Senators are questioning if a loan to Fisker is an appropriate use of federal funds. Specifically, senators John Thune of South Dakota and Chuck Grassley of Iowa are wondering about the $529 million loan partially because of Qatar’s ownership stake. The senators want the Obama Administration explain its selection of Fisker. Their biggest question being, “Why should the American taxpayer have to accept the credit risk of a company owned by a foreign government?” This is a second letter because they have not received a satisfactory explanation to date.
“The response doesn’t address the questions we asked regarding the accuracy of the department’s statistics. That’s cause for concern,” Grassley said.”There’s also a lot of discussion of the due diligence that went into making the loan but no evidence to show what that due diligence actually was. The riskiness of loans to companies that may or may not be able to pay them back deserves scrutiny.”
Thune added, “Its unfortunate that with millions of taxpayer dollars at stake the Obama administration will not answer our specific questions about the troubled Advanced Technology Vehicles Manufacturing program.”
While the senators are waiting to hear back from the Obama Administration, Damien LaVera from the Energy Department is on the defense. He said, “The Department’s loan program invests in advanced hybrid electric vehicles because they have the potential to significantly improve performance and fuel economy for American consumers. Our loans and loan guarantees have strict conditions in place to protect taxpayers, requiring borrowers to meet strict milestones and conditions prior to receiving loan proceeds. 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.”
Fiskers hasn’t decided where their vehicles will be built yet, however they have laid off 26 workers in Delaware and 40 workers in California in February.
Source The Detroit News