Fox Reverses Success Of Clean Car LoansJune 10, 2013 11:05 AM EDT ››› MAX GREENBERG
Fox News falsely suggested that 56 percent of car companies that received loans through the same government program as electric automakers Tesla and Fisker have failed. In fact, most of the automakers are up and running -- 56 percent of those that asked for loans have gone under, indicating that the Department of Energy exercised due diligence in reviewing applicants.
This week, Fox & Friends Sunday claimed that "56% Of Carmakers Who Got Federal Help Fizzled," citing a Daily Caller story on the Advanced Technology Vehicle Manufacturing (ATVM) loan program. Co-host Tucker Carlson, who also serves as editor-in-chief at the Daily Caller, later opined "If I run a venture capital firm ... and in four years, 56 percent of the companies I invest your money in go bankrupt ... I would be in deep trouble." He concluded, "the government should not be in the venture capital business. They're not good at it."
However, Fox News reversed the success of the program: 56 percent of the identifiable car companies that applied for loan guarantees have ceased operations, but most of the car companies that received these loan guarantees are up and running. Venture capitalists, on the other hand, expect a successful investment strategy to yield a 70 percent failure rate.
Furthermore, the $193 million disbursed to Fisker Automotive (of $529 million originally granted) and $50 million to Vehicle Production Group (VPG) represents only 3.2 percent of the $7.5 billion set aside by Congress to cover losses from the ATVM program.
While loan programs like ATVM are intended to help companies with promising but risky new technologies find financing, overseeing agencies are expected to review applicants and weed out those that are too risky, or less likely to generate meaningful advancements. In the case of ATVM, GigaOM has pointed out, the DOE "was actually pretty cautious and conservative," contrary to media portrayals of profligate federal spending. The list of failed startups that didn't meet the agency's standards is further proof of that restraint.