In a nutshell, Republican presidential candidate Mit Romney has received a serious campaign lashing over his corporate, American-job-outsourcing past, and his response to that is to take the Obama administration to task over electric cars.
The two issues are only very loosely related in terms of jobs, but in a campaign season one is forced to examine unrelated issues as they are unnaturally enjoined through over-the-top television ads.
So, let’s start with electric cars, which the Romney camp is targeting over two start-up loans from the Energy Department, one for Fisker Automotive Inc for $529 million, and the other for Tesla Motors Inc for $465 million.
Certainly, the fact that Fisker is forced to delay production (and, hence, new jobs) of its next-generation electric sedan, which was supposed to begin this summer, is very unfortunate for the Obama administration so close to elections.
In order to lend the electric car industry the proper perspective, however, we need to step outside the campaign rhetoric. So, for anyone not enthralled by the televised campaign ads, here is a sober look at the industry.
California-based Fisker has used $193 million of those funds to develop its first electric vehicle, the Karma. The funds were used on development in the US, and while the first car was actually assembled in Finland, the loan was not used to finance that part of the operation. The electric cars are not “from Finland”, as the Romney ad purports.
The rest of the loan has been frozen as Fisker rethinks its strategy and delays production for its next-generation family sedan, which was to be produced in Delaware where it would create some 2,000 factory jobs.
The company has suffered a number of losses primarily due to a manufacturing mistake in its outsourced plug-in hybrid battery, so the “Fisker Atlantic” project is on hold temporarily. Production, originally scheduled to begin this summer, will be delayed, and Fisker has said it would not make a new decision on a production venue until the end of the summer. Chances are, the Fisker Atlantic will not come off the line by the end of the year, as planned. Furthermore, not only are the 2,000 factory jobs postponed, but Fisker has had to lay off 71 of its workers.
The Karma hasn’t exactly shot off the starting blocks, having to recall its first round of vehicles late last year over a coolant leak problem.
“As Fisker works through those issues and incorporates lessons learned from the production of the Karma, the department is working with Fisker to review a revised business plan and determine the best path forward so the company can meet its benchmarks, produce cars and employ workers here in America,” according to Energy Department spokesman Damien LaVera, cited in the Detroit News.
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