Friday, October 21, 2011

Another Solyndra-type scandal. Not so fast ABC

David Roberts at Grist says that story you may have read or seen from ABC News that charges that an Obama administration Dept of Energy loan to California-based Fisker Automotive to develop an electric vehicle is another possible Solyndra-type “scandal” isn’t worth a click. 

Turns out ABC is stretching the truth to the breaking point trying to make a story out of not-much-there.  The truth, according to Roberts, is the following:

The loan program in question is the $25 billion Advanced Technology Vehicles Manufacturing (ATVM) Loan Program, established in 2007 by the energy bill passed under George W. Bush…The ATVM program was fully funded in 2008 and began issuing loans in 2009. In June of that year, Energy Secretary Steven Chu announced the first three recipients: $5.9 billion to Ford, $1.6 billion to Nissan, and $465 million to electric automaker Tesla.
Then, in September 2009, DOE announced a fourth recipient: $529 million to California-basedFisker Automotive. The loan was finalized in April 2010 and announced at an event with Vice President Joe Biden.
At the time, Fisker had one vehicle under development and another planned, both plug-in hybrids; the loan was split between them. The smaller portion, $169 million, was devoted to helping Fisker work with U.S. suppliers to finish up the Karma, a $97,000 four-door luxury sedan. The larger portion, $359 million, was devoted to Project Nina, Fisker's plan to develop a mid-market plug-in sedan. ..
In October 2009, Fisker purchased the Wilmington Assembly plant in Delaware, which was owned by General Motors from 1947 until it was shut down in July 2009, to manufacture its Nina. The DOE loan is being used, in part, to renovate and upgrade the plant. In June 2011, Fisker started its first round of hiring, bringing on 120 engineers, technicians, and production workers at the plant…
The DOE loan is specifically earmarked for spending inside the U.S. None of it will be spent in Finland. And, again: Fisker is in the process of upgrading a plant in Delaware to manufacture its next car.

Roberts has the following to say about ABC’s charge that the loan to Fisker is risky:

[The whole point is] to help companies on the cutting edge, companies trying to break into established markets and shake up the status quo. Those companies are, by definition, risky. That's why Congress set aside $7.5 billion as a loan loss reserve.
And Fisker isn't that risky. It's attracted $650 million in private investment since the DOE loan went through. It's got a car in production. It's gearing up to produce another.

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