Detroit — Fisker Automotive? Call it Obama Automotive.
As part of Washington’s effort to remake the U.S. auto industry to fit President Obama’s green vision of 1 million electric cars sold by 2015, Vice President Joe Biden announced Tuesday that luxury electric carmaker Fisker would invest $193 million in taxpayer money to buy an ex-Pontiac plant in Wilmington, Delaware. “I refuse to believe that we will not once again lead the entire world in the manufacturing of automobiles,” Biden told a friendly UAW crowd. “This factory in Delaware, and the industry, are going to get back up off the mat.”
With its pork barrel politics, union favoritism, and massive taxpayer subsidy, the Delaware plant is a case study in Washington industrial-policy boondoggles.
Toys for the rich: Democrats love to huff and puff about expensive weapons systems — but at least those are built for the common defense. Fisker makes cars for well-to-do American greens. The luxury sedan slated to be built at the Delaware facility will sticker for $47,400 (Fisker’s press release spun the price as “around $39,900 after federal tax credits.” That credit represents a $7,500 taxpayer subsidy per car) — meaning that it will compete against the BMW 3-series and Mercedes C-Class luxury cars.
Political connections: Notably, Fisker has never manufactured an automobile before. Its first car, the $87,000 Fisker Karma, is not due to roll off its Finnish assembly line until next year. So how does an automaker that hasn’t made an auto land a half-billion government investment? Check its rolodex. Fisker is the darling of California green politicians. Located in Silicon Valley along with its electric cousin, Tesla, Fisker has been touted by Speaker Nancy Pelosi and Senator Diane Feinstein as a California pioneer that will help the Bay area steal Detroit’s mantle as America’s car capitol. And Fisker also benefits from ties to the Goracle — his venture firm, Kleiner Perkins, is a lead Fisker investor.
Union payoff: Fisker will maintain the Delaware plant’s UAW representation — an odd decision for a startup seeking to keep costs low. But of course, this is a government startup, and the union comes with the package.
Political pork: Biden’s lead role in Fisker’s announcement is surely no accident. This is valuable pork for the Veep’s home state in the coming election year. The Delaware plant maintains union jobs — and voters — and provides Biden’s Senate replacement (his son, Beau?) with a handy campaign promise of green jobs.
Washington in charge: As the majority stakeholder in General Motors, Washington (via its GM CEO puppet) had allegedly targeted the Delaware pant for closure. In fact, it is merely transferring it to another government-financed entity, Fisker, who will operate the plant with a portion of its $529 million in taxpayer loans.
The Obama administration’s 21st century vision of a government-led American auto industry is a striking contrast to the private companies that vaulted Detroit to U.S. dominance in the early 20th century.
“This is proof positive that our efforts to create new jobs, invest in a clean energy economy and reduce carbon pollution are working,” commented Energy Secretary Steven Chu about the Delaware plant. “We are putting Americans back to work and reigniting a new Industrial Revolution that is paramount for the economic success of this country.”
Welcome to the Era of Big Government Motors.