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Forum Post: Another Solyndra? $193mm. Wasted

Posted 6 years ago on Feb. 12, 2012, 2:50 p.m. EST by Jflynn1964 (-206)
This content is user submitted and not an official statement

from Louis Woodhill at Forbes:

It’s too bad that airbags can’t save investments in automobile companies. If they could, there might be some hope for taxpayers when Fisker Automotive, another one of Barack Obama’s “investments” in “green energy”, crashes and burns financially.

In May, 2010, the Department of Energy (DOE) approved $529 million in loan guarantees to Fisker to help finance development of battery-powered cars. Fisker had drawn down $193 million of this money by February 7, 2012, when DOE announced that it was “freezing” disbursement of the loans because the company had not met agreed milestones.

Fisker responded by laying off 26 people who were working on preparing a plant in Delaware to produce a “plug-in hybrid” car to be called the Nina. They also laid off 40 contract employees at their headquarters in Anaheim, Calif., where Fisker still employs 600 people. Fisker is currently seeking to renegotiate the terms of its deal with the DOE so that it can resume drawing down taxpayer-guaranteed funds, but the prospects are uncertain.

At this point, taxpayers should be concerned their $193 million loan to Fisker will follow the $535 million loan to solar energy firm Solyndra, the $118 million grant to battery maker Ener1, and the $39 million loan given to Beacon Power down the economic rat hole called “alternative energy”.

In a sense, Fisker’s woes could be attributed to bad karma, because most of the taxpayer-guaranteed funds it has drawn down thus far went to help it develop its first car, the Fisker Karma.

The Chevrolet Volt, which was also developed at taxpayer expense, has not been selling well. Despite $7,500 (or more) in taxpayer subsidies to every purchaser, it turns out that there is not a huge market for a small, cramped hatchback that lists for $49,000 and can, at best go 40 miles before it must switch from batteries to gasoline power.

Now, try to imagine the sales prospects for a car that has a smaller back seat than the Volt, a smaller trunk than the Volt, can only go 25 miles on pure electric power, is backed by a company that most people have never heard of, and lists for $103,000.

Fisker claims to have produced 1250 Karmas and to have sold about 250 of these. Its business plan calls for selling 15,000 Karmas a year. This is more than Lexus sells of its LS460 luxury sedan, which is similar in size, much roomier, considerably quicker, gets similar mileage under gasoline power, is backed by Toyota, and lists for only $67,630.

To be sure, the Fisker Karma is a beautiful car, perhaps the most beautiful 4-door sedan in the world. It might have made more sense for Obama to funnel the $193 million to Fisker through the National Endowment for the Arts rather than the DOE. Unfortunately, however, the Karma’s commercial viability will depend upon its virtues as an automobile, rather than as a piece of sculpture.

The Fisker Karma exemplifies the inherent problem with “alternative energy”. Namely, what is alternative energy an alternative to? It is an alternative to energy sources that make economic sense. If an alternative energy project were capable of producing energy that was worth more than it costs, it would not need taxpayer subsidies.

Extending loan guarantees to alternative energy projects, as the Obama administration has done in droves, essentially guarantees a series of bankruptcies and scandals. It will be interesting to see how many of these cans can be kicked down the road past the election, and how many will blow up before then.

Gasoline-electric hybrids like the Karma eliminate the “range anxiety” that comes with battery-electric vehicles (BEVs) like the Nissan Leaf. However, they do so at the cost of putting two power trains into the same vehicle, and compromised pure-electric performance. When a Karma or Volt is operating on battery power, its gasoline engine represents dead weight.

A look at the technical specifications of the Fisher Karma reveals the inherent problem with electric cars. Despite the “advanced lithium ion battery technology” used in the Karma, its 600-pound battery pack holds about the same amount of energy (in terms of driving range) as one gallon of gasoline, which weighs about 6 pounds. The Karma’s batteries also take hours to recharge, while pumping one more gallon of gasoline into a car’s gas tank takes about 5 seconds.

Interestingly enough, the 443-pound battery pack in the Chevy Volt also provides about the same driving range as one gallon of gasoline poured into the fuel tank of this vehicle.

Fisker’s ostensible purpose in seeking the release of additional DOE loan guarantees is so that it can resume preparing a plant in Delaware to produce the Nina, a smaller plug-in hybrid family car that is supposed to sell for about $50,000. However, this vehicle will compete directly with the Chevy Volt, which is itself not selling well. It’s hard to imagine a happy ending for this taxpayer-financed saga.

Progressives, like President Obama, believe that they are smarter than the rest of us, and so they should have the power to direct the economy from Washington. Unfortunately, putting Progressives in the driver’s seat results in companies being driven off the economic cliff with hundreds of millions of taxpayer dollars in the trunk. Solyndra, Ener1, and Beacon Power were just a start. There are more to come. There is no escaping karma.



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[-] 2 points by brightonsage (4494) 6 years ago

Where were you when the $6billion cash went missing in Iraq? Yes, $6 BILLION! Karma that?


[-] 0 points by JuanFenito (847) 6 years ago

Yes, thank you. Some people don't realize that the corruption in Solyndra and Fiskar is due to the defense department overspending.

[-] 0 points by Jflynn1964 (-206) 6 years ago

I was complaining loudly to my congressman and senator.

[-] 2 points by brightonsage (4494) 6 years ago

So, let's clean it up. Clean it all up. The Defense department can't produce financial statements that balance and haven't been able to since 1997. Couldn't be any problems there?

WASHINGTON – Today, Senate Federal Financial Management Chairman Tom Carper (D-Del.) and Ranking Member Scott Brown (R-Mass.) called attention to a new study by the Government Accountability Office (GAO) detailing substantial problems in Navy and Marine Corps financial and accounting systems, identifying $22 billion in payment disbursement and collection errors.

$193 million is a rounding error.

[-] 0 points by Jflynn1964 (-206) 6 years ago

I agree wholeheartedly. I don't think it is a party thing it is a power grab. Hence, I believe the money, the decision and the control shoudl be at the local level. Reduce the expenses as much as possible. No more subsidies for somebody's idea of what the next industry is going to be. We invested in wind power back in the 1970's and it didn't work.

[-] 1 points by brightonsage (4494) 6 years ago

How can the geo political level have anything to do with it? Enterprise zones are one of the most abused government program ever and it is state and local governments.The answer to corruption is NO corruption. Strategic investing by government is one of the important benefits of government and has been very important in the past and we will all pay a price if it is not done at all or is done poorly.

Venture capital has 4 failures out of 5. But it is an important component of the country's prosperity. Government investment is needed to bring technologies to the point that VC's will take the risk. This is about babies and bathwater.

[-] 0 points by Jflynn1964 (-206) 6 years ago

You will neve get rid of greed and corruption as it is human. Knowing that you push the control to the local level where there is more oversight and the decisions are not so big.

Government investment has a very poor record of success as they don't know what is going to work next. There is plenty of VC money to fund new investments and these people have every incentive to make it work.

The best example of private money are roads and airports. They work much better when private industry runs them.

[-] 1 points by brightonsage (4494) 6 years ago

I don't think there is anything magic about the local level good people can make it work at any level. Bad people can screw it up at any level. Lazy people don't provide oversight at any level. I don't think you can prove that government investment has a poor record of success. You have to compare the investments at comparable levels of risk.

Government should be making the investments that are high risk that VC's won't touch. The Apollo program was very high risk and it was successful. It was successful as a program but its real success was the technological lead it gave us for decades. VC's wouldn't, or couldn't, have made that investment. The interstate hiway system was the envy of the world, until we stopped investing in repairs. Whose fault is that? I have raised money from VC's multiple times and they won't take very big risks at all and definitely not on things that have long development times. And research is an absolute no no. What they call R&D must be just D in reality. How big a risk is a road? "Well, we built it but you can't drive on it. I didn't think it would work built on edge, but the engineers said it was cheaper to build that way,"

The government has made some pretty poor investments, mostly in wars. They seem to have incredibly bad judgement in investing in wars. I can;t remember one in my lifetime that has paid off. The last two were pursued with at least half private contractors. How has that worked out with private industry running most of them?

[-] 1 points by toukarin (488) 6 years ago

First, Obama approved loan guarantees for alternative energy tech. It was the DOE selection process which picked the actual beneficiaries. So... to lay ALL the blame on Obama is... just not right...

Second, Internal combustion tech has been around for... oh... ~160 years. Li-ion tech... ~25 years... give it some fucking time... and money...

As for your arguments:

Hydrocarbons are highly energetic, they completely wipe the floor with anything short of radioactive elements in terms of energy density. But can you reuse that 6 pounds of gas after burning it up?

Charging takes time versus filling up gas. Also true, but seriously, how many hours do you leave the car sitting in the parking lot doing nothing? If you drive 25 miles to work and plug in there... you're set for the ride home. Most EV's recharge batteries when driving on gas (provided they have a gas engine backup).

The electric vehicle is not meant to replace every vehicle. Not in its current form. But for damned sure it can replace regular commuting use vehicles. Personally, I don't know too many people driving >20 mi to work.

Cost. Agreed, initially EV's are much more expensive and thus currently not viable competitors to conventional internal combustion engine vehicles. But that does not mean you stop researching.

When oil reserves start to deplete, and they already are, gas prices will proportionately increase. Wont take that much more for an EV to become that much more affordable to operate than a conventional vehicle.

At that time... do you want to be driving your Pickup? or the Karma? Or would you rather have a vehicle that has been developed by taking lessons from vehicles like the Volt, the Karma, and other EV concepts, perhaps one which is able to charge faster and drive longer distances?

Or do you own some horses and a wagon?

[-] 0 points by JuanFenito (847) 6 years ago

I agree, give it more time and money. Preferrably a whole lot of money.

[-] 1 points by larocks (414) from Lexington, KY 6 years ago

i dont understand. all this talk about battery powered cars. wtf hasnt anyone seen this http://youtu.be/Jivb7lupDNU

[-] 1 points by ithink (761) from York, PA 6 years ago

I am a tax payer. Along with at least 50% of the country, I believe we should be spending a good portion of money on alternative energy. You should trust smart people more often. You may hate it now, but you will thank us for it down the road.

[-] 0 points by Jflynn1964 (-206) 6 years ago

Yeah, the smart people will save us. Are you kidding, why don't you trust yourself, are you not smart?

[-] 1 points by ithink (761) from York, PA 6 years ago

:) Of course I am kidding. I am being snide. But, I do think funding renewable energy research is extremely important. This is one issue which, if everyone who was interested in the topic, set their minds on achieving practical steps.. we could make great headway.

[-] 0 points by Jflynn1964 (-206) 6 years ago

In my opinion, not for a long time. The VCs are investing and making money now because they are taking form the taxpayers. These technologies don't make sense yet.

[-] 1 points by ithink (761) from York, PA 6 years ago

It's true. There is alot of work to do. But that is why public funding is so important. We cannot wait for business ventures to create the infrastructure.. it will never happen.

[-] 0 points by Jflynn1964 (-206) 6 years ago

Why, private money has made shale gas efficient and workable over the past 10 years and created an industry.

[-] 1 points by ithink (761) from York, PA 6 years ago

I have nothing against private money. It is just that private industry is not likely to invest in the research that is needed to grow the field of renewable energy. So public funding is really the only option. Yes, there will be failures. There should be. That is how science works. I would not expect the private industry to be able to sustain the funding of science. They are looking at only the bottom line. Money. Some things are more important though.

[-] 1 points by craigdangit (326) 6 years ago

Yeah... two wrongs most definitely make a right.

[-] 1 points by Jflynn1964 (-206) 6 years ago

That wasn't taxpaper's money that was investor's money. I didn't lose anything on Enron but I sure did here.

[-] 0 points by bensdad (8977) 6 years ago

and the money and BLOOD war criminal shrub spent on Iraq ? did that cost you anything ?

[-] 2 points by Jflynn1964 (-206) 6 years ago

Are you angry about something? Why is Bush a war criminal?

Yes it did cost me and I don't like it. I don't like the way Obama is doing it either.


[-] -1 points by bensdad (8977) 6 years ago

I' m so glad you asked why-

Whenever someone publicly suggests that President Bush and other members of his administration might have committed war crimes, he or she is accused of being a wild, over-the-top extremist. But there is one group of people that has always taken the war crimes charges seriously--the members of the Bush administration themselves. They have good reason for doing so, because they have exposed hundreds of Americans to possible prosecution for violating U.S. law.

From the very beginning of the war against terrorism, George W. Bush and his administration knew that the tactics and techniques they planned to use were illegal according to U.S. law. Rather than reject these tactics and techniques, they prepared a series of convoluted legal rationales that they hoped would protect them from prosecution. In recent weeks, in the wake of the Supreme Court ruling in Hamdan v. Rumsfeld, Attorney General Alberto Gonzalez and others have been formulating defenses against possible prosecutions for war crimes and are pressuring Republican members of Congress to pass new laws to protect them.

The War Crimes Act of 1996, promoted by Republicans and passed by both houses of Congress without a dissenting vote, made it a federal crime to commit a "grave breach" of the Geneva Conventions, meaning the deliberate "killing, torture or inhuman treatment" of detainees. It includes "outrages upon personal dignity, in particular humiliating and degrading treatment." Violations of the War Crimes Act that result in the death of a detainee carry the death penalty and they do not have a statute of limitations. Although it was initiated to prosecute foreigners who mistreat American prisoners, Congress, in an admirable display of bipartisan support for human rights, applied the law as well to American treatment of foreign prisoners of war, reasoning that we should hold ourselves to the same standards we hold others.

In a memo to President Bush dated January 25, 2002, then White House counsel Alberto Gonzales suggested that Bush find a way to avoid the rules of the Geneva Conventions as they relate to prisoners of war because that "substantially reduces the likelihood of prosecution under the War Crimes Act." A week later, Attorney General John Ashcroft sent a memo to the president also stressing that opting out of the Geneva treaty "would provide the highest assurance that no court would subsequently entertain charges that American military officers, intelligence officials, or law enforcement officials violated Geneva Convention rules relating to field conduct, detention conduct or interrogation of detainees." Ashcroft reminded Bush, "The War Crimes Act of 1996 makes violation of parts of the Geneva Convention a crime in the United States."

U.S. Army Regulation 190-8 provides persons captured on a battlefield the right to a military hearing at which they can demonstrate that they are entitled to be held as prisoners of war or to prove that they are innocent civilians picked up by mistake. After the 1991 Gulf War, for example, almost 1,200 captured Iraqis were given such military hearings and hundreds of them were released as innocent civilians. The first President Bush saw this as normal procedure; his son, George W. Bush, did not. After the 2001 invasion of Afghanistan, he declared that no one picked up on a battlefield was entitled to Prisoner of War status, and he refused to allow the U.S. military to hold a single status hearing. Instead, after holding the captured soldiers and others in camps in Afghanistan, he shipped most of them to Guantánamo.

Unfortunately, these prisoners fell into a mishmash of different categories. Some of them really were al-Qaeda members and terrorists-in-training. Others were Taliban soldiers, many of whom considered themselves to be fighting for a national army. In addition, the Taliban operated a forced labor system in which villagers were periodically expected to work for the Taliban for about twenty days at a time. Those Afghanis who had the misfortune to be doing their forced labor at the time of the U.S.-led invasion were considered enemy combatants. Because the United States offered a substantial reward for the capture of members of al-Qaeda or the Taliban, entrepreneurial bounty hunters snatched random locals, collected their rewards, and disappeared. Finally, there were innocent civilians who were just picked up by mistake. Unlike his father, George W. Bush did not give any of these people a chance to present evidence of their innocence.

The fact that these prisoners were sent to Guantánamo rather than to a military prison in the United States was another example of the Bush administration's attempt to avoid prosecution under the War Crimes Act. Administration officials declared that because Guantánamo was in Cuba and was not part of the United States, anything that was done there was not subject to U.S. laws.

President Bush and his administration also faced the problem that Sections 2340-2340A of the US Code, Title 18, outlawed torture. So, to be on the safe side, the Bush administration redefined the word "torture." In an August 2, 2002, memo signed by Jay Bybee, the head of the Justice Department's Office of Legal Counsel, the department lawyers proposed sidestepping the law by narrowing the designation of an act of torture as one that caused suffering "equivalent to the pain accompanying serious physical injury, such as organ failure, impairment of bodily function, or even death." Even then it did not qualify as torture if the torturer was seeking information from the victim. An action only counted as torture if the torture was gratuitous.

On February 7, 2002, President Bush signed an order denying Geneva Conventions protection to detainees in the War on Terrorism. From that point on, the word went out to members of the U.S. military, to agents of the CIA and other government agencies, and to private contractors involved in interrogations and detentions that they could use techniques and punishments which were illegal according to U.S. law. For example, it was now acceptable to cover a prisoner's face with cellophane or cloth and pour water on him so that he thought he was suffocating to death. According to the Bush administration, this form of mock execution, known as waterboarding, which was considered illegal during the Vietnam War, was no longer classified as torture.

At every level, from the highest officers and civilian officials to low-ranking enlisted personnel, Americans passed on the order to engage in practices that broke U.S. law. In Hamdan v. Rumsfeld, the Supreme Court ruled that detainees in the War on Terrorism really are covered by the Geneva Conventions and, by extension, by the U.S. War Crimes Act. Now dozens, if not hundreds, of U.S. soldiers, CIA agents and private contractors are confronting the fact that they violated the War Crimes Act at Guantánamo, in Afghanistan, in Iraq and at "black sites" around the world. Considering that the Pentagon admits that at least 35 detainees in Iraq and Afghanistan have been murdered by their guards, many of these Americans could face the death penalty.

Undoubtedly, all of those Americans who committed torture and other war crimes will offer the defense that they didn't know that what they were doing was illegal because they received their orders from officers, who received them from generals, who received them from Secretary of Defense Donald Rumsfeld, who received them from the commander-in-chief, George W. Bush.

As more and more cases of war crimes come to light, there will be a tendency to forgive the soldiers and others who violated the War Crimes Act because they were just following orders, and to give them light punishments or no punishments at all. The higher-ups, like President Bush, Secretary of Defense Rumsfeld, Major General Geoffrey Miller and Lt. General Ricardo Sanchez, will probably not even be charged because they are too powerful. If this occurs it will send a message to future generations that all laws relating to human rights in the United States are irrelevant if the president says it is alright to ignore them.

can you handle the truth?

[-] 1 points by Jflynn1964 (-206) 6 years ago

We were at war, where US lives were at stake, the torture memos don't bother me. Personally, I am against torture but I understand the administration's use of them. I;m against Obama's use of drones especially in Pakistan but again, we are at war and people's lives are at stake, so it doesn't bother me.

The bigger issue is should we be at war.

[-] 0 points by XenuLives (1645) from Charlotte, NC 6 years ago

No, we shouldn't, but I would rather see machines doing the dirty work than flesh-and-blood soldiers.

[-] 0 points by JuanFenito (847) 6 years ago

Yes, thank you, Bush did bad things too, and you know this guy is a Bush supporter, because he is criticizing Obama. You can tell them when they start talking about things like corruption in the administration instead of talking about what the last president did that was just as bad four years ago. Please don't stop getting the truth out, I wish every member of this site had your tenacity and drive for truth.