Senators raise alarm over another possible sale of taxpayer-backed firm to Chinese
February 21, 2013 Leave a comment
Republican senators complained Wednesday that U.S. taxpayer dollars could end up boosting the Chinese economy, following reports that a Chinese firm is leading the pack of companies bidding for a majority stake in government-backed Fisker Automotive.
The troubled California-based electric car maker, which was backed by U.S. taxpayers to the tune of nearly $530 million, for months has been looking for a financial partner. Reuters reported earlier this week that China’s Zhejiang Geely Holding Group is favored to take over, though Fisker is also reportedly weighing a bid from another Chinese auto maker.
The development comes after Fisker’s main battery supplier — U.S. government-backed A123 Systems — was recently purchased by a separate Chinese firm.
Sens. John Thune, R-S.D., and Chuck Grassley, R-Iowa, voiced concern Wednesday that Chinese companies are benefiting from U.S. taxpayers’ investment.
“Obama’s green energy investments appear to be nothing more than venture capital for eventual Chinese acquisitions,” Thune said in a statement. “After stimulus-funded A123 was just acquired by a Chinese-based company, it’s troubling to see that yet another struggling taxpayer-backed company might be purchased under duress by a Chinese company.”
Grassley added: “Like A123, this looks like another example of taxpayer dollars going to a failed experiment. Technology developed with American taxpayer subsidies should not be sold off to China.”
Despite the Reuters report, Fisker stressed that the bidding process is still very much open.
“The company has received detailed proposals from multiple parties in different continents which are now being evaluated by the company and its advisors,” Fisker spokesman Roger Ormisher said in a statement.
The Obama administration also defended the Energy Department’s overall loan program, which originally extended the nearly $530 million loan to Fisker in 2010.
“The department’s loan program invests in advanced hybrid electric vehicles because they have the potential to significantly improve performance and fuel economy for American consumers. Every one of these loans has strict conditions in place to protect taxpayers,” department spokesman Bill Gibbons said. “The department is working with Fisker to determine the best path forward so the company can meet its benchmarks, produce cars and employ workers here in America.”
Fisker has tapped about $200 million of its U.S. government loan to date, while raising roughly $1 billion from the private sector.
The company has run into daunting financial problems since the original loan. Last year, the Energy Department stopped disbursements on the loan because the company purportedly failed to meet production and sales goals on its electric plug-in sedan, the Karma.
The lack of funds was followed by the company halting operations at a Delaware facility, a formerly abandoned General Motors plant.
According to local news reports, the state of Delaware continues to pay utility bills for that facility while waiting for Fisker to resolve its financial situation.
Fisker took another hit when A123 Systems filed for bankruptcy.
Reuters reported that, according to one unnamed source, Fisker is looking to strike a deal for majority ownership by mid-March.
FoxNews.com’s Judson Berger and Fox News’ Mike Emanuel contributed to this report.
Read more: http://www.foxnews.com/politics/2013/02/21/senators-raise-alarm-over-another-possible-sale-taxpayer-backed-firm-to-chinese
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