Payday Loans

Showing that they care much more about ratings and sensationalism that about actual facts, Fox “News” came out strongly criticizing the recent Department of Energy (DOE) loans to Fisker and Tesla.  Fisker was awarded $528 million and Tesla $465 million.  It is difficult to enumerate all of the false and misleading statements in the following video clips, but here is a sampling of the junk that they try to pass off as news:

  • Many times, the loans are derided as a handout to “foreign” companies “creating jobs in Finland” and “going to build a car in Finland for $89,000”.  In fact, both companies are American, based in California.  The confusion on the part of Fox and its guests is from the fact that presently, Tesla only produces one model, which is made in Great Britain. Fisker doesn’t produce anything yet, but its first model, the Karma, will be assembled in Finland. However, the loans are for the development and eventual manufacture of lower-priced models from both companies that will be made in the US.
  • Stating and strongly implying that the only reason that Fisker received the loan is because Al Gore is involved and was pulling the strings behind the scenes.  In fact, Al Gore is a partner in Kleiner Perkins Caufield & Byers, a major investor in Fisker.  However, another partner is Colin Powell, who once considered running for president as a Republican.  Fox offers no evidence of tampering by Gore or KPCB.  It just throws out the implication.
  • They have David Williams of “Citizens Against Government Waste” to discuss.  He rails against the loans as wasteful.  Fine.  Disagree with the program if you want, but Fox also asks him about the cars and whether they are worthy of the loans.  This guy doesn’t know any more that the hosts when he says the money will not help the average American.  See first point.
  • At the end of the first segment, almost as an after thought, the host mentions that Fisker says the money will be used to fund another model, but it isn’t even designed yet.  Great job on doing your homework.  Even for the best car companies, it takes years and millions (sometimes billions) of dollars to design and develop a vehicle to sell.  Fisker (and Tesla) are going to use these low interest loans to fund that very development, so of course the new vehicles aren’t developed yet.
  • The 2nd segment includes a writer from the Wall Street Journal, who is no better.  Several times, he refers to Fisker as a “Finland company” and Tesla as a “British company”.  Then he says 3-4 times, “I don’t agree with this type of government largess, but if you’re going to do this, at least give the money to an American company.”  I almost expect this type of bluster from Fox, but not the Wall Street Journal.  They are supposed to at least be knowledgeable about business.  If they’re not, what value are they to anybody?  He even tries to equate this to the US contracting out the moon program of the 1960s to the Russians.  Unbelievable.
  • They conveniently leave out the fact that 1 truly foreign company has already received over $1 billion in DOE loans – Nissan.  Ford and Nissan received funds in the first installment of the DOE program earlier this year.  As a US taxpayer, I would much rather my tax $ go to Fisker and Tesla than Nissan.  Nissan’s profits and intellectual property are in Japan, where the good jobs truly are located.

By the way, Fisker has issued a press release disputing the reports about the loan and about the company. Tesla has also attempted to calm the storm and get the facts out.  You can read the Fisker release here, and the Tesla release here.

That’s what I think – how about you?  Please leave your comments below.

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1 Comment »

  1. This is the pinnacle of irresponsible reporting!! I won’t single FOX out since I think most networks these days are pushing an agenda..but Wow..I don’t even know where to start with the misinformation and cherry picked facts. Good summary in the article above.

    Bottom line is that there isn’t a manufacturing company in the US these days that isn’t outsourcing some part of their production to another part of the world. And this is a LOAN..from a program specifically set up to advance fuel efficient vehicles (not create jobs)..they have to pay it back with interest. It’s great that they are creating jobs both in the US and elsewhere..but this wasn’t a criteria for the loan. Most of Detroit was just handed a bail out for decades of irresponsible business practice. This is really want should be outraging tax payers!

    Additional they kept showing the new Tesla Model S while quoting the $109,000 Roadster price tag. These are different cars. The Model S is still expensive at $50k..but the price is dropping fast and the 3rd gen car is expected be in the $30k range.

    I think Tesla and Fisker have shown very innovative business models. They are getting customers/”investors” with the interest and money to do so, to take a bit of risk and fund the next development cycle. The longer you can wait for this..the better and cheaper the product will be. This is the future and as time has shown us, new technologies start costly and come rapidly down in price. Thankfully, there are people/early adopters that are willing to take a chance and pay the price so that these things become available to everyone.

    Comment by dave6220 — 7 October 2009 @ 1:25 pm

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