Obama Administration Had Advance Warning On Electric Car Failure (page 2)
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The potential loss of $171 million would be largest loss of federal loan money since the 2011 failure of solar panel maker Solyndra, which declared bankruptcy and laid off all its workers after receiving a $528 million loan from the Energy Department.
The Energy Department seized $21 million from Fisker this month as it continued to seek repayment from the car maker for the 2009 loan. A payment from Fisker was due Monday, but was not made, a DOE official said.
Henrik Fisker, the company’s namesake and founder, was scheduled to testify at Wednesday’s hearing. Fisker, who was forced out as CEO as the company’s troubles mounted, said in prepared testimony that he remained proud of the company’s “cutting edge technology,” which he said could “pave the way for a new generation of American car manufacturing.”
Fisker disputed claims by some critics that the Anaheim, Calif.-based company needed the federal loan to survive. Fisker said a high-ranking Energy Department official approached him in 2008 and asked him to apply for the loan, which is intended to boost electric cars and other advanced vehicles.
“At that time, we already had significant financial backing from private investors,” Fisker said in the prepared testimony. In all, the company received more than $1 billion in private financing, he said.
The company met initial milestones set up by the Energy Department before informing the department that it would not meet future goals on time, Fisker said. He denied that any political influence was used to obtain the loan or in negotiations over its terms.
“I am not aware and do not believe that any improper political influence was used in connection with the company’s loan application or subsequent negotiations with the Department of Energy,” Fisker said.
Vice President Joe Biden announced in late 2009 that Fisker would reopen a shuttered former General Motors factory in Wilmington, Del., to produce plug-in, electric hybrid vehicles. The plant was never completed and never produced any cars.
Fisker said the company was hurt badly by the 2008 recession and by the bankruptcy of A123 Systems, a Massachusetts company hired by Fisker to make batteries for the Karma. A bankruptcy judge granted Fisker $15 million in a claim against A123 for breach of warranty, a fraction of Fisker’s initial claim.
Fisker has not built a vehicle since last summer and has failed to secure a buyer as its cash reserves have dwindled.
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