During a congressional hearing, Fisker Automotive founder and former CEO Henrik Fisker said that he did not think taxpayer dollars were lost on the Obama administration’s $192 million loan guarantee to the financially troubled electric-car maker.
“I do not believe that any taxpayer dollars have been lost,” Fisker said in the House Oversight Committee hearing, arguing that the company was still viable.
Fisker left the company earlier this year.
The luxury hybrid manufacturer has made headlines recently for its financial troubles and its hiring of legal and PR help to handle a potential bankruptcy. The company was awarded a $529 million loan guarantee in 2009, but only drew on $129 million before the Department of Energy cut them off.
The company has been experiencing trouble for a while. According to a report by the research firm PivCo, Fisker was allowed to continue to draw down on their loan even after violating the loan’s terms multiple times.
“They had a triple-C rating, they’re under collateralized, they can’t meet payroll, and now we’re surprised?” Ohio Republican Rep. Jim Jordan said in the hearing. “All the evidence points to that they should never have gotten the loan in the first place.”
PivCo also found that Fisker spent $660,000 in taxpayer dollars and venture capital funds for each car it sold. However, the company’s car, the Karma, only sold for about $103,000 per vehicle — meaning the company lost $557,000 on every luxury hybrid it sold.
Earlier this week, the Obama administration seized $21 million from Fisker after it missed its first payment on a $192 million loan guarantee it received.
“There were mistakes made that [former Republican presidential candidate] Mitt Romney wouldn’t have made the day he left grad school,” said California Republican Rep. Darrell Issa.
Fisker is the latest troubled company on a growing list of failed or faltering companies that received loan guarantees from the Obama administration. But House Democrats argued that Fisker’s situation should not cast a bad light on the administration’s loan program, highlighting success stories like Tesla — an electric-car maker that received a $465 million loan through the same DOE program as Fisker.
“That loan is on track to be repaid and instead we’re focusing on a $192 million loan made to Fisker,” said Pennsylvania Democratic Rep. Matt Cartwright. “There should be congressional oversight, but there’s an extensive amount of cherry picking here.”
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