fisker karma

What happens if you can't find an actual scandal? Make one up. The Fisker "scandal" that started at ABC News has jumped to Fox and right wing blogs, where the idea that the U.S. bumbled into paying for cars built overseas is gaining steam.

ABC's report incorrectly stated that Fisker had made off with U.S. taxpayer funds in a kind of bait and switch, promising jobs in America then outsourcing to Finland. Since that report rolled out last week, Fox has jumped on the issue with a story headlined "Federal Loan... for Finland?" Fox's Neil Cavuto jumped in to add that, two years after the payments to Fisker, "those jobs still are not here, they're in Finland." Attempts to turn the Fisker loan (not a grant) into a scandal have become entangled in Republican primary politics, with candidate Mitt Romney calling for an investigation and claiming that loans to both Fisker and Tesla were payback for political donations.

All of which conveniently ignores some important facts. Yes, Fisker's first model, the Karma plug-in hybrid sports car, is currently being assembled in Finland. However, the first $169 million in loans provided to Fisker were not for the assembly of the Karma. The loans went toward the design and engineering of the car, activities that took place at Fisker's Pontiac, MI headquarters.

The bulk of the loan for Fisker was provided not for the Karma, but to support the upcoming Nina model, which will be built at the company's new factory in Delaware starting in 2013. There are already 100 plant workers in Delaware employed by Fisker in preparation for the Nina and millions have been invested in preparing the Delaware assembly lines.

Two years after the initial loan to Fisker, there are certainly jobs in the U.S. that are directly attributable to the first part of the loan, and more coming when the Nina enters production. Far from being caught by surprise, the government was fully aware that Fisker intended to assemble the cars in Finland (and said so in press releases at the time). Both Fisker and the government worked to see that U.S. dollars stayed in the U.S. Fisker has stated that "not a single dollar" of the money it received from the government has been spent overseas. This hasn't stopped the media attacks, but Fisker if fighting back.

Officials and investors at Fisker have issued statements calling the ABC story inaccurate, stating that "Only private equity financing, of which we have raised over $600-million so far, has been used for costs not covered by the Department of Energy loans, of which only a small part is production costs in Finland... [The federal funds were] used soley in the U.S. to fund design, engineering and integration work." Meanwhile, Fisker workers are fighting back against the attacks by posting to Facebook. This tempest in a teacup doesn't look like it's going to cool down any time soon.