Stricter Loan Policies Spurred by Fisker Fiasco
Fisker is all but wiped from the automotive landscape, and more information about the Energy Departments loan criteria is surfacing in the wake of the failure.
In total, the Obama administration’s program awarded $8.4 billion to five firms and said last month that it doesn’t plan to dispense further funds despite the remaining $16.6 billion.
Fisker was originally meant to receive $529 million in federal loans under the Advanced Technology Vehicle Vehicle Manufacturing (ATVM) program. After the maker failed to meet targets, the Energy Department froze Fisker’s loan with only $192 million released. Last week, the government seized $21 million from the company.
According to The Detroit News emails confirmed that after Fisker and Tesla received funds, the loan standards were tightened.
“The credit standards have indeed become a bit more stringent since the Tesla and Fisker deals went through,” an email from Energy Department consultant Sandra Claghorn said in March, 2010.
Another email sent three months later carries the same message.
“We are trying to do a much better job of spotting and understanding (applicants) earlier rather than later,” James C. McCrea, an Energy Department consultant, wrote in July 2010 to another consultant. “This is incredibly important, and especially with ATVM as they have not been through the approval process since Fisker and Tesla have no real sense of how much tougher things are.”
The emails offer the beginning of an explanation to why many companies waited years for loans before giving up.
[Source: T he Detroit News]
Luke is an energetic automotive journalist who spends his time covering industry news and crawling the internet for the latest breaking story. When he isn't in the office, Luke can be found obsessively browsing used car listings, drinking scotch at his favorite bar and dreaming of what to drive next, though the list grows a lot faster than his bank account. He's always on <A title="@lukevandezande on Twitter" href="http://twitter.com/lukevandezande">Twitter</A> looking for a good car conversation. Find Luke on <A title="@lukevandezande on Twitter" href="http://twitter.com/lukevandezande">Twitter</A> and <A title="Luke on Google+" href="http://plus.google.com/112531385961538774338?rel=author">Google+</A>.
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