– $529 Million In Federal Funding And All Jobs Destroyed Or Lost (ZeroHedge, April 5, 2013):
Pop quiz:Q. What is the fiscal multiplier on $529 in government stimulus?
A. If you are Fisker Automotive, zero.
While the terminal fate of the federally-subdizied car company was no secret to anyone, there were some questions when this latest example of idiotic government “capital allocation” would get Solyndraed. The answer is now.
According to several sources, electric car maker Fisker Automotive is planning to lay off many of its employees today. Sources tell me that there is a company meeting at 8AM today where the company will announce this to the employees.
I’ve also heard that law firm Outten & Golden has been looking into initiating a class action law suit to represent Fisker’s employees should Fisker fall into bankruptcy. The firm is looking into whether Fisker (like Solyndra) will or already has violated the WARN act.
The news follows reports that Fisker has hired a law firm to advise it on bankruptcy options. It owes a loan repayment to the Department of Energy this month, and has been cutting costs and furloughed its employees last month. The company hasn’t made a car since the summer of 2012….
Fisker was founded in 2007 and has raised over a billion dollars from venture capitalists like Kleiner Perkins, NEA and others, as well as wealthy individuals organized by now defunct broke Advanced Equities. Fisker also received part of a loan from the Department of Energy.
Perhaps the employees of the taxpayer-funded company can also sue the taxpayers for being dumb enough to have loaned cash to Fisker in the first place, instead of investing in other projects that actually have an IRR>0%. Oh wait: this is government “investing” where a 0% return is actually a good thing.
Oh well: time for the administration to spend a few more hundred million in another dead-end company just to purchase a few hundred votes for the next electoral cycle.