It looks like Americans are not quite ready for $100,000 electric cars…
http://news.yahoo.com/energy-dept-seizes-21m-electric-car-maker-225843009--politics.html
I’m sorry but I just can’t seem to keep quiet. Bruce Williams used to say “Work with the masses, live with the classes, but work with the classes, live with the masses.” In other words, as Henry Ford found out, you can sell a heck of a lot of cars for $700 and make a lot of money, but not so many cars for $100K and not make much money.
I think if the feds have millions to invest, they should just buy good mutual funds and leave the investing to professionals instead. I hope that wasn’t my check they threw away.
It was everybody’s checks. And the Feds failed to stop the funding even when Fisker was in default. What a disaster.
A blind man could have seen this coming; and Fisker is not the only one looting the bank.
The tests I’ve read really dissed the car on so many levels, regardless of it being electric. I agree, even if it had the best power plant in the world, it was like Ben and Gerry’s designed it.
Cars are disposable tools. People buy cars they don’t even fully like. I don’t love my car. It is functional and affordable. Buying a 100k car to “save” gas or because it’s green is silly. If we all buy more, the price will drop? Yah.
Okay, it’s time for a reality check, folks.
During the recent presidential campaign, Mitt Romney stated that the federal government had
"a failure rate of 50%" with the companies that it backed with gov’t financing. That would surely be a terrible rate of failure–IF it was true.
The reality is that the federal gov’t–under the present administration–has a failure rate of 11% with the companies that it has chosen to help finance. While this is not an enviable record, it is very far from some of the worst records.
Who had a worse record?
None other than that wonderful “business genius”, Mitt Romney.
When he made the decisions at Bain Capital, the failure rate was actually about 4 times higher than the federal government’s failure rate.
Out of 77 companies in which Bain Capital invested other people’s money during Mutt’s tenure, 33 of those companies either failed or produced no earnings over a period of several years. That, my friends, is a 43% failure rate.
What a business genius!
Who’s reality are you checking? Who brought up Romney?
But there is a big difference between Bain and the Feds, don’t you think? The Feds are using OUR money.
Bain was using other people’s money also, if you think about it.
I brought up Romney because many people believed the fable (relating to this topic) that he spouted in one of the debates.
But, my basic point–which I did not express very well–is that we often hear the mantra, “If only the government was run like a business…”. Unfortunately, that philosophy ignores the reality of many poorly-run businesses.
Whether the government “invests” in businesses by giving them loans, or by giving them tax breaks, the government is giving money to those businesses. Some of those decisions are good ones, and some turn out to be bad ones, but the government’s record is nowhere near as bad as some people would have you believe, and–in fact–is better than that of many businesses.
Bain Capital’s stated business plan is to invest in early-stage companies, which will ALWAYS have a fairly high failure rate.
I think the government has a place in fostering basic research, and (reluctantly on my part) helping major US industry survive when absolutely necessary. But funding startup companies with bad business plans, like Fisker? Nope.
IMHO the question needs to be asked whether investing in private companies is a legitimate use of tax dollars. Is that the reason we pay taxes?
Entrepeneurs used to develop a business case, initiate the company using private funds, venture capital, or business loans, and build from there. The founder took the risks (and trust me, no bank is going to capitalize a new venture unless the business case is sound and the founder has put his own heiney on the limb) and, if the business was successful, reaped the rewards. That process worked. That provides capitalization for new businesses on a risk/rewards basis. Our tax dollars have no business interfering with that process in order to promote political agendas. And these people have the audacity to pretend they’re “representing” us?
I regret Fiskar going under. But I regret even more the use of our tax dollars to support private enterprises.
The problem I see with Fisker is that they were treating their auto like some new electronic device. HTDV’s were EXTREMELY expensive at first. But companies went ahead and built them anyways. Some lost a lot of money doing so. But manufacturing changed…prices dropped and dropped until the products became cheaper and now it’s a multi-billion dollar/year business. I don’t think you can apply the same business model to an electric car. But they gambled and lost. I do thin electric cars will someday be as popular as a ICE car is today. But it probably won’t be in my lifetime and maybe not even my kids.
Bain Capital's stated business plan is to invest in early-stage companies, which will ALWAYS have a fairly high failure rate
Venture capitalists are always looking to invest in companies that they can get a 30-40% return on their money in just a couple of years. The bad part of venture capitalists in the high-tech world is many will only invest in companies who are willing to cut costs. As part of their deal to loan them money they want to see the short and long term plans on moving engineering and manufacturing off-shore. Good or Bad it’s done a lot. I personally know at least 2 people who lost their jobs that way. Some of these venture capitalists now investing in the US are from India and China. They will invest in a promising company and then move the technology over to their country…leaving the sales and headquarters in the US.
There’s a huge difference between Bain Capital and the government.
With the former you have investors making a free will choice to invest their money to varying degrees of risk. Some win and some lose; depending upon their tolerance for risk.
With the latter, the investment is being done with increased taxes and borrowed money. The investor in this case (a.k.a. the taxpayer) has no choice in the matter and the IRS guarantees that the investor will pay one way or the other with the debt also being paid by the ancestors of the taxpayer.
Fisker is just another Tesla, Solyndra, Venture Vehicles, etc, etc. in spite of some claims, GM is not a success story.
Just watched the film looper. Cars in the future had solar panels? Paid with tax credits? Solar panels and ethanol. Interesting industries.
“Paid with tax credits?”
Now there’s a great phrase!
“Paid with tax credits”?
You guys are giving me the willies!
If I were deeply in debt, would it be wise for me to borrow more money to invest in start-up companies? Or should I concentrate on paying my debts down and building an investment fund? Regardless of the failure rate, I just think now is the time to pull back a little, squeeze the nickel a little more, and forget out investing in PC industries just to make a certain segment of the population happy. How many air traffic controllers could we pay with that same money is all I’m saying.
Bing, it would be a great idea to borrow more money to invest in start up companies if you were using MY money to pay it back…and could force me to give you more if you need it!
Just think of how many entrepeneur buddies you’d have if, say, you decided to run for office and needed some votes!
Every car maker from A to Z cashes in on the taxpayers no matter if it’s at the Federal, State, or local level; or all three.
Even before the latest Federal bailout of GM, they were getting bailed out here in Oklahoma. The politicians gave them everything in the world to locate a plant here 30ish years ago and which closed back in about 2006.
What to do with the empty building? The voters approved in the name of “job creation” as per the county commissioners a bond issue raising property taxes which then led to the county buying the building and leasing it to the Air Force. The AF spent 80 something million renovating it and who knows what the operational costs are each year.
The county, through future property taxes, paid 55 million for that building with the “state” chipping in 6 million. So how much does the county lease it out for each year? One dollar per… 