$529M DOE Loan Spawns $97K Made-in-Finland Cars 372
theodp writes "With PR successes like the Fisker Karma, does the Department of Energy need to worry about PR failures like Solyndra? ABC News and others are reporting that electric car company Fisker, which received a $529M federal loan guarantee with the approval of the Obama administration, is assembling its first line of $96,985 base-priced hybrid cars in Finland, saying it could not find a facility in the United States capable of doing the work. According to Green Car Reports, Fisker said the EPA had rated the Karma at 54 MPGe (MPG-equivalent) when running on electricity from its battery pack, and that the EPA-rated electric range would be 32 miles. Omitted from the press release was the 20-mpg rating for a Karma running on power from its range-extending gasoline engine."
Re:Sincerity? (Score:5, Interesting)
Funny, Tesla doesn't have any problems building fully electric cars at the ex-NUMMI plant in California, and Chevrolet doesn't have any problems building the range-extended Volt in Hamtramck/Detroit, MI. Sounds like Fisker should have their loan called.
oh, really? (Score:5, Interesting)
Re:The DOE loan is for the Nina (Score:3, Interesting)
FTA: "The loan to Fisker is part of a $1 billion bet the Energy Department has made in two politically connected California-based electric carmakers[...]"
Sounds like it's both.
Re:Sincerity? (Score:2, Interesting)
Big difference to make only few cars vs making a lot of cars. The factory in Finland specializes on small patches and high profile cars such as Porche Boxter. Even the article says first line of cars coming from Finland. If the car sells more than few thousand then US plants can be asked to make bigger orders. I doubt US has such an advanced manufacturer capable of making small patches cost efficiently.
Re:Sincerity? (Score:3, Interesting)
You may refer to it as generous, might be, but I'd more prefer to consider it to simply be humane, the ice-cold greed that somehow have become modus operandi in most of the world is nothing short of pathological.
Re:Sincerity? (Score:5, Interesting)
Actually, the availability of certain manufacturing processes and related skills is often localized. There are several kinds of modern manufacturing process which appear to be unavailable or uncommon in the US.
One of the products I designed has certain parts (passive, but necessarily complex in shape) which are made in Finland, simply because no US or Canadian supplier could be found who could make them in moderate quantities. The only US bids received stated that they assumed we had made an error in the RFQ, and actually required quantities in the tens of thousands. These suppliers relied on a manufacturing process which required that scale and would result in prohibitively expensive unit costs for a production run of mere hundreds. The supplier in Finland uses an entirely different industrial process, and can produce single digit quantities if necessary, at quite acceptable unit prices.
How These Government Investments Work (Score:5, Interesting)
Electric car investment is clearly necessary. Without the investment, no electric cars. Private industry has had the opportunity for years, but blew it off in favor of gas guzzling SUVs and other trucks with suspended emissions regulations that it could sell to a market greased with fakeout balloon credit. That bizmodel crashed the car industry, while helping to drive up gas prices to $4+ and oil prices to $120+ - and made the Greenhouse even worse faster. Only when the public bailed out the US car industry (to save the rest of the US economy and industrial base) did it start to turn to serious electric product development.
But it's not enough. And because a lot of strategic progress hides behind multiple risky options, private industry (and finance) doesn't invest in it. Because those normal investors don't know how to invest in anything - which is why the entire investment industry had to get bailed out by the public. So the electric car investments have to come from the public, too.
Now, those investments are risky, as I said. Not too risky to do any of them, but too risky for each one to pay off. And when the government invests, it's far more efficient for it to invest in larger single investments, because managing a lot of little ones is beyond the ability to centrally plan and organize, especially given the volume and complexity of reporting and oversight that comes with any government contract. And then some of these investments will fail. Big ones will lose a lot of money.
Which is why private investment is better. Except private investment isn't doing it. Even before the Credit Bubble crashed, across many different bubbles (and even sustained growth), private investment wasn't doing it. Yet if we don't do it, either our resources and pollution crises will damage us more than the cost of the investment, or a foreign government will do it in ways that hurt us to help them, or most likely both.
So the government will have some Solyndras. It will have some Fiskers. Just as private investment would have had, though probably overall less wasted investment because there is so much more transparency (even if not enough) than when private investors make their deals - and fail. Plus government investment tends to take other policies, like US labor growth, into account that private investment ignores or worse. Not all the time, as is perhaps the case here with Fisker, but more than when private investment does it. Which, again, it is not doing here. And government investments, even when the commercial venture fails, tend to produce more usable lessons learned (and tech spun off) than private failures that usually keep the intellectual value suppressed in some new owner, or just left to rot entirely without a new use.
Re:oh, really? (Score:3, Interesting)
Re:Sincerity? (Score:4, Interesting)
Excellent point. Basically, the USA is little different from other third-world countries like Mexico. If you want to build a giant number of something, sure, you can do it in the USA; you'll have to spend a lot of money to build a factory, hire a labor force, train them, etc., just like if you wanted to build VWs in Mexico. But if you want something built in small numbers quickly, you need already-existing manufacturing capacity that's set up and flexible enough for small quantities, and you're not going to get that here in certain industries. It's kind of like asking Intel to make a small batch of some custom ASICs at one of their fabs here in Arizona; it's not going to happen, even though they're perfectly capable of churning out huge quantities of the latest Core2 CPUs. To get your ASICs, you can forget about America; you'll have to go to Taiwan and ask a contract fab over there like TSMC to make it for you.
Re:Fisker is from Scandinavia (Score:5, Interesting)
Maybe pushing work back to the home region?
I doubt the company have a secret agenda about pushing to Finland. Why?
Manufacturing costs in Scandinavia is a lot higher, it's not uncommon for unskilled factory workers to make 25 USD per hour, not counting overtime, late hours etc.
From the article:
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.
Seriously in the process of spending half a billion how much is 500 manufacturing jobs?