Get ready for Fisker's public flagellation
|Mark Rechtin is West Coast editor of Automotive News.|
LOS ANGELES -- Top executives from Fisker Automotive are going to be called before Congress on April 24 for a public flagellation.
The reason: Alleged profligacy with $193 million of taxpayer money from Department of Energy loans that are unlikely to be repaid.
How dare Fisker be so wasteful, liberal legislators will undoubtedly cry. This is just like Solyndra, the right wing will scowl.
Get a grip.
Out of the hundreds of billions of dollars of taxpayer money squandered on bridges to nowhere, sports stadiums with no tenants, and fighter planes that fall from the sky, and Congress is going to get bent about this?
It's chump change. And it's not like Fisker spent the money getting the Rolling Stones to play their Christmas party or hiring cocaine-fueled prostitutes to fly on the company Learjet.
Fisker was working on a potentially revolutionary technology that cost a lot of money to develop, and which was dependent on another new-technology venture -- batteries from A123 Systems -- that went belly-up.
Sure, it was a gamble, giving seed money from the taxpayers for a venture that might or might not work. But Fisker's rainmakers were also doing their part. Fisker raised $1.2 billion from venture capital funds that stand to lose a lot more than taxpayers.
Lest we forget, the DOE loans were a program -- launched under the Bush administration, signed-off by the Obama White House -- expressly made to help get green companies moving. As anyone who has ever worked at a start-up will tell you, never turn down free money.
Start-ups are inherently risky ventures. There's myriad reasons why they may fail. Perhaps is as simple as technology not working as well as expected. Or macro economic forces might destroy the original business plan.
Should the government invest in unproven technology? Sure. It's called research and development. It's called getting a competitive advantage. We do it with Big Oil and Big Pharma companies all the time.
But if it's for a start-up -- regardless of the technology -- don't expect the government's track record to look good, particularly in the capital intensive automotive industry.
The contradictory crocodile tears on Capitol Hill will be political posturing, nothing more. If Fisker had been a success, these same legislators would be crowing about how smart they are at spending our money.
You can reach Mark Rechtin at email@example.com. -- Follow Mark on