Electric Car Company Building Vehicles in Finland After Obtaining US Gov't Loan From Obama Administration

The Obama Administration and Department of Energy are defending a $529 Million loan to Anaheim, CA-based electric car manufacturer Fisker after a report from ABC News on Thursday highlighted the fact that two years ago, the Administration approved the company shifting production overseas to Finland.

Vice President Joseph Biden heralded the Energy Department's $529 million loan to the start-up electric car company called Fisker as a bright new path to thousands of American manufacturing jobs. But two years after the loan was announced, the company's manufacturing jobs are still limited to the assembly of the flashy electric Fisker Karma sports car in Finland.

"There was no contract manufacturer in the U.S. that could actually produce our vehicle," the car company's founder and namesake told ABC News. "They don't exist here."

Henrik Fisker said the U.S. money has been spent on engineering and design work that stayed in the U.S., not on the 500 manufacturing jobs that went to a rural Finnish firm, Valmet Automotive.

The loan to Fisker is part of a $1 billion bet the Energy Department has made in two politically connected California-based electric carmakers producing sporty -- and pricey -- cutting-edge autos. Fisker Automotive, backed by a powerhouse venture capital firm whose partners include former Vice President Al Gore, predicts it will eventually be churning out tens of thousands of electric sports sedans at the shuttered GM factory it bought in Delaware. And Tesla Motors, whose prime backers include PayPal mogul Elon Musk and Google co-founders Larry Page and Sergey Brin, says it will do the same in a massive facility tooling up in Silicon Valley.

Fisker is more than a year behind rolling out its $97,000 luxury vehicle bankrolled in part with DOE money. While more are promised soon, just 40 of its Karma cars (below) have been manufactured and only two delivered to customers' driveways, including one to movie star Leonardo DiCaprio.

A department of Energy spokesman defended the loan to Fisker, saying that the company also plans on producing a $50,000 hybrid called the Nina at a shuttered General Motors plant in Delaware.

"The Department's funding was only used for the U.S. operations," Energy Department spokesman Dan Leistikow wrote. "The money could not be, and was not, spent on overseas operations. The Karma also relies on an extensive network of hundreds of suppliers in more than a dozen U.S. states."

He said the first part of the loan, $169 million, supported engineering work at Fisker's U.S. facilities as the company "developed the tools, equipment and manufacturing processes for Fisker's first vehicle" -- though that work so far has not contributed to a production line in the U.S.

But Leistikow said the rest of the loan is still supporting U.S. production of another vehicle line called the Nina.

"Fisker is using this funding to bring a shuttered General Motors plant in Delaware back to life and employing more than 2,500 workers. Fisker was attracted to this site in part by the opportunity to rehire some of the trained, dedicated workers who lost their jobs when that plant closed," Leistikow said.

However, industry sources are claiming that Fisker's production of the Nina at the Delaware site has been pushed back to mid-2013. Fisker claims that the car has been designed and built, but remains under wraps to maintain a competitive edge.

Moreover, according to a recent Forbes article, once off its electric motor (reportedly good for 32 miles) the Fisker's Karma hybrid actually gets worse gas mileage than a late model Ford Explorer SUV

Does anybody else remember the various factory and workshop tours that President Obama embarked upon during 'Recovery Summer' last year? All of them seemed to pivot around so called 'Green Jobs'- factories that made electric vehicle components, solar panels or batteries for hybrids. And it seems that this wasn't really by accident, either.

Subsidized California Electric Car Company Folds, Leaves City of Salinas on the Hook for $500,000

Hmm....who didn't see this coming?

A Salinas car manufacturing company that was expected to build environmentally friendly electric cars and create new jobs folded before almost any vehicles could run off the assembly line.

The city of Salinas had invested more than half a million dollars in Green Vehicles, an electric car start-up company.

All of that money is now gone, according to Green Vehicles President and Co-Founder Mike Ryan.

The start-up company set up shop in Salinas in the summer of 2009, after the city gave Ryan a $300,000 community development grant.

When the company still ran into financial trouble last year, the city of Salinas handed Ryan an additional $240,000. Green Vehicles also received $187,000 from the California Energy Commission.

Salinas Mayor Dennis Donohue said he was "surprised and disappointed" by the news. City officials were equally irked that Ryan notified them through an email that his company had crashed and burned.

I suppose I shouldn't laugh, but as the ruling party is attempting to shut down oil platforms, coal-fired power plants or natural gas drilling through regulatory fiat or executive orders, they continue doling out subsidies and grants for electric cars or 56 MPG vehicles all in the name of 'green jobs'.

And poorly thought-out ventures like Green Vehicles, heavily subsidized by governments in the name of 'going green', will continue to fall flat on their face as long as the ruling party assumes that they can pick winners and losers in the private sector.

[Hat tip: Labor Union Report; The Lonely Conservative]

General Electric, General Motors Avoid Paying Taxes for 2010

While taxpayers and small business owners are poring over their IRS 1040 forms, I'm sure this bit of news from a pair of corporations that have benefitted from government bailouts and lagresse will bring a bit of joy and wrmth to their weary hearts.

A little over two months ago, GE Chairman Jeffery Immelt was appointed to an economic panel by the Obama Administration. This was the same conglomerate who lobbied for cap & trade back in 2009 and who's subsidiary TV networks of NBC and MSNBC acted as unabashed cheerleaders for Obama during his 2008 Presidential campaign. Now it's been learned that General Electric will pay nothing in taxes for 2010 and will in fact be getting $3.2 billion in tax breaks from the US government thanks in part to concentrating most of its $14.2 billion in profits offshore. More than half of GE's current workforce is outside the United States as well.

Back in November the Wall Street Journal reporteda few weeks before GM's stock was set to be re-listed in the NYSE that General Motors could wind up with tax breaks worth an estimated $45 billion thanks in part to lossesincurred prior to the bailout.

GM, which plans to begin promoting its relisting on the stock exchange to investors this week, wiped out billions of dollars in debt, laid off thousands of employees and jettisoned money-losing brands during its U.S.-funded reorganization last year.

Now it turns out, according to documents filed with federal regulators, the revamping left the car maker with another boost as it prepares to return to the stock market. It won't have to pay $45.4 billion in taxes on future profits.

The tax benefit stems from so-called tax-loss carry-forwards and other provisions, which allow companies to use losses in prior years and costs related to pensions and other expenses to shield profits from U.S. taxes for up to 20 years. In GM's case, the losses stem from years prior to when GM entered bankruptcy.

Usually, companies that undergo a significant change in ownership risk having major restrictions put on their tax benefits. The U.S. bailout of GM, in which the Treasury took a 61% stake in the company, ordinarily would have resulted in GM having such limits put on its tax benefits, according to tax experts.
"The Internal Revenue Service has decided that the government's involvement with these companies, both its acquisitions plus its disposals of their stock, means they should be exempt" from the rule, said Robert Willens, a New York tax consultant who advises investment banks and hedge funds.

The government's rationale, said people familiar with the situation, is that the profit-shielding tax credit makes the bailed-out companies more attractive to investors, and that the value of the benefit is greater than the lost tax payments, especially since the tax payments would not exist if the companies fail.

The pricetag for the GM bailout was thought to have reached at least $30 billion. The fact that the government was still a stakeholder in General Motors at the time could help explain the DOT's aggressive pursuit of Toyota Motors for a number of safety issues last year.