Senators raise alarm about Chinese bids for Fisker Automotive

Two U.S. senators have raised concerns about the potential sale of struggling electric-car manufacturer Fisker Automotive to Chinese buyers, reports the Detroit News. The automaker has received several million dollars in loans from the US Department of Energy, which is under fire as some beneficiary companies of the federal loans filed declared bankruptcy protection.

Senators Chuck Grassley from Iowa and John Thune from South Dakota raised the issue, citing reports that the start-up automaker had received bids from multiple suitors, including two Chinese firms, Geely Automotive and Dongfeng Motor.

Grassley said: "When we raised concerns about taxpayers supporting a company with foreign ownership, the Energy Department waved those concerns away. Now, those concerns may soon become a reality. Like A123, this looks like another example of taxpayer dollars going to a failed experiment. Technology developed with American taxpayer subsidies should not be sold off to China."

Although Fisker is still weighing its options, there is no doubt that the automaker will not survive without external financial help. In December 2012, Fisker confirmed it had retained an investment banking advisory firm to find a strategic partner. The transaction is likely to attract attention due to a number of reasons.

A123 Systems, another recipient of Energy Department funds and a battery supplier to Fisker, was acquired by Chinese firm Wanxiang last month. The opposition is largely political in nature, as the Committee on Foreign Investment in the United States later approved Wanxiang's application to acquire the battery supplier, based on the Chinese company's higher bid. Another factor contributing to the criticism is the potential shift of jobs to China. Meanwhile, the Energy Department has defended the auto loan programme, stating that the loans had strict conditions in place to protect taxpayers.

 

Loading