seem like a viable way to do business.
So the county invested in a new business and it failed. Chalk it up as a loss and move on. While the taxpayers might not like the way the gov is spending their taxes, cities/municipalities, counties, states and national governments do this all the time. Sometimes it works, sometimes it doesn't. But I'd rather fund a new startup that fails, rather than fund the good-ol boy network that siphons money off the top to fund their retirement account. It doesn't sound like the failure was due to mismanagement or corruption, just that they weren't able to continue and that it cost more than expected. This happens all the time. A half-million is a small investment and though it didn't work out this time, the only way to "win" is to make investments in the future. If all the bugs had been worked out before the company went into business there would have been no reason for the gov to invest. They gambled on a decent return and it failed. But one failure shouldn't be held up as an example to bash investing in the future, which is the slant the article seems to imply. If we don't invest in better ways of doing things, where will we end up?
/* TODO: Spawn child process, interest child in technology, have child write a new sig */
How about this: It's a bad idea to use the money of tax payers to do anything involving risk outside of national defense. Leave the whole capitalism thing to the capitalists.
Because capitalists always have the best interests of the human race at heart, and will never do anything that will adversely affect the economy. (How did that global financial crisis work out for you?)
The world is based on technology and infrastructure created by government investment. Sure there have been failures, but no system will have a 100% success rate.
What a stupid conclusion! It makes me sick to see all the free-market apologists chuckling and slapping each others' backs over this. Firstly, in response to the idea that the govt shouldn't be doing this ... in fact this story demonstrates that ONLY the government should be doing this; as it's too risky a business proposition for private enterprise. Governments don't HAVE to make money on these ventures. The articles says this has cost the city more than $500,000. So fucking what! That's NOTHING for even a small town. It's 10 people's yearly wages ... or in the US it's probably more like 50 people's wages :) These 50 people otherwise wouldn't have had a job, and it's well known that the US has the WORST social security and healthcare in the developed world.
In reality, this is $500,000 worth of research and development that otherwise wouldn't have happened. If this was a private company doing the research, it would be either bought up by BP and shelved, or just lost. But being a government body, the knowledge gained is far more likely to make it's way into the common domain.
I am waiting for the day the US does default on it's debts ... we'll see how many free market fanbois there are left after the shit hits the fan. Can't believe the 1st round of the GFC didn't make you wake the fuck up.
The problem is that Keynesianism has been around for so long, people have forgotten what capitalism was like without it.
It was nasty. It was unstable. I almost collapsed several times.
It's a big thing for people in the USA to fund companies that have no product and/or does not make money, the companies are called 'start-ups'.
A big thing in Silicon Valley, where people fund a couple of geeks with a half baked piece of software and a crazy idea (or a couple of marketing wizards who promise a good idea and have a flakey demo). Also big in the space industry, NASA has invested billions into companies that are promising a working earth to space person-rated spacecraft, and in most cases have only got a prototype at best, and certainly no plan for making money (apart from taking it from NASA).