Bad Karma
As I reported a long time ago, the US govt should never have been in the business of making large and risky loans to companies based purely on the sunshine coming out of their ass.
The failure of Solyndra finally has people talking about one of the other terrible loans we made to appease Obama's whims: namely the totally stupid loan we gave to Fisker so that they could develop and build a wildly overpriced hybrids sports car. We gave over $500MM to a company with no history, no proven management, no factory, and not even a terribly innovative product. Why did we do this???
Well, now it has all of a sudden become a big thing to talk about how the Karma is not even being built in this country..... but actually, that was in the business plan when we loaned them the money. The truth is that the amount of money to start a real mass market car company these days is more or less obscene, as brand, dealerships and govt regulations all play their part. The most recent estimate I heard is that it would cost about $10 billion to create a car company with a viable brand and dealership system in the US and Europe.
The loan to Fisker simply does not make sense on a different level as well. This is not a green car for the masses. This is a famous car designer's dream of making a car in his own name. A car which is less practical than a Corvette.
It is very difficult to get a new car company off the ground. Regardless of how much press and free publicity you get, passing government regulations, actually manufacturing the car, selling it at a profit, and maintaining reliability and customer service are all very difficult steps.
Which reminds me, Apterra, once another Golden God of the media, is falling apart. Interestingly, they have posted a consulting project asking my business school to help them now that their business model has totally fallen apart and their investors are clamoring for money.
Electric cars will come when they are ready and when the market is today for then. Unlike our good friend Obama says, it is not the role of the govt to tell people what they want.
The failure of Solyndra finally has people talking about one of the other terrible loans we made to appease Obama's whims: namely the totally stupid loan we gave to Fisker so that they could develop and build a wildly overpriced hybrids sports car. We gave over $500MM to a company with no history, no proven management, no factory, and not even a terribly innovative product. Why did we do this???
Well, now it has all of a sudden become a big thing to talk about how the Karma is not even being built in this country..... but actually, that was in the business plan when we loaned them the money. The truth is that the amount of money to start a real mass market car company these days is more or less obscene, as brand, dealerships and govt regulations all play their part. The most recent estimate I heard is that it would cost about $10 billion to create a car company with a viable brand and dealership system in the US and Europe.
The loan to Fisker simply does not make sense on a different level as well. This is not a green car for the masses. This is a famous car designer's dream of making a car in his own name. A car which is less practical than a Corvette.
It is very difficult to get a new car company off the ground. Regardless of how much press and free publicity you get, passing government regulations, actually manufacturing the car, selling it at a profit, and maintaining reliability and customer service are all very difficult steps.
Which reminds me, Apterra, once another Golden God of the media, is falling apart. Interestingly, they have posted a consulting project asking my business school to help them now that their business model has totally fallen apart and their investors are clamoring for money.
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| Yes... it is a flying sperm |
Electric cars will come when they are ready and when the market is today for then. Unlike our good friend Obama says, it is not the role of the govt to tell people what they want.
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