Angela Greiling Keane at Bloomberg writes an article about the numbers behind an automaker that the government has given millions of taxpayer dollars:
Fisker Automotive Inc. spent more than six times as much U.S. taxpayer and investor money to produce each luxury plug-in car it sold than the company received from customers, according to a research report.
The Anaheim, California-based company made about 2,500 of its $103,000 Karmas before halting production last year, disrupting its plans to use a $529 million U.S. loan to restart a shuttered Delaware factory owned by the predecessor of General Motors Co. (GM) The Karma was assembled in Finland.
Mark Modica at the NLPC blog writes about the government’s investment in new technologies that may end up being a huge waste of money:
The worst part of this mostly-untold story is the taxpayer money that continues to be wasted on the green pipe dream. The American people were lied to about the potential for the Chevy Volt, as well as for the technology behind it. Billions of dollars were spent on grants and failed loans for production of plug-in EVs, lithium-ion batteries and charging stations. Wealthy purchasers of $40,000 Chevy Volts and $100,000 Teslas receive federal tax credits for $7,500 each. Subsidized battery makers like A123 Systems are bankrupt and government-supported, green automaker Fisker is not far from it. How are middle-class or poor Americans benefiting from any of this?
A WSJ column by Kimberley A. Strassel delves into the cronyism involved in the government loan process for automakers, showing an example of a company that was almost given loans despite clear signs they were not qualified:
For an excellent study in how green-energy cronyism works, look instead to the near miss (for taxpayers) of Next AutoWorks. That startup applied for a $320 million federal loan guarantee in 2009, promising a Louisiana factory that would produce cheap and fuel-efficient cars. Next didn’t, ultimately, get its loans.
It wasn’t from a lack of political lobbying. Emails referenced in a House Oversight subcommittee hearing this week confirm every suspicion about the degree to which powerful moneymen worked the system on behalf of their investments, pushing their political contacts to roll over Energy’s credit department.
Ed Krayewski at Reason’s Hit & Run blog writes about a case of cronyism in the auto dealer industry:
Ever since Tesla announced its plans to sell cars directly, with factory-owned Tesla Stores and Tesla Galleries acting only as display showroms, car dealers and their associations have denounced the plan.
They’ve also sued Tesla for violating franchise laws in several states–Massachusetts, most notably–and gotten laws changed in others to make Tesla’s model flatly illegal…
Mark Modica from the National Legal and Policy Center has written the following article, concerning vehicle subsidies. If policymakers are really worried about our current debt situation and our level of federal spending, then they should be putting a halt to federal Electric Vehicle subsidies that will cost the taxpayers $7.5 billion in the next few years.
The Congressional Budget Office recently reported that federal EV subsidies will cost taxpayers about $7.5 billion over the next few years. The majority of those buying costly “green” vehicles, like General Motors’ Chevy Volt, are making far more money than the average American. Why should those that can afford to buy these green toys get reimbursed $7,500 each as the nation is going broke?
[…] most of the ideological and rich folks who buy a $40,000 Volt, much less a $100,000 Tesla or Fisker, would have bought the car even without the subsidies. Isn’t it time to transition the wasteful green initiatives that beget failing ventures like Solyndra from a costly government sponsored quest to a privately-funded industry that will be based on free-market logic? While we’re at it, subsidies for oil companies can be put on the chopping block as well.
Jeff Wattrick at Deadline Detroit writes about regulations protecting car dealers and separating consumers from car manufacturers.
Members of the Detroit Auto Dealers Association, which organizes and hosts the auto show, like auto dealers across the country, are protected by a myriad of regulations that both consumer advocates and free-market economists claim stifle competition and limit consumer choice. Laws in Michigan and most other states prevent automakers from selling their product online or in corporate dealerships.
Matt Mitchell at the Mercatus Center writes an article about the bailout of GM and the cost to taxpayers:
Marketplace recently did a segment on the federal government’s announcement that it was getting out of the car business and would be selling off its stake in GM over the next two years. Marketplace reporter Nancy Marshall-Genzer first turned to Cato’s Dan Ikenson who noted that taxpayers would likely “need to assume a loss of $15 to $20 billion.”
Craig Eyermann at MyGovCost writes about the recent sale of GM stock by the U.S. Treasury:
The U.S. Treasury just concluded the sale of 200 million shares of GM stock back to the company for $27.50 per share. The federal government had acquired the stock for roughly $54 per share back in 2009 when it intervened in GM’s impending bankruptcy. The federal government then has just lost 5.3 billion dollars on just that portion of its “investment”.
Mark Modica at the National Legal and Policy Center writes an article about the Canadian government’s stake in General Motors, and what the proper role of governments are when dealing with private businesses:
Whether you think the auto bailouts were conducted in the most ethical matter or not, it is hard to argue for the continued involvement of governments in the sector. Leaders in both the US and Canada should be asked why they are so certain that GM share price has no downside and is without risk if they continue to display the reluctance to exit their stakes and a close eye should be kept on the financial figures coming out of GM for possible fudging (like stuffing truck inventory channels or getting help from government-owned Ally Financial) as the company continues to have powerful political motivations.