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Bob Lutz asks, “Should the US Bail Out Fisker Automotive?”

US Department of Energy seal 300x300 Bob Lutz asks, “Should the US Bail Out Fisker Automotive?”

Should The DoE Bail Out Fisker Automotive?

There are plenty of moves by the US government that have controversial, bailing out General Motors and Chrysler [and other companies] is one of them. Should Fisker Automotive have this same consideration?

Large automobile manufacturers like General Motors and Chrysler were hanging on by a thread. In order to stabilize them, maintain production, and save jobs, the US government stepped in with loan money. This decision is still hotly contested five years later, especially as other automotive companies still find it difficult to deal with the [slowly improving] economy.

Fisker Automotive is one such example, and hasn’t made a single vehicle in almost a year. One problem after another has struck the company, including bad press, the falling price of gasoline, and millions of dollars in uninsured losses due to Hurricane Sandy. Battery supplier A123 Systems is dead and bought out by a Chinese company [another hotly contested Department of Energy loan gone bad]. Now Fisker Automotive is facing bankruptcy and founder Henrik Fisker has jumped ship as well.

The US government hasn’t stepped in with any automakers or suppliers of late, but should they make an exception in the case of Fisker Automotive? Fisker really could benefit from such an action, and could do so easily if they do a little reorganization. Their current business model is based on 20,000 vehicles per year, but with sales topping just 2,500 since 2008 and an ebbing desire for hybrid electric vehicles, Fisker Automotive has no way to profit!

On the other hand, if Bob Lutz is right, a government bailout could keep the company in the black long enough to get back on its own two feet. “…without a radical re-sizing of the company, closing of the California headquarters and an employee base just big enough to support the Karma (we’ll worry about the smaller Atlantic when they have some money), I don’t see any change in their future. The big Wilmington Assembly plant, sized for 300,000 cars per year, and which sank the Pontiac Solstice due to its high cost of operation, has to go. So does production of the Karma in Finland, which eats up about $10,000 per unit in transportation costs alone.”

“I want Fisker to live and succeed,” Bob Lutz on Forbes

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About the author

Ben has been a Master Automobile Technician for over ten years, certified by ASE, Toyota, and Lexus. He specialized in electronic systems and hybrid technology. Branching out now, as a Professional Freelance Writer, he specializes in research and writing about his main area of interest, Automotive Technology, Alternative Fuels, and Concept Vehicles.