Fox emits misinformation about loans to fuel-efficient car companies

››› ››› JOCELYN FONG

In reports on FoxNews.com, America's Newsroom, and Your World, Fox News repeatedly advanced misinformation about Department of Energy loans recently granted to Fisker Automotive and Tesla Motors to support development of fuel-efficient vehicles, suggesting that those funds would be ill-spent. The false or misleading claims include: that the loans will be used to build cars that cost $89,000 and $109,000; that the loans will finance foreign manufacturing; and that Fisker and Tesla are European companies.

Fox News misleadingly reports that loans will build cars that cost $89,000 and $109,000

MacCallum: "Here's the car that they're looking to build. ... The price tag for this green-mobile -- about $89,000." America's Newsroom co-host Martha MacCallum stated, "Listen to this. The U.S. government making a $529 million loan to a small car company that happens to be backed by former Vice President Al Gore. Here's the car that they're looking to build. Get this -- it is called the Karma, OK. It's called the Karma. It's a hybrid. It's built by Fisker Automotive. ... The price tag for this greenmobile -- about $89,000." MacCallum later added, "[O]ne of these cars costs $89,000 -- that's the one that Fisker is making. There's another company, Tesla Motors, and they got $465 million from the same program. They're building a car that costs $109,000." At the end of the segment, MacCallum noted, "[B]efore I let you go, I just want to point out that Fisker says that the Department of Energy loan is gonna be used to finance U.S. production of $40,000 family sedan." Nevertheless, during the segment, the on-screen text stated: "U.S. Loan To Finance Hybrid Car That Will Sell For $89,000." [America's Newsroom, 9/28/09]

FoxNews.com: $529 million loan "to help build a hybrid sports car in Finland that will sell for about $89,000." "The federal government has loaned $529 million to Fisker Automotive Inc., a small car company backed by Gore to help build a hybrid sports car in Finland that will sell for about $89,000, the Wall Street Journal reported. Fisker isn't the only automaker to reap millions from Uncle Sam. Tesla Motors Inc., which offers a $109,000 British-built electric Roadster, received a $465 million government loan." [FoxNews.com, 9/26/09]

Cavuto: "The hybrid sports car will sell for 89 grand." Your World host Neil Cavuto stated, "Now, funding for Finland, and you are footing the bill. An Al Gore-backed company scoring a $529 million federal loan to build cars over there. The hybrid sports car will sell for 89 grand -- not exactly an economy car. Now, we should note some of that cash will go toward building cars here, but that is years down the road." [Your World, 9/25/09]

In fact, Tesla loan and most of Fisker loan will finance less expensive sedans

68 percent of Fisker loan will finance manufacture of $39,900 "Project Nina" vehicles. According to a September 22 Department of Energy press release, $359.36 million of the $528.7 million loan will be used "for Fisker's Project Nina, involving the manufacture of a plug-in hybrid in the U.S. Fisker estimates that up to 75,000-100,000 of these highly efficient vehicles will roll off assembly lines in the U.S. every year beginning in late 2012." The remaining $169.3 million will be used "for engineering integration costs as [Fisker] works with primarily U.S. suppliers to complete the company's first vehicle," the $89,000 Fisker Karma. A September 22 Fisker Automotive Inc. press release states, "A majority of the more than $528 million in low-interest funds will go toward Project NINA, which will see the design, engineering and assembly of Fisker Automotive's next-generation plugin hybrids, starting at about $39,900 after tax credits."

Tesla loan will finance $49,900 Model S sedan, not $109,000 Roadster. According to a June 23 DOE press release, the loan "will finance a manufacturing facility for the Tesla Model S sedan" and the remaining funds "will support a facility to manufacture battery packs and electric drive trains to be used in Teslas and in vehicles built by other automakers." A June 23 Tesla press release states that the Model S has an "anticipated base price of $49,900" after the tax credit.

Fox News suggests loans will only create jobs "in Finland"

MacCallum: Loans "going to Finland to build cars." MacCallum teased her segment on the loans by stating, "U.S. taxpayers -- have you heard this? -- gave a half a billion dollars -- U.S. taxpayers -- to a car company that is creating jobs in Finland." During the segment, referencing both the Fisker and Tesla loans, she stated: "So all -- you've got all of this U.S. taxpayer money to encourage the building of fuel-efficient cars, but it's going to Finland to build cars that cost $89,000 and $109,000. So how is this going to, you know, make any impact on people who are just trying to buy a good car that's fuel efficient?" During the segment, on-screen text read, "Americans Fund Car Co That Will Create Jobs... In Finland":

FoxNews.com: Fisker loan will "help build a hybrid sports car in Finland." FoxNews.com reported that "[t]he federal government has loaned $529 million to Fisker Automotive Inc., a small car company backed by Gore to help build a hybrid sports car in Finland that will sell for about $89,000, the Wall Street Journal reported." [FoxNews.com, 9/26/09]

Moore: DOE loan money should "employ American workers to do this." Fox News contributor Stephen Moore stated, "I think most of the people watching this show, I think, would question the wisdom of the Department of Energy giving out these grants in the first place. But I think the vast, vast majority of Americans would say, at least if we do it, find an American company that's going to employ American workers to do this." Earlier in the segment, Cavuto noted that "some of that cash will go toward building cars here, but that is years down the road." During the segment, on-screen text stated, "$529M Gov't Loan Will Help Gore-Backed Co. Build Cars In Finland." [Your World, 9/26/09]

In fact, most of work related to the loans will be conducted in the U.S.

Fisker's Project Nina will be assembled "in the U.S." The September 22 DOE press release states that 68 percent of the Fisker loan will be used "for Fisker's Project Nina, involving the manufacture of a plug-in hybrid in the U.S. Fisker estimates that up to 75,000-100,000 of these highly efficient vehicles will roll off assembly lines in the U.S. every year beginning in late 2012." The press release states that with regard to the remaining funds -- which will be used for the production of the more expensive Fisker Karma -- that the engineering work "will be conducted at Fisker's Pontiac, Michigan office with support from its headquarters in Irvine, California," and that "[w]hile the final assembly of the Karma will be done overseas, more than 65 percent (based on cost) of the parts required for Karma will come from U.S. suppliers." DOE has concluded that "[t]he combined projects are anticipated to create thousands of jobs in the U.S. and provide substantial support for domestic parts suppliers saving or creating approximately 5,000 jobs." Henrik Fisker, CEO of Fisker Automotive, has reportedly "said that the current Karma would stay in Finland, but its successor could be built in the United States with the Nina vehicle (which will appear in late 2012)."

Tesla loan finances factories in California. The DOE press release states that the loan will "finance a manufacturing facility for the Tesla Model S Sedan" and that "[p]roduction of the Model S will begin in 2011 and ramp up to 20,000 vehicles per year by the end of 2013. This integrated facility expects to create 1,000 jobs in Southern California." The rest of the loan "will support a facility to manufacture battery packs and electric drive trains. ... The new facility expects to employ 650 people in the Bay area of Northern California." On August 18, Tesla announced that it will open the power train facility in Palo Alto, California.

Fox figures falsely claim Fisker, Tesla are European companies

America's Newsroom: "Why is European Car Company Getting Money From Uncle Sam?" The following on-screen text appeared during MacCallum's segment [America's Newsroom, 9/28/09]:

Moore: $1 billion went to "this Finland company" and "a British company." Moore stated: "[T]his is money that was supposed to be for creating jobs. It was Department of Energy money to create a new high-performance car that is fuel-efficient, electric car. Half a billion dollars went to this Finland company. By the way, there was another grant of about that same amount that's gone to a British company." Moore further stated that while he does not support the use of federal funds for this purpose, "If you were going to do it -- and I'm not in favor of it -- but if you were going to give out $1 billion, give it to an American company." [Your World, 9/25/09]

Cavuto: "[I]f we are going to do this, then let's make sure that American companies exclusively benefit." Echoing Moore, Cavuto stated, "I am not for this stuff. But then I would just say, 'All right, well, if we are going to do this -- if we are going to do this, then let's make sure that American companies exclusively benefit.' Like with cash for clunkers we found out a lot of these people are buying, you know, Mazdas and Toyotas. Good for Mazda. Good for Toyota. I am not begrudging them, you know, their attention and success, but I don't think that was the goal here." [Your World, 9/25/09]

In fact, Fisker and Tesla are American companies

Fisker based in Irvine, California. Fisker Automotive's website states that it is "a green American premium sports car company" and a joint venture of Fisker Coachbuild LLC and Quantum Technologies, both of which are California-based companies. Fisker "was founded in 2007 and is based in Irvine, California," according to its BusinessWeek profile.

Tesla based in San Carlos, California. Although Tesla's Roadster is built in Hethel, England, the company "is based in San Carlos, California with additional offices in Rochester Hills, Michigan and West Los Angel[e]s, California," according to its BusinessWeek profile.

Transcript

From the September 28 edition of Fox News' America's Newsroom:

MacCALLUM: And the debate raged for months over saving carmakers in Michigan, as you well remember. But it hardly got any notice when U.S. taxpayers -- have you heard this? -- gave a half a billion dollars -- U.S. taxpayers -- to a car company that is creating jobs in Finland. A half a billion to build cars that most Americans will never be able to afford.

[...]

MacCALLUM: Well, it's a car loan of sorts, and it's raising some questions about the power of high-level access. Listen to this. The U.S. government making a $529 million loan to a small car company that happens to be backed by former Vice President Al Gore. Here's the car that they're looking to build. Get this -- it is called the Karma, OK. It's called the Karma. It's a hybrid. It's built by Fisker Automotive. You may never have heard of Fisker Automotive, but critics are asking why would this U.S. taxpayer funding be going to a car, Karma, that's built in Finland?

Well, that's a good question. The price tag for this greenmobile -- about $89,000. So who are they building this car for? Dave Williams with Citizens Against Government Waste joins us now. Dave, you know, this really caught my eye when I saw this story, because Al Gore is connected to this company, right?

WILLIAMS: He is.

MacCALLUM: And when you go into this, you learn that the Department of Energy spent a lot of time with Fisker. So they have lots of dollars to hand out at the Department of Energy for these programs. Spent a lot of time -- they did test drives with Fisker, they spent all of this energy being there. Why did this company get this huge amount of money from the U.S. government?

WILLIAMS: Well, it shows you that there's no such thing as a retired politician. Once you're a politician, you still have sway with agencies, with other politicians. And it shows that Al Gore still has a lot of clout, unfortunately, in the Department of Energy to secure a $500 million loan.

MacCALLUM: You know, the other car -- there are lots of other companies who applied for this money and didn't get it. And they are being a bit magnanimous about it. They're saying, you know, we're not suggesting that there's any connection, and it's highly possible that maybe Fisker has the best model. Do you think that's the case?

WILLIAMS: Well, no. I'm sure that's what their PR people are telling them to say, because I'm sure they're behind closed doors, you know, pounding the desk, going, "How come we didn't get this?" And everyone looks around and says, "Well, we don't have any influential lobbyists. We don't have the former vice president batting for us."

So, I think that, yeah, they're being very magnanimous, but I don't think it's very sincere. I think behind closed doors they're a lot more worried about this. And this is a program that started under President Bush, so this is, you know, the true hands of bipartisanship coming through here, is that you have a Republican president who signed this, and now you have a former vice president who is a Democrat that's taking advantage of it. Isn't this a beautiful world of bipartisanship?

MacCALLUM: You know, when you look at -- one of these cars costs $89,000 -- that's the one that Fisker is making. There's another company, Tesla Motors, and they got $465 million from the same program. They're building a car that costs $109,000. So all -- you've got all of this U.S. taxpayer money to encourage the building of fuel-efficient cars, but it's going to Finland to build cars that cost $89,000 and $109,000. So how is this going to, you know, make any impact on people who are just trying to buy a good car that's fuel efficient? They cannot afford to buy these.

WILLIAMS: It really isn't. When you talk about a $90,000 car and a $110,000 car, this isn't going to help average Americans. This isn't going to help the working class get these cars. What it does is providing -- is creating a new market for high-end hybrids and electric vehicles. And the last thing the government should be doing is putting money into this. If the private sector thinks that there's money that can be made with this, they should be funding it, not taxpayers. Imagine asking a taxpayer who makes $30,000 a year, saying, "Hey, listen, we want, you know, some of your money, so we can have a car to sell to rich people." That doesn't fly anymore.

MacCALLUM: Yeah, you know, and you're touching on the most important point of all of this. I mean, if you just let the car market decide where this money should go, and if these huge -- and there's a lot of big venture capital firms involved in these businesses -- if they believe so strongly that these are huge -- good investments that are gonna make them a ton of money, they're going to give these companies the money that they need, right?

WILLIAMS: I suspect that the private sector looked at this and said there is no market for it.

MacCALLUM: Well, that's scary.

WILLIAMS: So -- that -- that is scary. And the government --

MacCALLUM: Because they're messing with a lot of taxpayer dollars if that's the case.

WILLIAMS: And this is really the government of last resort saying, "We couldn't get money anywhere else, so we're coming to you, we know that you have no internal controls, and if we just get some popular vice president on our behalf, sure, we'll get a few hundred million dollars." And will the taxpayer ever get paid back for this? It is very highly unlikely that the taxpayer will get paid back this loan.

MacCALLUM: All right. And before I let you go, I just want to point out that Fisker says that the Department of Energy loan is gonna be used to finance U.S. production of $40,000 family sedan, but that sedan has yet to be designed. So we'll keep a close eye on that one. Thank you very much, Dave.

From the September 25 edition of Fox News' Your World with Neil Cavuto:

CAVUTO: Now, funding for Finland, and you're footing the bill. An Al Gore-backed company scoring a $529 million federal loan to build cars over there. The hybrid sports car will sell for 89 grand -- not exactly an economy car. Now, we should note some of that cash will go toward building cars here, but that is years down the road.

Well, Steve Moore from The Wall Street Journal says this Finland thing is a fiasco. But, Stephen, it's built in there, and I don't know how the heck it was built in there.

MOORE: Yeah. By the way, I'm with you, Neil. If somebody gave me the opportunity of a lifetime to work at the White House, I don't think I'd go and trash the president. And you know what? You know --

CAVUTO: Well, I'm not here to trash Matt. I mean, I am just here -- that's my opinion.

MOORE: No, no. But you know what? This is important, though.

CAVUTO: Matt is, you know, Matt -- that's fine.

MOORE: There is such a shortage of loyalty in this town of Washington that I live in, and Ronald Reagan said it best -- if you want a friend in Washington, buy a dog.

But let me just say this about this story about this company in Finland. I mean, this is money that was supposed to be for creating jobs. It was Department of Energy money to create a new high-performance car that is fuel-efficient, electric car. Half a billion dollars went to this Finland company. By the way, there was another grant of about that same amount that's gone to a British company. That's almost $1 billion, Neil, of federal money that is going to --

CAVUTO: But how did that happen? How did -- the idea was it was supposed to help us.

MOORE: Right.

CAVUTO: I mean --

MOORE: Exactly. Well, how it happened is a great mystery to me, because, you know, the point is I'm not for giving federal grants to any company, even if they're an American company. You know me, Neil. I don't like this kind of largesse. But at least if we're going to spend money --

CAVUTO: You wouldn't give money -- you wouldn't give money to your mother. I mean, I know that.

MOORE: Exactly.

CAVUTO: So the fact of the matter is --

MOORE: But my point is --

CAVUTO: No, I know, I know. But this is --

MOORE: If we're going to do it --

CAVUTO: I remember you had said, and you had written, that these are the dangers of federal largesse.

MOORE: That's right.

CAVUTO: You know, it gets out of hand, right?

MOORE: Yeah, but not only that. If you were going to do it -- and I'm not in favor of it -- but if you were going to give out $1 billion, give it to an American company. I mean, my goodness, Neil, Chrysler and GM are bankrupt. We've put $100 billion into these companies, and we're giving them money to our rivals.

And then think about this, Neil. We are borrowing $1 billion from the Europeans and the Chinese to get the money so we can give a grant to the European companies. With $1 billion, you could create about 20,000 middle-class jobs in this country. It just makes no sense from an economic policy standpoint.

CAVUTO: That's about 10 seconds of federal spending, but you are right. But let me ask you, Steve. The bigger issue here that I think a lot of people forget is that built into this government dependency, whatever its negative fallout, is that people are now expected either to buy cars, either to buy green cars, either to go green, to buy a house, to buy a bigger house -- the government is going to backstop us. And we were talking just before with Matt about something that happened a year ago with the arrival of TARP and, you know, all of that that we set, you know, in motion a dangerous precedent, did we not?

MOORE: Well, I would say so. And I think most of the people watching this show, I think, would question the wisdom of the Department of Energy giving out these grants in the first place. But I think the vast, vast majority of Americans would say, at least if we do it, find an American company that's going to employ American workers to do this.

CAVUTO: But you'd think that would be written into it

MOORE: I mean, we have 15 million Americans unemployed.

CAVUTO: But see, now I am not for this stuff. But then I would just say, "All right, well, if we are going to do this -- if we are going to do this, then let's make sure that American companies exclusively benefit." Like with cash for clunkers we found out a lot of these people are buying, you know, Mazdas and Toyotas. Good for Mazda. Good for Toyota. I am not begrudging them, you know, their attention and success, but I don't think that was the goal here.

MOORE: Well, I mean, the point -- the goal, they say, was two-fold. One was to create jobs with stimulus money. And the second was to create a new car that's fuel efficient and runs on batteries. And the Department of Energy says the best company they could find was this Finnish -- Finland company.

Look, I don't know about that, but I do know there are a lot of companies in the United States in the race to try to develop this technology. I mean, it would be like, you know, when we were trying to build a satellite and put -- be the first one to the moon, if we said, "You know what? We're going to contract this out to the Russians to do it." What sense would that make?

CAVUTO: That would have been weird, I guess. Stephen, always good having you. Thank you very much.

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