Fisker Automotive: A Green Manufacturing Example Not to Follow
Let’s be clear: We’re all for green manufacturing. All for it. But consider the sordid tale of Fisker Automotive, which has been demonstrating the wrong way to build a green product but the right way to generate a lot of bad publicity.
As part of a ballyhooed initiative of the Obama administration to promote green manufacturing, assist development of electric cars and to “put Americans back to work,” Fisker Automotive got a $529 million “loan” guarantee from the U.S. Department of Energy to build a car that would sell for about $90,000.
At the time, as reported by the Wall Street Journal, the car was said to be powered by a lithium-ion battery, be able to run solely on electric power for 50 miles and achieve an average fuel economy of 100 miles per gallon over the span of a year.
WSJ fired the opening salvo, reporting, rather dryly, in September 2009 that a “tiny” car company backed by prominent Democrat Al Gore and other Obama donors was given a huge $529 million windfall “loan” from American taxpayers, courtesy of the Obama administration, to produce a car named Karma.
The California company put on a nice show for administration officials, displaying manufacturing facilities in Irvine, Calif., and Pontiac, Mich., before securing the public funding, ostensibly on the grounds that the Karma would be produced using American labor. After the funds were awarded, the company quietly revealed that the luxury car would actually be produced in Finland.
So much for putting Americans back to work. The Finns should thank us. Now if we could just do something for Nokia.
The 2009 WSJ article quoted Matt Rogers, in charge of the DOE’s loan programs for Energy Secretary Steven Chu, as saying that Fisker was awarded the loan after a detailed technical review that concluded the company could eventually deliver a highly fuel-efficient hybrid car to a mass audience. Fisker said most of its DOE loan would be used to finance U.S. production of a $40,000 family sedan “that has yet to be designed.”
We’re all still waiting on that sedan.
Fisker Automotive was a rather curious project for a government ostensibly interested in helping Americans get back to work. As it turned out, according to investigative reporter Mark Silva:
Fisker’s top investors include Kleiner Perkins Caufield & Byers, a veteran Silicon Valley venture capital firm of which Gore is a partner… Employees of KPCB have donated more than $2.2 million to political campaigns, mostly for Democrats, including President Barack Obama and Hillary Clinton, according to the Center for Responsive Politics, a nonpartisan group that tracks campaign contributions.
So put together some rich investors with connections to Democrats and a green-sounding idea of producing electric cars and you get a $500 million loan backed by the American public. One could ask why Fisker Automotive didn’t start with the $40,000-family-sedan project instead of a $90,000 luxury toy, but that would probably be ungentlemanly.
But the Karma Is At Least Green, Right?
That was the question taken up by the popular blog Driver’s Seat last November.
The California Air Resources Board considers the Karma a “fairly standard smog-creator,” denting its green cachet a bit. Nevertheless, the car did receive certification from the U.S. Environmental Protection Agency and the California state regulator, which branded it as a low-emissions vehicle (LEV II), even though, according to John Swanton, air pollutions specialist at the California agency, the Dodge Avenger, Chrysler 200 and BMW 528i, among others, qualified for a lower emissions standard, called ultra-low emissions vehicle.
In other words, the Karma is not as polluting as a 1964 Ford pickup, but it’s hardly the gold standard for cleanliness.
Oh, and the Karma’s price went up to $95,000, but you get a $7,500 tax rebate from the Obama administration for buying it, on top of what you’ve already paid in large measure in taxpayer funding.
Frankly, the Fisker Automotive people seemed cavalier about the fact that the Karma underwhelms in greenness, which was supposed to be the point all along. Roger Ormisher, a Fisker Automotive spokesman, told Driver’s Seat, “The engine is a [General Motors] unit. It’s an older engine. It’s not the cleanest on the market. We knew that when we went into this.”
And the Karma will rely on that old GM engine, since it’s rated for only 32 miles per electric charge, a little over half of the 50 originally promised.
The Discovery website reported in 2011 that “in range-sustaining mode, the Karma’s 2.0-liter gasoline engine propels the car by generating electric power to run a pair of electric motors that turn the wheels. But it does so at just 20 mpg, according to EPA ratings.”
Being completely fair, Edmunds Auto Observer reported in March 2010 that Fisker Automotive did purchase a shuttered GM plant in Delaware for its Project Nina operation to finally build that elusive family sedan, which is now slated for release sometime in 2013.
Noted independent consumer testing organization Consumer Reports wanted to check out the Karma firsthand, so it arranged for a test this past March. As Reuters reported, the test mule died before making it even 200 miles.David Champion, senior director for the magazine’s automotive test center, noted that it was a bit “disconcerting” to spend that $95,000 on a car that won’t even make 200 miles under testing conditions.
At the time, Fisker Automotive representatives said there were about 400 Karmas on the road in America. They didn’t specify what sort of running condition most of those cars were known to be in.
It’s worth noting that Consumer Reports, as is its standard practice with products under review, purchased the car anonymously, at a Connecticut dealer. As Reuters reported, during a “gentle run” on the Consumer Reports track, the battery’s green warning light came on, and after the car was parked it wouldn’t restart.
Champion did report that the car looks good — “gorgeous,” in fact. So there’s that. The car’s critics have sniped that the Karma is mainly for rich liberals to park a status symbol in their driveways. If that’s your intent, well, Consumer Reports confirms that you’ll have a fine-looking vehicle in your driveway.
And, unfortunately, the economic revitalization of the ex-GM plant in Wilmington, Del., didn’t exactly go as planned, either. USA Today reported in April that Fisker Automotive laid off “another dozen workers” at the plant, which had been refitted with federal and state money.
USA Today said the only employees at the Wilmington plant were “a small maintenance team.” In the article, Jeffrey Garland, a local community affairs booster for Fisker Automotive, in describing the plant, was quoted that the plant was “absolutely empty” and that the company has “hauled away old equipment, but has not begun to install tooling needed to produce its second electric-hybrid model — the $47,000 Atlantic hybrid sedan.”
But hey, I’m sure the Atlantic will look gorgeous, too.