Fisker

Undoubtedly alternative energy and transportation innovator Elon Musk (Flickr photo: Jurvetson) – like his competitor for the taxpayer-funded, six-figure electric automobile market Henrik Fisker – is a smart guy. But will economic and technological realities humble him, or worse, make him look like a fool?

After the experience recounted last week by New York Times journalist John Broder, who test drove the Tesla Model S in frigid conditions that required frequent unplanned recharging stops throughout the Northeast, humility is out of the question for Musk. The jury is still out on inanity.

Amidst its ongoing financial problems and search for a “strategic alliance” that it says is not an attempt to sell the company, Fisker Automotive continues to make its current business partners extremely nervous.

In particular are those “investors” that represent the taxpayers of Delaware, who foolishly committed $21 million in public money to the California-based company, in exchange for a promise to take over a former General Motors manufacturing plant to build its next electric car, the Atlantic. But rather than generate thousands of “green jobs,” instead the factory sits dormant while Gov. Jack Markell and the state’s economic development officials stew. And now the state has learned that if Fisker goes belly-up or fails to operate in Delaware, the repayment of the funds it has outlaid is subordinate to the rights of other lenders to get their money back, including the U.S. government.

The Chinese government, unsurprisingly, has approved a potential sale of stimulus-funded ($279 million-plus) A123 Systems to one of its own automobile parts manufacturers, should the Wanxiang Group’s bid be the highest this week for the bankrupt electric vehicle battery maker.

That was the easy part.

So far Republican Sens. Charles Grassley (Iowa) and John Thune (S.D.) have repeatedly raised questions and concerns about the possible transfer of A123’s business, jobs and technology from the U.S. – where taxpayers have thrown in approximately $132 million only to see many times that amount in losses since its 2009 initial public offering – to China. They’re no longer the only voices speaking out against the transaction.

A reply by stimulus recipient ($115 million of a $249 million grant paid out) A123 Systems to an inquiry by Republican Sens. Charles Grassley (Iowa) and John Thune (S.D.) showed the electric vehicle battery manufacturer received nearly $1 million in Recovery Act funds on the day it declared bankruptcy.

The money flow is not likely to stop.

A123 as a whole, or in pieces, is going to be sold to the court-approved buyer(s). That is likely to be either Johnson Controls, which is the lead bidder for the company’s automotive business, or Wanxiang Group, which wants to buy the whole company. A123 had an agreement to transfer up to 80 percent of the company’s ownership to the China-based automotive parts manufacturer over the summer, but its bankruptcy filing on Oct. 16 – with Johnson Controls as the new automotive assets purchaser – nullified its agreement with Wanxiang.