During an exchange during the 2012 Vice-Presidential Debate Paul Ryan accused Joe Biden of wasting taxpayer dollars on green energy projects. Ryan said:
Ryan:Look at just the $90 billion in stimulus. The vice president was in charge of overseeing this. Ninety billion in green pork to campaign contributors and special interest groups.”
Biden: It was a good idea, Moody’s and others said that this was exactly what we needed to stop this from going off the cliff. It set the conditions to be able to grow again.
Ryan: Was it a good idea to spend taxpayer dollars on electric cars in Finland, or on windmills in China?
Ryan’s claim mirrored that of an Americans for Prosperity TV ad that also blamed President Barack Obama for sending stimulus money overseas:
Tell President Obama, American tax dollars should help American taxpayers. Instead, $2.3 billion in tax credits funded jobs in Mexico, Finland and China.
Washington promised to create American jobs. We passed their stimulus. But that’s not what happened. Fact: Billions of taxpayer dollars spent on green energy went to jobs in foreign countries. The Obama administration admitted the truth, that $2.3 billion of tax credits went overseas, while millions of Americans can’t find a job. $1.2 billion to a solar company that’s building a plant in Mexico. Half a billion to an electric car company that created hundreds of jobs in Finland. And tens of millions of dollars to build traffic lights in China.
Many conservatives have criticized the Obama administration’s “green” investments, accusing the administration of wasteful spending, crony capitalism and, in the case of Fisker, giving a tax subsidy to the wealthy to buy a car that costs over $100,000.
Fisker Automotive, Inc. is an American automaker founded by Henrik Fisker, based in Anaheim, California. The company launched the Fisker Karma, a luxury green plug-in-hybrid in 2008 that costs $103,000. By September 2012, the company had delivered over 1500 cars to customers. Fisker’s private investors include Kleiner Perkins Caulfield & Byers, Palo Alto Investors LLC and lithium-ion battery maker A123 Systems Inc.
On October 27, 2009, Fisker officials announced that the company had signed a letter of intent to take control of the Boxwood Road Plant (previously owned and operated by General Motors) in Wilmington, Delaware. Production was scheduled to begin in late 2012. Fisker Automotive anticipates Project NINA would ultimately create or support 2,000 factory jobs and more than 3,000 vendor and supplier jobs by 2014, as production ramps up to full capacity of 75,000-100,000 vehicles per year. More than half will be exported, the largest percentage of any domestic manufacturer. Vice President Joe Biden attended the announcement.
In April, 2010, the Energy Department awarded Fisker $529 million in loans from the $25 billion Advanced Technology Vehicles Manufacturing loan program. Together Fisker and Tesla Motors account for over $1 billion in funding from the DOE.
The U.S. awarded Fisker $169 million for engineering of the Karma and $359 million for production of the Nina (later renamed The Atlantic), a midsize sedan at a former General Motors Co. auto plant in Wilmington, Delaware. Delaware gave another $21 million in grants and loans to Fisker for its investment in the state.
On Oct 20, 2011 it was reported by ABC News that the company was not able to build the cars in the United States because it could not find a facility capable of doing the work. Henrik Fisker, CEO of the company at the time, 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. Fisker released a rebuttal to some claims, including that it sources more than than 45% of the components for the Karma from approximately 40 suppliers located in the U.S. and that the company has no political affiliation.
On February 7, 2012, Fisker said the company had stopped work on the Delaware auto factory after the DOE blocked access to its federal loan, because Fisker failed to start making or selling cars by deadlines tied to the loan agreement. Fisker laid off 26 people in Wilmington. Bloomberg reported that Fisker had drawn down $193 million from the DOE loans.
In April, 2012, it was announced that a restructuring expert had been hired by the DOE to track the company’s capital-raising efforts.
In Sept 26, 2012, Reuters reported that Fisker announced it had raised new financing of $100 million, bringing the total amount raised by private investors since 2007 to $1.2 billion.
In October 2012, Fisker said it was looking for strategic partnerships with a view to an IPO. The company is looking to unfreeze the DOE loan after the Presidential Election.
The Company’s Karma faced several problems in 2012, including safety recalls and a negative Consumer Reports review.
What were the terms of the loan?
The DOE awarded Fisker $169 million for engineering of the Karma and $359 million for production of the Nina. The funds for the Nina were stopped because the Karma took too long to enter production. Bloomberg reported that Fisker had drawn down $193 million from the DOE loans, mainly for Karma engineering in the U.S.
Was the money given to Fisker part of the stimulus?
No. The money was given as part of the DOE’s $25 billion Advanced Technology Vehicles Manufacturing program. Neither Ryan, nor the AFP ad say that the funds were directly from the Stimulus but there is some conflation between the claims that the stimulus was wasteful and the Fisker claims.
How many jobs has Fisker created in the U.S?
According to Fisker, 650 people are employed at Fisker’s headquarters in Anaheim.
Was the money used to create jobs in Finland?
On August 16, 2012, the company said it was supporting up to 250 jobs in Finland and that no Energy Department funds are used outside the U.S.
What is the current status of the Wilmington plant?
As of August, 2012, the factory is closed and only has 16 employees, far fewer than the 2,000 forecast by the government. However, the company hopes to unfreeze the remaining DOE funds in late 2012 and to initiate Nina/Atlantic production.
1. Taking the company at its word no taxpayer dollars were spent on jobs in Finland.
2. Paul Ryan’s claim is incorrect
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