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$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."
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$529M DOE Loan Spawns $97K Made-in-Finland Cars

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  • Comment removed (Score:5, Insightful)

    by account_deleted ( 4530225 ) on Friday October 21, 2011 @12:02PM (#37794716)
    Comment removed based on user account deletion
    • Re:Sincerity? (Score:5, Interesting)

      by TooMuchToDo ( 882796 ) on Friday October 21, 2011 @12:07PM (#37794798)

      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.

      • Re: (Score:2, Interesting)

        by Anonymous Coward

        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:4, Interesting)

          by Grishnakh ( 216268 ) on Friday October 21, 2011 @12:58PM (#37795696)

          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.

          • by JTsyo ( 1338447 ) on Friday October 21, 2011 @01:10PM (#37795888) Journal
            What is this? A hardware analogy for a car issue?
          • by Lumpy ( 12016 )

            Not an excellent point, a straw man.

            There are several closed car assembly plants that can easily be restarted for minimal capitol and used for short runs of 1000-2000 cars. It's just that most Executives cant think like that so they fail to see the ability to leverage existing abandoned low cost assets that can be purchased for very little and used.

            1000-2000 cars can be HAND BUILT by skilled workers. and an assembly line that was state of the art in 1980 can easily be used by those skilled workers to do

            • I'm sorry, this doesn't sound right to me. It sounds like this Fisker company wanted a contract manufacturer to build the cars for them (didn't the article say this was the same plant used to make some Porsche model?), they didn't want to build an assembly plant from the ground up. Even if they took over some closed plant, they'd have to retool it ($$$), and hire and train a new labor force (time and $$$). It's not like there's thousands of skilled workers sitting around waiting for a job; when people ge

              • No, you're precisely wrong.

                This story turns out to be total BS. The DoE loan to Fisker was spent on American carmaking jobs [energy.gov]. Fisker does also employ 20% of that amount in Finland, but the US public money was not spent on that. Fisker's successful use of the DoE loan employed 2500 Americans who were cut loose by American car corps during this recession, and started back up an American car factory where they work. Since it's successful, Fisker will be repaying the loan.

                The government invests money private ind

            • by bberens ( 965711 )
              You really under-estimate the cost of hiring a full set of staff to run a place like that. The ramp up time before you can be productive is massively expensive. Your best bet is to find a place teetering on closing and then it's luck of the draw for timing, contracts, etc.
        • Re:Sincerity? (Score:4, Informative)

          by Wyatt Earp ( 1029 ) on Friday October 21, 2011 @12:59PM (#37795710)

          There are factories in the US building small volume high quality sports cars, Viper, Corvette, CTS, CTS-V (coupe, sports wagon, sedan), BMW, Audi, plus lower volume companies and aftermarket makers like Panoz

          The Boxster and Cayman production was moved back to Germany this year.

          "Boxster and Cayman production was outsourced to Valmet Automotive in Finland from 1997 to 2011, after which when assembly was moved back to the German homeland."

          http://en.wikipedia.org/wiki/Porsche#Production_and_sales [wikipedia.org]
          http://www.valmet-automotive.com/automotive/bulletin.nsf/headlinespubliceng/ADB15534224D1B0CC225788400418888 [valmet-automotive.com]

          Fisker got the loan with the promise they'd use the factory in Delaware, if they aren't using it, they need to return the money.
          http://en.wikipedia.org/wiki/Fisker_Automotive#US_federal_loan [wikipedia.org]

        • Need to make a few hundred of something? Europe may be your answer.
          Need to make a few hundred thousand? USA.
          few hundred million? China.

      • by jhoegl ( 638955 )
        That is as interesting as the 32 mile battery life and the 20mpg gas engine for 95K/per car

        based on hybrid car standards, this is pretty darn terrible.
        • by ackthpt ( 218170 )

          That is as interesting as the 32 mile battery life and the 20mpg gas engine for 95K/per car

          based on hybrid car standards, this is pretty darn terrible.

          Sounds likt he Homer-mobile equivilent

        • based on hybrid car standards, this is pretty darn terrible.

          By any standards, this is quite terrible. So with a gallon of fuel and a full charge you can drive 32 + 20 = 52 miles. I can drive a bit over 60 miles per UK gallon / 50 miles per US gallon, without having to charge. And immediately after that, I can go another 60 miles with the next gallon, without having to recharge at all. And my car costs just a tiny little bit less than $95,000.

        • Re:Sincerity? (Score:4, Insightful)

          by EdZ ( 755139 ) on Friday October 21, 2011 @12:56PM (#37795636)
          Based on regular car standards (here in the UK, anyway) 20mpg is absolutely abysmal.
    • Maybe pushing work back to the home region?

      • by jopsen ( 885607 ) <jopsen@gmail.com> on Friday October 21, 2011 @01:00PM (#37795716) Homepage

        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?

        • it's not uncommon for unskilled factory workers to make 25 USD per hour

          Don't ever look at pay rates for unionized workers.

    • Re:Sincerity? (Score:5, Interesting)

      by AliasMarlowe ( 1042386 ) on Friday October 21, 2011 @12:34PM (#37795282) Journal

      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.

      • "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 downside of "economies of scale". You're right, I'm sure. Sometimes, in order to make lots of stuff cheaply, you have to give up the ability to make small amounts of stuff cheaply.

  • Fisker? (Score:4, Funny)

    by Third Position ( 1725934 ) on Friday October 21, 2011 @12:05PM (#37794758)

    The company name is "Fisker"? It's nice to see the American taxpayer getting exactly what he's paying for these days.

  • oh, really? (Score:5, Interesting)

    by superwiz ( 655733 ) on Friday October 21, 2011 @12:07PM (#37794802) Journal
    They couldn't find a facility? Wasn't the whole point of these programs to build new facilities?
    • Re:oh, really? (Score:4, Insightful)

      by JBMcB ( 73720 ) on Friday October 21, 2011 @12:27PM (#37795162)

      No, the point of the program is free money from the federal government. And the politicians can say they've invested $int64 billion dollars in environmental programs. They don't really care what those programs are, they just need to get rid of the money.

      • by ArcherB ( 796902 )

        No, the point of the program is free money from the federal government. And the politicians can say they've invested $int64 billion dollars in environmental programs. They don't really care what those programs are, they just need to get rid of the money.

        They looked at environmental spending and said, "Something must be done!"
        Someone said, "Here, is something."
        Everyone said, "Then it must be done!"

    • by necro81 ( 917438 )

      They couldn't find a facility? Wasn't the whole point of these programs to build new facilities?

      Fisker has a facility in the United States - in Delaware [autoblog.com]. They will use this facility, much like Tesla is using the old NUMMI facility in SoCal, for their mass manufacturing. The problem, so Fisker claims, is that they wanted to use a contract manufacturer for their initial production run (presumably while getting their main facility running, and by debugging their mfg processes with the early production run)

      • Re: (Score:3, Interesting)

        by CaptSlaq ( 1491233 )
        Along side BMW [bmwusfactory.com], Mercedes Benz [mbusi.com], Subaru [wikipedia.org], Honda [hondaengineering.com].... And a even larger number of small production stuff like kit car manufacturers and even more interesting manufacturers like Local Motors [local-motors.com], saying that 'it couldn't be found' would take some explaining in my opinion.
  • Great (Score:5, Insightful)

    by benjamindees ( 441808 ) on Friday October 21, 2011 @12:08PM (#37794818) Homepage

    So, not only are middle class tax dollars used to bail out and ensure the bonuses of those capable of affording a $90,000 "green" sports car, but they're also used to subsidize the production of said sports cars in another fucking country.

  • by rednip ( 186217 ) on Friday October 21, 2011 @12:10PM (#37794840) Journal
    The DOE loan is for the Nina, it'll be built in An shutdown Saturn plant [wikipedia.org] in Delaware. Not the Karma.
    • Re: (Score:3, Interesting)

      by Cinder6 ( 894572 )

      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.

    • http://gigaom.com/cleantech/fisker-scores-529m-doe-loan-to-start-project-nina/ [gigaom.com]

      Actually, the loan is for both vehicles, though the Karma was always intended to be assembled overseas.

      It's sad that anyone with Google and a couple spare minutes can do a better job of vetting stories than the Slashdot editors.

    • by mtrachtenberg ( 67780 ) on Friday October 21, 2011 @12:24PM (#37795110) Homepage

      Yes, the DOE loan is for the Delaware plant. This fact is well-known: http://www.examiner.com/electric-car-in-national/fisker-automotive-grabs-529-million-from-the-doe

      And that omission, soulskill, is either incompetent or dishonest.

  • Not sure of the Fiska car is a sports car...it'd better be for $100K. But if you're interested in comparing the MPG between the two, the Tesla Roadster Wikipedia entry [wikipedia.org] has an interesting breakdown of how it's calculated for electric cars. Short answer is it's about 123 MPG, but it's more complicated than that.

    And a handy tidbit: apparently the replacement battery for the Tesla (7 years or 70,000 miles) is $12,000. And a funny story: getting off the ferry back home, a Tesla Roadster was parked on the curb

    • And a handy tidbit: apparently the replacement battery for the Tesla (7 years or 70,000 miles) is $12,000

      Wow, seriously? That's a steal!

      Elise (or AW11, or whatever) - engine + electric motor + replacement Tesla pack = Tesla Roadster for the middle class!

    • by jasno ( 124830 )

      Shit, I just modded.. ah well.. gotta respond to this.

      Anyone who has equity in their home should really consider bumping up your insurance and adding an umbrella policy.

      I work around the corner from an exotic car dealer, and a few months back I found myself behind a $1.5 million Bugatti Veyron. One slip of the foot and everything I own would be gone in a poof of carbon fiber dust.

      I just got a quote for $1mil coverage(about $220/year on top of my normal premiums), bringing my auto coverage to $1.25 mil. Su

      • No kidding. Years ago, in Menlo Park, I saw the result of a parking lot accident where a teenage driver backing up a large Mercedes sedan (with mom in the passenger seat) stepped on the wrong pedal and smashed a Sentra and a Jaguar. Not a lot of happy faces there.

        Sometimes it makes more sense to just avoid the hazard. There was a large tree in our back yard that was distinctly tilted towards a neighbor's house, and it was starting to look less healthy. We spent almost 11 years of your insurance incremen

    • Tesla sued Fisker in 2008, for a car design: http://green.autoblog.com/2008/04/15/breaking-tesla-sues-fisker-over-electric-car-design/ [autoblog.com]

      Tesla sued TopGear in 2011, for a car review: http://www.iol.co.za/motoring/industry-news/tesla-losing-top-gear-court-challenge-1.1162112 [iol.co.za] "Tesla losing Top Gear court challenge"

      See the spectacular Jeremy Clarkson review the Tesla in 2008 and compare it with its car design origin (Lotus Elise) http://www.spike.com/video-clips/c3neux/top-gear-reviews-the-tesla-roadster [spike.com]

      Tesla sue

  • by Amigan ( 25469 ) on Friday October 21, 2011 @12:22PM (#37795050) Homepage
    So for $89K you get an electric vehicle that doesn't go as far as the Chevy Volt (which costs $40K)? As a hybrid, it gets the equivalent of 20MPG? I thought the goal of the electric car was to do better than the gasoline powered vehicles. Tesla at least is all electric and has that wow factor. What was the business model that allowed the US Government to invest $500+M??
    • by Attila Dimedici ( 1036002 ) on Friday October 21, 2011 @12:29PM (#37795188)

      What was the business model that allowed the US Government to invest $500+M??

      That's easy. The primary investors in this company donate copiously to the campaign coffers of Democratic Party politicians.

    • Of course we're going to pour billions into companies, having no venture capital experience, and even without a proper vetting process that will be adhered to.

      (Dis)credit to Bush for signing this into existence, but Obama's corrupt administration of course had to make it worse. His own people told him Solyndra was a bad investment, but he and Chu were chummy with the owners and it was a big political "green" score. It went through anyway even before legally mandated evaluations were finished. Any VC firm op

  • Obama is a (Score:3, Insightful)

    by Spy Handler ( 822350 ) on Friday October 21, 2011 @12:23PM (#37795088) Homepage Journal
    proponent of the power of state, and believes that more of it, the better. He is a proponent of command economy, as evidenced by his goverment allocating economic resources according to ideology, rather than market realities.

    How else to explain giving government money to these firms?
  • Being a "fabless automaker" doesn't work all that well. You can get exotics made that way, but it's too expensive for a production product.

    Tesla's great achievement was that they finally made a usable, fun to drive electric car. It's overpriced, but it does work. I see them on the road all the time in Silicon Valley. I hope Tesla can actually get their sedan product to profitability. Tesla was lucky to pick up the NUMMI plant cheaply; they got a modern small car auto assembly plant in good condition,

  • Are you really surprised by any of these payouts to completely uneconomic green (as in money) projects by BHO? Do you notice the pattern of $500 million loans? There seem to be BHO Big Bundlers involved in each of them. A Big Bundler is someone who gathered together at least $500,000 for the Obama campaign. Pretty good ROI here: Invest $500,000 and get back $500,000,000.00. We are being robbed by these Progressives on a grand scale never before seen in this country -- and there are still people who just can
    • And to add insult, their first Fisker $97K car only gets the equivalent of 19MPG -- the same as the average SUV. Damn, I'm mad.

      You need to compare it to the Lambos, Ferraris, etc. in it's market segment. See how economical they are...

  • I see:
    - limited range
    - low fuel economy
    - high price
    - See http://mindset.ch/de/?page_id=75 [mindset.ch] for an alternative
  • by roc97007 ( 608802 ) on Friday October 21, 2011 @12:33PM (#37795270) Journal

    I can't really tell from the wording... was "PR Success" meant as irony?

    These specs seem to be really poor -- $100K price tag, only slightly less than the high-end Tesla sports car, 32 mile electric range, which the Roberts Electric Car built in 1896 beats by 20%, and 20 MPG on gasoline, which my F150 truck beats by 13% on the freeway. Do the people of Finland really have such low standards?

    All this for $592M in US tax money for a product that doesn't create a single US job. This is a success that makes up for the failure of Solyndra?

    And now we're calling the Solyndra bankruptcy, with it's loss of more than a half billion dollars of taxpayer money, a PR failure??

    Seriously?

    • by roc97007 ( 608802 ) on Friday October 21, 2011 @12:35PM (#37795304) Journal

      I really have a bad feeling about this. It's like people are using environmental issues to launder massive amounts of cash.

    • All this for $592M in US tax money for a product that doesn't create a single US job.

      You're wrong. [energy.gov]
      The loan is for a different car (Nina) that the company will be manufacturing in Delaware.
      Though their manufacturing date has slipped from 2012 to 2013.
      In 2016 they'll be moving production of the Karma (now made in Finalnd) to Delaware.

      Further, we're talking about a loan, not a grant.
      So unless Fisker goes bankrupt, the US won't have really lost anything.

      Technically there is an opportunity cost, but the government isn't really limited by that,
      as part of what the government does is fund projects

  • You can run over someone's Dogma with your Karma.

  • by Doc Ruby ( 173196 ) on Friday October 21, 2011 @12:42PM (#37795420) Homepage Journal

    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.

    • When fuel prices hit $4/gal (US), Gas Hybrids were flying out of the dealerships. 10 year old used Honda Insights were selling for what they cost new. You couldn't give away an SUV. No government interference needed.

      That's capitalism.

      Peak oil has already hit, right? The market will take care of this with no need for tax payer subsidy.
  • One loan at a time!

  • by sp3d2orbit ( 81173 ) on Friday October 21, 2011 @12:57PM (#37795658)

    After Solyndra there will be more failed green energy companies backed by socialist spending. One of my client's, a silicon crystal grower, is busy buying up equipment from green energy companies as they liquidate and pay back the original investors using taxpayer money.

    Unpopular as it may be with the Slashdot crowd, the government is not smart enough to pick winners. The government should not be in this business. Taking tax money to invest in initiatives like this is at best foolish and at worst theft.

    This was $529 million dollars taken from Americans and given to Obama's cronies. Where did that money come from?

    Top 10% of earners: ~$365 million dollars
    Top 50% of earners: ~$520 million dollars

    If that money had not been taxed and wasted it would have been wasted mostly by those in the upper middle class and the rich. It would have gone to support private schools, yoga teachers, golf courses, 5 star restaurants, designer stores, etc. Each of those business provides jobs and incomes for the service industry: the bottom 50% of earners.

    If you want to create more jobs in America then stop taxing Americans.

  • Comment removed based on user account deletion
  • A government should not be investing in commercializing technologies, that's what businesses are for. Gov't should only fund research to develop technologies to the point that they appear to be viable for commercialization, then let private investors take the risks of actually producing and commercializing the product. We're investing in the wrong things. In some cases, a gov't may invest it or subsidize the development of infrastructure (e.g. roads, communication lines, power lines, railroads, water supply

  • by cmholm ( 69081 ) <cmholm@mau i h o l m.org> on Friday October 21, 2011 @03:35PM (#37798336) Homepage Journal

    It's not uncommon for /. editors to add a story update when significant new information comes to light, or there was a major f-up in the original. This is one of those times, Soulskill. I know a lot of stuff rotates through your in-box, and you got suckered by @theodp. You need post the correction:

    - Fisker Karma, made in Finland, no DOE loan.
    - Fisker Nina, to be made in Delaware, with DOE loan.

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