U.S. Senators Demand Justification Behind Fisker Federal Loan

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It hasn't exactly been smooth sailing for Fisker, as the automaker has experienced a number of production delays. Now, two U.S. senators are demanding answers from the Department of Energy, asking why the $529 million loan was approved in the first place.

Republican Senators Charles Grassley and John Thune have challenged Energy Secretary Steven Chu to defend the now-frozen loan, asking what technical expertise the department used to approve the Fisker loan, reports Reuters. Though Fisker was approved for the $529 million loan in 2009, it received only a third to help with production of the Fisker Karma plug-in hybrid sedan. After several production delays, the DOE decided to hold additional financing.

"Though the Department of Energy has now frozen the remaining portion of Fisker's loan, questions remain as to why a loan was extended to this now 'troubled' auto company in the first place," said the two lawmakers in a letter.

In response, agency spokesman Damien LaVera said startup delays are rather common, and added the DOE is working closely with Fisker on developing a new business plan to determine "the best path forward so the company can meet its benchmarks, produce cars, and employ workers." The DOE has also hired an outside consultant to evaluate agency loans, including Fisker's.

Despite the frozen loan, which includes $50,000 that was supposed to go toward development of the Atlantic, Fisker claims it has not relied on federal Department of Energy loans since March, raising $132 million in private funding for production of the Atlantic.

Source: Reuters

 

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