Fisker technology shouldn’t go to the Chinese, U.S. senator says
U.S. Sen. Chuck Grassley, R-Iowa: "Like A123, this looks like another example of taxpayer dollars going to a failed experiment."
WASHINGTON (Bloomberg) -- The technology of Fisker Automotive Inc., the U.S. plug-in hybrid carmaker that owes American taxpayers about $200 million, shouldn’t be sold to Chinese companies, U.S. Senator Charles Grassley said.
Grassley, an Iowa Republican, and Senator John Thune, a South Dakota Republican, compared the maker of the $103,000 Karma to its battery supplier, A123 Systems Inc., which received $129 million in grants from the U.S. Department of Energy before filing for bankruptcy and agreeing to be sold to a Chinese company.
China's Zhejiang Geely Holding Group is favored to secure a majority stake in Fisker, two sources familiar with Fisker's search for a strategic investor or partner told Reuters. Sources close to Fisker said Geely appeared to be the preferred suitor. Fisker's corporate leaders and their advisers believe Geely is "more serious" and "passionate" about Fisker and its technology, one of the individuals told Reuters.
Fisker also is weighing a $350 million offer from Dongfeng Motor Corp. that would give the Chinese carmaker majority control, people with knowledge of the matter told Bloomberg last week.
“Like A123, this looks like another example of taxpayer dollars going to a failed experiment,” Grassley, his party’s ranking member on the Senate Judiciary Committee, said in an e- mailed statement. “Technology developed with American taxpayer subsidies should not be sold off to China. I hope there’s at least some accountability at the Department of Energy, but given its track record, I’m not holding my breath.”
Bill Gibbons, an Energy Department spokesman, said in an e- mail that the department’s loan program “has strict conditions in place to protect taxpayers. The department is working with Fisker to review its revised business plans and determine the best path forward so the company can meet its benchmarks, produce cars and employ workers here in America.”
Fisker, based in Anaheim, Calif., received a $529 million loan from the Energy Department in 2010 for U.S. engineering and development work and U.S. vehicle production.
It drew down $193 million before the rest was frozen in May 2011 for failing to meet required milestones on the Karma. Fisker was supposed to use the rest of the money to build a second model at a closed General Motors Co. plant in Wilmington, Delaware. Fisker has said it’s delivered about 1,500 Karmas.
Roger Ormisher, a spokesman for Fisker, said in an e-mail that given “the confidential nature of this matter, at this point in our process we can only confirm that the company has received detailed proposals from multiple parties in different continents which are now being evaluated by the company and its advisers.”
Fisker was one of five loan recipients in a program intended to spur the development of alternative-fuel vehicles. The company hasn’t produced cars since A123 stopped making batteries, and has had to repair vehicles it already sold following recalls on defective battery packs and cooling fans that could cause fires.
Thune, in an e-mailed statement, called it “troubling to see that yet another struggling taxpayer-backed company might be purchased under duress by a Chinese company.”
Grassley and Thune complained last year about Chinese investment in A123 and Fisker.
Fisker’s challenges were magnified when 338 Karmas, worth more than $33 million, were destroyed by flooding during Hurricane Sandy and XL Insurance America Inc. refused to pay a damage claim, according to a lawsuit filed Dec. 28.
The cars, which are assembled in Finland, were sitting at the Port of Newark in New Jersey awaiting recall repairs on the batteries and cooling fans, according to the complaint. XL argued the cars weren’t “in transit” as required by the company’s policy, the lawsuit said.Contact Automotive News