By on October 22, 2011

After dogged reporting, ABC’s investigative unit, headed by Brian Ross of dubious Toyota fame, found out the shocking news that Fisker received a $529 million federal, and now the unpatricotic SOB has the Fisker Karmas built in Finland. ABC is shocked, I say shocked:

“With the approval of the Obama administration, 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.”

Isn’t that downright disgusting? Nevertheless, Fisker and the U.S. Department of Energy are unrepentant, claiming that the money was spent in America, developing the car.

Fisker also says the company was unable to find an automaker in the U.S. that is willing to make a small run – 8,000 a year – of the $96,000 plug-in hybrid Karma. The Karma is built by Valmet, a Finnish company that specialized in small runs.

Fisker’s second vehicle, the Nina, will be built at a former General Motors plant in Wilmington, Delaware.

Even the Freep, usually on the side of the American worker and apple pie, could not help but snicker:

“In its report, tagged an exclusive, ABC News linked the loan to the overseas production, raising questions at a time when House Republicans are investigating whether another Energy Department loan to solar company Solyndra, now in bankruptcy, was awarded inappropriately.”

“But the Energy Department noted that it was known before the loan was even awarded to Fisker that the company’s first run would be made overseas, though the funding would support jobs in the U.S. For instance, the Wall Street Journal noted the Finnish production contract when it wrote about the loan at the time it was announced in September 2009.”

And just in case ABC doesn’t have old copies of the WSJ sitting aroud, TTAC revealed on September 1, 2009 the shocking news that “Fisker has contracted with Valmet to produce its luxury EV Karma, with production to start early next year.“ And we were wrong. It didn’t start in early 2011. Not by a long shot. Now here is a scandal worthy of Brian Ross. He blew it.

(Hat tip to an anoymous source in Salo, Finland)

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30 Comments on “OMG! Brian Ross Reveals Fisker Fraud On Massive Scale! World Aghast...”


  • avatar
    DC Bruce

    Didn’t see the Ross piece, but the real scandal is that only now are people “looking under the hood” of these “green loans” made with taxpayer dollars.

    Pray tell: What is the justification for a $500M US taxpayer loan to a “green” car company which is going to produce a $90,000 vehicle? Fox News ran some wonderful video clips of the administration’s favorite gaffer — Joe Biden — announcing this great loan and its great benefit for American jobs. Typically, he failed to mention the fine print: the American jobs would all be white-collar — engineers, lawyers, financiers, etc. And he also failed to mention the heavy investment by big-Democratic donors who like all venture capitalists, stand to make spectacular gains if the venture succeeds — only this time (and like the investors in Solyndra), they’ve shifted a good piece of the downside risk on to the US taxpayer, which also gets none of the upside potential.

    Certainly, the vehicle itself is hardly a triumph of environmentalism. The Prius or the Fusion Hybrid appears to have better passenger capacity and goes much farther on a gallon of fuel (unless the Fisker is used exclusively as a suburban grocery-getter).

    • 0 avatar
      gslippy

      +1, what you said.

    • 0 avatar
      Zoom

      According to the Energy Department, in the Freep article linked above, $169 million went toward R&D of the car in California. The rest of the loan is earmarked for a second, cheaper car to be built in Wilmington, Deleware. Did Fox News report that?

      • 0 avatar
        highdesertcat

        The point is that the government has no business ‘investing’ in ventures that have little or no chance of being accepted or of ever being successful and profitable.

        I’m no candidate for an EV or Hybrid but I do take note of the Prius which has found a place in this niche market and has a ten-year track record of success.

        This is what happens when government puts public money into ill-advised projects for special-interest groups. A lot of taxpayer money gets wasted.

        At least with the bail outs and loans to the financial industry there is a decent chance of getting our money back with interest. Money is their business!

        There is zero chance of ever getting our money back from these green-weenie special interest projects like Solyndra, the bail outs of GM and Chrysler, and the various DOE retooling ‘loans’ extended to auto companies that have no intention of ever paying them back, or that will ever be able to pay them back.

        Meanwhile, everyday tax paying Americans are losing their homes, their cars, their lives, and millions more are looking for work. Would it not make more sense to bail them out instead?

      • 0 avatar

        According to the Energy Department, in the Freep article linked above, $169 million went toward R&D of the car in California. The rest of the loan is earmarked for a second, cheaper car to be built in Wilmington, Deleware. Did Fox News report that?

        Actually, yes.

        From FoxNews.com:
        http://www.foxnews.com/politics/2011/10/21/energy-department-defends-loan-to-company-building-electric-cars-in-finland/

        The Department of Energy is standing by a $529 million loan guarantee to a company building an electric car line in Finland.

        A department official, in a lengthy response posted on a government blog Thursday night, confirmed that the company Fisker is assembling its Karma electric car at its “overseas facility.”

        The response comes after ABC News reported that the Obama administration gave the green light for the company to move the manufacturing to Finland two years after announcing the loan.

        But Energy Department spokesman Dan Leistikow said none of the U.S. loan money contributed to the production work in Finland.

        “The Department’s funding was only used for the U.S. operations,” Energy Department spokesman Dan Leistikow wrote. “The money could not be, and was not, spent on overseas operations. The Karma also relies on an extensive network of hundreds of suppliers in more than a dozen U.S. states.”

        He said the first part of the loan, $169 million, supported engineering work at Fisker’s U.S. facilities as the company “developed the tools, equipment and manufacturing processes for Fisker’s first vehicle” — though that work so far has not contributed to a production line in the U.S.

        But Leistikow said the rest of the loan is still supporting U.S. production of another vehicle line called the Nina.

        “Fisker is using this funding to bring a shuttered General Motors plant in Delaware back to life and employing more than 2,500 workers. Fisker was attracted to this site in part by the opportunity to rehire some of the trained, dedicated workers who lost their jobs when that plant closed,” Leistikow said. The department later clarified that 120 workers have been hired at the site to date, with the rest set to be hired by early 2013.

      • 0 avatar

        Did Fox News report that?

        Why did you bring up Fox News? It was ABC News that “broke” this story. Nobody else mentioned Fox News.

        It’s sad. So many people, who could otherwise use their brains, substitute shouting “Fox News” for debate. Yesterday, an otherwise very bright young manin his early 20s apparently was eavesdropping on a conversation I had with my son’s mother in law. I was telling her how the Occupy Wall Street crowd complaining about student loans think they’re emulating 1960s era protesters when the one thing that ’60s protesters did, occupy the dean’s office or the office of the president of their university, the OWS crowd isn’t doing. Considering most of their student loans are going to a bloated college bureaucracy filled with all sorts of assistant provosts for diversity, and that the 8% they are paying goes to the government, they should be protesting the deans and the politicians, not Wall Street.

        As I walked away from my son’s MIL, the young man said to me, “Were you repeating some Fox News bullsh1t”, with a self-satisfied, smug affect.

        Now I didn’t bother telling him that that’s my own idea and I never heard it on Fox or any place else.

        I told him, “I thought you were smart enough not to stereotype people based on where you think they get their news, whether or not they really get their news there. Also, I thought you were capable of real debate, not just spouting bumper sticker slogans.”

        He turned and walked away, so I said, “You want to dish it out, but you can’t take it, punk.”

      • 0 avatar
        DC Bruce

        Actually, they did. But whatever your bias against Fox News — see Ronnie’s post below — I doubt even you argue that Fox fabricates videos of Joe Biden giving speeches to big crowds, which is what I saw.

        But the entire notion of pieces of a loan being “earmarked” is rubbish. Money is fungible. Actually the FREEPs bias (for subsidies and handouts to the car industry) is showing here. I mean, does it make it o.k. that 34% of the money did go to American “workers” when the other 66% went who-knows-where . . . maybe to Finland?

        And, of course, the second car, to be built in Wilmington, is vaporware.

        All of which begs the real question: What is the justification — from a public policy standpoint — of assuming a bunch of additional business risks (management risk, supplier risk, dealer risk) by investing in a non-existent company, where are scads of companies which already know how to build and sell automobiles? Why not invest $500 million with GM or Ford?

        Cars are not computers or microchips, circa 1980. They are a very mature technology, with an established supply, manufacturing and distribution base. An electric car, or a hybrid car, is just a car with a different powerplant.

        Even if Fisker had some unique and promising technology — which it doesn’t — it would make much more sense to license that technology to someone who already has proved he knows how to build and sell a car, than to start from scratch.

        Other than as some sort of vanity, low-volume, semi-custom product, affordable only to the top 1/2%, this thing has zero chance of success. Like the Tesla roadster, this is nothing more than an expensive toy. I have no issue with expensive toys, but I do have an issue using taxpayer dollars to fund them.

    • 0 avatar
      Zoom

      Ronnie, DC Bruce mentioned Fox News in the very first post. That’s who I was responding to, hence the little arrow next to my blank avatar.

    • 0 avatar

      There is a difference between “loan” and “loan guarantee” that should be noted.

      • 0 avatar
        highdesertcat

        Semantics! Money lost is money gone whether through loans or loan-guarantees, as in the case of Solyndra and more government ‘investments’ yet to come.

        Chrysler’s bail-out money is lost money initially disguised as loans. GM’s bail-out money is lost money initially disguised as loans.

        DOE ‘loans’ for re-tooling is lost money because it can never be repaid since the future holds joint-ventures, mergers and acquisitions of failed US auto manufacturers with foreign companies.

        In order for the US-portion of these ventures to be successful and provide employment for the UAW members, all government loans and loan-guarantees have to be forgiven, like they were for Chrysler when Fiat agreed to take them in and give them a home.

  • avatar
    pgcooldad

    I saw a Karma traveling north on Adams Rd south of the Chrysler Tech Center in Auburn Hills earlier this summer, and was surprised at how big it was in person.

  • avatar
    The Doctor

    What about GM – they took loads of money and they make cars in Europe, China and Australia? Bastards!

  • avatar

    Fisker also says the company was unable to find an automaker in the U.S. that is willing to make a small run – 8,000 a year – of the $96,000 plug-in hybrid Karma. The Karma is built by Valmet, a Finnish company that specialized in small runs.

    This is hard to believe. Ford jobbed out assembly of the Ford GT. True, Saleen, which did that contract work, has gone through some changes since then, but the facility in Troy, MI is still there.

    • 0 avatar
      kid cassady

      Valmet has decades of experience turning out small (on the scale of a car manufacturer) runs of Saabs and Porsches. Compared to them, Saleen is a big tuning garage. They only turned out 4,000 Ford GTs in the whole run, after all.

  • avatar

    The whole idea of the Karma was to sell rich folks a green car. Drivetrain aside, what cars are the Karma’s competitors? Remember, before he started up the hybrid car company, and after he left Aston Martin, Henrik Fisker was selling custom coachbuilt bodies on BMW and Mercedes-Benz chassis. So look at the higher end coupes from those companies and Maseratis as the primary competition to the Karma. If the Karma gets better real world fuel economy than those cars, its customers shouldn’t mind – though there’s already at least one report of a customer who put a deposit down and then canceled the order after the EPA ratings came out.

  • avatar
    Pch101

    The Finnish government heavily subsidies Finnish tech and manufacturing startups.

    Valmet Automotive is 34% owned by the Finnish government. http://www.synocus.com/images/About-Us/News/valmet%20automotive%20synocus.pdf

    In addition to providing a substantial chunk of equity, chances are good that the Finnish government also provided subsidized loans to Valmet that allowed the company to cut a better (lower cost) deal with Fisker than what would have been possible with any US firm. Valmet and the Finnish government would have wanted Fisker as a client/ partner because production of the Karma could help to provide them with critical mass for Valmet to sell its services to other automakers.

    Americans who are fond of making the “profits go to Japan” argument should be pleased. Fisker’s primary investor is the American venture capital firm Kleiner Perkins. If Fisker is successful, that intellectual property could be worth a lot of money, and the profits will go to funding other tech startups.

  • avatar
    eldard

    The Karma is a sports car. As I’ve said before, the rich don’t really care for those. You can only have so many Leo DiCaprios to buy one.

    • 0 avatar
      Hildy Johnson

      So you are saying sports cars are typically bought by poor people? You should tell that to the sports car makers – I’m sure they will adjust their advertising accordingly. (Punk plods from trash can to trash can – spots Lambo – cut; shakes hands with friendly Lambo dealer clad in gangsta outfit – cut; drives Lambo from trash can to trash can, with whistle and BIG smile on his face).

    • 0 avatar

      A sports car that has the performance of a modern V6 Camry, if that. By today’s standards, 0-60 in 6.3 seconds is not considered sporting. By 1960s or ’70s standards it’s muscle car quick.

      If the affluent aren’t interested in sports cars, who is buying the sportier BMWs and M-Bs?

    • 0 avatar
      Herm

      I’m pretty sure Leo Decaprio got a free one

  • avatar
    d503kemp

    Why is it that I think of the US in relation to this as some rich widow who had her jewels stolen by a rakish, European and all she got was empty promises and a rose?

    • 0 avatar
      dvp cars

      ……kemp…dead on, shades of the infinitely more charismatic Bricklin and Delorean, who pulled off more or less the same stunts for chump change, compared to today’s digital-era flim flam artists. The fact that EVERYBODY drives a car makes politicians living proof of the old maxim, ” a little knowledge is a dangerous thing”.

  • avatar
    jpolicke

    I wouldn’t resent this deal as much IF it were actually putting some engineers and designers to work; unemployment isn’t just a blue-collar problem. Show me payroll numbers. Line up these employees outside the building for a group photo. Describe the content and value of the work product. The government has agencies with people who are very efficient (don’t roll your eyes, I’ve seen them work) at analyzing what a contractor does with government money and they’re not nearly so willing to take a claim on faith when it doesn’t involve a green halo or the politically connected.

  • avatar
    stuki

    How surprising.

    But the NEEEXT time some backmarker sweetly coos “hope and change” on TV, THEN he will spend the money he stole really really wisely. It’s only the first quadrillion attempts that didn’t work, because, like some mean Booosh or community organizer was baaad and like, someone is greedy. Cause, they on TV says help the ‘mericun economics and, like, women and children and everything good….

    What a bloody dump we live in.

  • avatar
    valkraider

    So, every penny of every investment must have complete and immediate payoff at this instant?

    Are we not allowed to invest in future capabilities, R&D, future processing capacity or anything that might be a little bit down the road?

    The technologies, the methodologies, and the facilities that are built or designed for these $90k limited run cars, will eventually filter down to other models, and other applications.

    How many features that are now standard on normal cars were once only exclusively the domain of extremely expensive luxury cars? How many projects might have failed themselves but the technology or processes developed during the failed project were used elsewhere?

    Man people are so quick to try and produce a “FAIL” related to government any way they can. I am not implying we should just give money away willy nilly, but I feel that the govt has adequately defended the loan in this case. Also, as was mentioned above – unemployment is not exclusively blue collar, engineers and managers need work too. And finally – it is unfair to compare the state of ICE vehicles to that of electric vehicles – as the ICE vehicles have literally had over 100 years of development and expecting EVs to catch up in like 5 years…

  • avatar
    greenb1ood

    I can attest to at least one American job being added to produce the next Fisker model. My company has been chosen as supplier of some of the interior components and since we’ve been resisting new hires for about 2+ years, this seemed to be the tipping point that caused the hiring of one new engineer when we put a more experienced one on the Fisker program. I have to wonder how many times this scenario played out across the US and whether it is worth $500Mil…


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