Chinese firms reportedly losing interest in US taxpayer-backed Fisker, citing loan terms | Fox News
Chinese firms in talks to buy electric car maker Fisker Automotive reportedly are having second thoughts, balking over the possibility that Fisker's U.S. government loan would compel any buyer to churn out cars at an aging GM plant in Delaware.
The Wall Street Journal and Reuters report that the Chinese suitors are pulling back on bidding for the troubled automaker, which so far has drawn $193 million from its nearly $530 million U.S. taxpayer loan. The idea that companies from China -- where state-backed industry is a way of life -- are nervous about the terms of the U.S. loan could raise even more questions about the viability of that taxpayer investment.
"How are these Far East entrepreneurs missing the Obama administration's keen vision and business acumen?" Paul Chesser, with the National Legal and Policy Center, asked sarcastically.
The Department of Energy loan itself has been frozen. Fisker was cut off after failing to meet production and sales goals on its electric plug-in sedan, the $100,000 Karma.
This was followed by the company halting operations at a Delaware facility, a formerly abandoned General Motors plant.
It's unclear whether Fisker would even be able to tap the remainder of the federal loan.
But The Wall Street Journal reported earlier this week that two Chinese companies, Zhejiang Geely Holding Group and Dongfeng Motor Corp., were pulling back from Fisker talks after Fisker managers proposed that it draw on the rest of that U.S. loan. According to the Journal, this raised concerns about a loan requirement that Fisker build its cars in the Delaware facility, seen as old and expensive to operate.
Fisker Automotive CEO Tony Posawatz first hinted in an interview with Fox Car Report in November that the company was considering tapping into the loan again. He said at the time the company needed "a little bit more funding" to take the next step. Asked if that meant returning to the DOE funding well, he said: "We're going to have some discussions with the Department of Energy, nothing really to report right now."
Reached Saturday, Fisker spokesman Roger Ormisher said he could not confirm the details of the talks due to their confidential nature. "At this point in our process we can only confirm that the company is still in discussions with multiple parties with the view to securing a strategic alliance or partnership," he told FoxNews.com.
He said the company is "pleased with the level of interest from potential partners which underscores the attractiveness and relevance of Fisker's" technology and strategy.
A representative with the Department of Energy could be reached for comment Saturday.
Fisker took a hit last year when battery supplier A123 filed for bankruptcy. That company was recently bought by another Chinese company, Wanxiang Group.
Amid other setbacks, Fisker's co-founder Henrik Fisker earlier this month resigned as chairman amid disagreements with other members of management on the way forward.
The Wall Street Journal reported that he left in part because the company was looking to tap back into the U.S. government loan pool.
The government loan helped get Fisker off the ground but has also helped bring an added layer of scrutiny to the company, with lawmakers nervous that the government could lose its investment just like taxpayers lost more than $500 million on solar panel maker Solyndra.
Speculation that Chinese firms were poised to buy the company also sparked outrage last month, when senators complained those foreign companies would benefit from U.S. taxpayers' investment.
But Fisker claimed at the time that the bidding process was still open, and companies from several different countries were being considered.
The Obama administration also has defended the Energy Department's overall loan program, which originally extended the nearly $530 million loan to Fisker in 2010. The department says the program was stood up to invest in advanced hybrid electric vehicles "because they have the potential to significantly improve performance and fuel economy for American consumers."
The department stresses that the loans come with "strict conditions" to protect taxpayers, and that it is working with Fisker to make sure the company can produce cars and jobs in America.