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Fisker Lays Off Most Workers, Plans To Shop Around Remaining Assets
After being saddled with a half-billion dollars in loans from the U.S. Department of Energy, electric car manufacturer Fisker just can't catch a break. It's not just the cars; it's the company itself. From a Reuters report: "In a statement, Fisker confirmed that it let go about 75 percent of its workforce. The automaker said it was 'a necessary strategic step in our efforts to maximize the value of Fisker's core assets.' A Fisker representative could not immediately answer questions on the company's financial position. In the past, the automaker has declined to comment on the possibility of bankruptcy. ... About 160 employees were terminated at a Friday morning meeting at Fisker's Anaheim, California, headquarters, according to a second source who attended the meeting. They were told that the company could not afford to give them severance payments."
Well, either treat it like NASA if it's so damned important and plow uncounted tens of billions into it, or get out. Trying to be like venture capitalists, but idiot ones, unlike the real ones who won't go near this unlikely technology, just breeds people who will dance the way government wants to attach themselves to the government tit until it runs dry.
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
This is on the front page because Fisker is linked to Democrats, and the failure of this company makes them look bad.
And when Fisker first started talking about their cars and got all sorts of drooling interest here ... that's because it was Eeevil Republicans playing long ball and setting up slashdot users for a clever smackdown later when Fisker inevitably failed? Wow those guys are sinister geniuses!
Here's why Fisker is associated with Democrats: because a Democrat decided to hand them half a billion dollars borrowed from other places like China in a vain attempt to pander to the Greener Than Thou voting block. Yes, it was pure politics. You can't make Obama's political decision to give them other people's money (and the interest we'll be paying on that money for decades) go away.
But that has nothing to do with the fact that a theoretically promising and sexy-looking tech product company has badly fumbled something that an endless parade of people keep saying is the Super Sexy Green Future of driving around.
One of my customers invested a pile of money into becoming a Fisker dealer. They have been completely, royally screwed by the engineering, sales, and financial incompetence of that company - as well as bad luck over things like cars getting flooded in storage in storms, and more. Why is this "on the front page?" Because it's a classic tale of a tech venture gone sideways. And you doth protest way too much about the politics. Basically, you're using the opportunity to start a thread that bashes people you don't like. The hypocrisy is delicious.
Don't disappoint your bird dog. Go to the range.
After being saddled with a half-billion dollars in loans from the U.S. Department of Energy...
From the OED:
saddle
v.
1. Put a saddle on a horse
2. (Saddle someone with) give someone an unpleasant responsibility or task.
1. If you somehow meant this car company was reducing fossil fuel consumption by strapping saddles to horses and calling them cars, they should have been out of business a long time ago.
2. If you somehow meant that the DOE forced a half billion dollar loan guarantee on them, and they were unhappy about this... I think you misunderstand the function of the DOE, and possibly the function of a loan guarantee.... And possible the function of a half billion dollars. Are you, perchance, a Fisker executive? They seem to have this same difficulty in understanding the functions of these things.
DOE should take control of the company, oust its top executives and either turn it around or sell off its useful assets to other companies who will use them to achieve the goals of the loan and recoup the taxpayers' costs. Otherwise Fisker will probably sell its assets off for less than they are worth and the executives will get kickbacks or positions at those companies in exchange for doing so.
Let's be real though - the government didn't just invest in Fisker. They also invested in Tesla, which is going strong, along with Ford and Nissan. Nissan delivered with the Leaf, while Ford's return on that investment is much less direct but involves a few different combustion engine technologies/improvements and manufacturing line improvements.
The truth is that this is the way investment works - some companies are successful, others are not. Whether the government should be investing at these different levels is what's really up for debate. It's hard to deny that the Advanced Technology Vehicles Manufacturing Loan Program has generally been a success, whether you believe that the government should have been the ones to invest or not. This program was a $25 billion program, and they lost $200 million of it on a bad investment. Considering the risk profile was expected to be 30%, it would take Ford or Nissan to fail on their obligations under the loan in order for it to surpass that threshold.
You also need to understand that Fisker didn't get all of the money they were guaranteed. A loan guarantee means they'll definitely loan up to a limit, not that Fisker immediately received that amount. The real number they got is about $200 million, not $500 million. Losing $200 million on a total of $25 billion invested in relatively unproven (in the market) technologies isn't all that bad.
By that logic, we should never invest in R&D or anything remotely risky as long as there are needy people.
Why bother with cancer or diabetes research when we have so many who don't have medical coverage?
All those hundreds of billions should have been spent on more prescriptions and checkups, right?
Pain is merely failure leaving the body
Qualified professional investors are limited in their ability to tackle big problems because they don't have enough money, they don't have enough time, or there is no way to hoard the results of a particular investment. Governments have lots of money, lots of time, and they don't care as much about hoarding the resulting benefit because their entire goal is to benefit society. Private investment gets trapped into local minimums and incrementalism.
I'll give you a few examples:
1. The railroad system (Pacific Railroad Act)
2. Morrill land-grant act for universities (Purdue, MIT, Cornell, etc.)
3. GI Bill of rights
4. Interstate highway system
5. The internet
6. NASA
etc., etc.
There are more examples here: http://www.huffingtonpost.com/william-lazonick/nine-government-investmen_b_954185.html
Soon to be added to this list, 'Electric cars'.