Fisker Bankruptcy Is Imminent

Posted: Nov 27 2013, 5:41am CST | by , Updated: Nov 27 2013, 5:49am CST, in News | Other Stuff

Fisker Bankruptcy could have Future Consequences

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The bankruptcy of Fisker Automotive is imminent. However, this financial collapse of the car maker could have future consequences for taxpayers that are not good at all.

With Fisker Automotive going bankrupt soon, the US Government may have more to lose than just the $168 million it lent the automaker. Fisker has tax breaks that amount to an astronomical $320 million. The papers submitted before the law state that the company will be bought by a Hong Kong big shot named Richard Li.

However, it is to keep the tax breaks after its rise from its bankrupt position. The losses that Fisker faced were close to $800 million. It is on these huge mistakes that it will be getting future tax benefits worth the aforementioned $320 million. These phenomenal tax breaks will only be a burden on the taxpayers in future times.

The blunder made by the Obama administration was when it extended a loan of $529 million five years ago to Fisker. This was to increase the manufacture of futuristic vehicles in the United States. Green automobiles that were hybrid answers to yesterday’s gas guzzlers were what the new government had in mind when it took this step. It backfired.

The amount meant as credit was frozen in 2011. This is not the first such instance of non-repayment of a loan by a big business. Nor is it the first time tax breaks have been sought in the times that are yet to come. The solar panel company, Solyndra LLC did something similar some time back.

Source: Reuters

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<a href="/latest_stories/all/all/20" rel="author">Sumayah Aamir</a>
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