Fisker is the Second Shoe to Drop

A story on Delaware Online today (sorry, I refuse to subscribe to the death of another tree in order to boost News Journal sales so I am not sure if it was actually printed in the paper version) displays the folly of American green energy policy.  Just a month after Blue Water Wind failed and cost us untold millions of dollars and just over a month after Fisker announced that their car faced similar battery problems as the Chevy Volt, the embattled car company, who has pushed back their production dates more than 2 years, has laid off 25 workers and cut contracts with a number of subcontractors.  Fisker has been touted as the next big thing to prove that the government's green energy strategy works.  Yet from it's inception it has needed massive government subsidies and government assistance in the form of sweetheart land deals to stay afloat.  After promising Delaware's largely union autoworkers big payouts if they could just hold on through the retooling of the former GM plant, the company has all but dashed those hopes.  Thousands of Delaware autoworkers who have been home after being laid off by GM and Chrysler and waiting for Fisker to start up now have little hope for a return to automobile manufacturing in Delaware.

On this blog back in September, we talked about Delaware's Solyndra lesson.  We pointed out the problems with Fisker's numbers and we referenced a number of other articles that had similar concerns.  The bottom line, many of us saw this coming but the government ignored us at best and made fun of us at worst.  They called us crazy and yet here you can see the results of government attempting to pick winners and losers.  In the end the taxpayers lose when their money is taken and wasted, the employees lose when they end up out of work and the communities lose when businesses close their doors and the ancillary jobs leave town. 

Mark this date.  In December of 2011, I gave a talk at a meeting of concerned citizens where we covered a range of topics including green energy, fracking and the cost of our government's green waste.  You can see the presentation from that meeting here.  The next green energy disaster to rock Delaware will be Bloom Energy who is relying on Delmarva Power to subsidize its Bloom Boxes by tacking on a $2-$4 charge to each bill.  Government cannot and should not pick winners and losers.  This is yet another reason why we simply MUST put people who understand our markets and the design of our government in the places currently occupied by corrupt officials more interested in cronyism than their constituents. 

Fisker's Aptly Named Car Shows the Folly of Government

For the last 6 years, Delawareans have been barraged with promises from so-called "Green companies", most of which promised lofty job numbers and economic booms.  Blue Water Wind came to town with a plan to provide wind energy that would be clean and green and could even eliminate the need for dirty coal fired plants.  Their scheme turned out to be one that would produce far less energy than expected, one that required the government to enforce a mandate on Delmarva Power which forced them to pay more, one that required the federal government to give the company a non-compete contract for the off-shore wind farm location and one that ultimately failed just days ago when the project did not receive MORE government assistance in the form of more direct subsides.  Despite receiving awards of more than $800 million (although we can't be sure how much of it was spent on the project, how much went into the pockets of government cronies or how much the government still has, if Solyndra is any example, that money is long gone) of which we know that enough was used to pay at least 6 executives making 6 figures plus their assistants for 6 years (likely around $4 million) plus the cost of lobbyists, legislators (this is not a typo), architects, lawyers and surveyors for the ramp up to production (which likely cost Delmarva ratepayers millions more), Blue Water Wind needed MORE government funding just to begin production on a surveying tower to see if their idea would ever generate a single kilowatt of power!  After Solyndra, the government realized that green energy problems (like those that plagued Spain, the nation whose green jobs plan bankrupted their nation and after whom Obama's green jobs plan is modeled) would cause more scrutiny and so they decided to cut funding to this off shore wind disaster.  Subsequently, Blue Water Wind folded because they were unable to secure private backing (despite the assurances of company leaders who promised that it would be able to function without government support) for their venture.  Their contract with Delmarva ended 2 days ago at the stroke of midnight and along with it, any chance that we'd see a dime from the investment returned.

More recently, the buzz has been about the Obama crony run car company, Fisker.  You might remember Fisker (or more likely not) as the start-up company who out muscled Tesla as the Obama Administrations favorite in the Plug-in electric car market.  It bought (on the cheap) the Boxwood Road site formerly owned by GM and has been rehabbing it in preparation to begin production on the "cheaper" of its two offerings, the Nina (the more expensive Karma is made in Finland because Fisker says that no one in America can do the job...) in 2013.  The Karma is offered for sale at Union Park's family of dealerships in Wilmington.  A friend of mine recently tried to secure a test drive of one of the Fisker Karma's at Union Park only to find each time that he came by, that the vehicle was "in the shop" for some kind of software upgrade or maintenance issue (odd for a showroom car that is never driven).  Now, this friend may or may not have the means to purchase the vehicle, I don't get into that kind of thing but if I had to guess, I would say his credit record and history would warrant at least a test drive of almost any vehicle ever built.  The Karma retails for more than $102,000 and less than 300 have yet been sold.  Now remember, the Fisker business model actually called for them to own a significant portion of the hybrid/electric car market in just the first couple of years of production.  They would have to beat to market shares of GM, Toyota (who owns the largest share with the Prius), Nissan and Honda to name a few.  Delaware's Caesar Rodney Institute highlighted the bold plan years ago:

Competition in the hybrid market is fierce. All the major automobile producers are moving into the hybrid market. By 2015 GM plans for 26 out of 33 models to be some form of hybrid. Chrysler plans to have 8 hybrid or electric vehicles by that year. The current U.S. hybrid market averages across the business cycle 25,000 cars per month (300,000 per year). Three quarters of the sales are Toyota's Prius or Lexus, with Prius accounting for 55% of the total hybrid market. Ford and Mercury (Fusion, Milan) currently have a 9% market share, with Honda at 8% and GM at 5%. Sales have dipped during the recession and are directly influenced by the price of gas.

 

Will the market support Fisker's 2014 sales projection? U.S. car sales should top 8 million by 2014. If the hybrids share of cars rises from its current 1% and climbs to 5%, hybrid sales in 2014 will be around 400,000. This means that Fisker, with a limited retail and service network and no established reputation, will capture 19% to 25% of the U.S. hybrid market. Should 50% of Fisker's cars be sold as exports, the highest proportion of exports for any current American company, Fisker is assuming a U.S. hybrid market share of 9% to 13%, greater than the current shares of Honda and GM.

 

The likelihood of such a plan working was also a subject of the Institute and it found that the plan left far more questions on the table than it answered.  Fisker has had to hike the prices of the Karma to keep the company afloat, pushed back production and start-up plans, has sought more taxpayer funding and still has only delivered a relative handful of vehicles.  It's certainly not competitive in the market with companies like Toyota, Honda and Nissan.  Which bring us now to the news of today which is also a blow to sales of the start-up car makers most expensive model.  It turns out that the battery packs inside the Fisker Karma's can catch fire (much like the Chevy Volt which was recalled earlier this year) and cause explosions.  Battery fires have plagued the electric car industry largely due to government's force behind the implementation of the unproven and untested technology to save face in its quest for green energy goals.  The bottom line is, do we want to pin our hopes to another Pinto or Yugo?  Fisker is already north of $600 million in government subsidies, some have said it's closing in on $1 billion and now with these setbacks, business will suffer.  There can be no doubt that the $50,000 Nina, which is planned to be built in Delaware will suffer from these setbacks if it comes online in 2013 as promised and many good folks, like the people at Union Park and the many contractors who embraced this green energy plan will be affected by these pains.  The fact is that electric cars aren't ready for prime time and no amount of government force will make it so.  In fact, I say, when the private market venture capitalists start investing THAT is when you will see the rise of the electric car.  

Government picks for winners and losers, Solyndra, Blue Water Wind and Fisker are proving what conservatives have been saying for a long time, that private markets should be dictating the products in the market place.  Government wastes untold billions of dollars every year that could be used to pay down or deficit on misguided attempts to solve every problem when the reality is that it just can't do it.  Government solutions rely on mandates, cash subsidies and risky gambles with other people's money that more often than not lead to disaster.  Look at the latest deal with Bloom energy.  Delmarva Power ratepayers are now venture capitalists (don't get excited, you get no return on this investment) in a company that markets unproven emergency backups to major corporations.  Better still, not only did the government have to force Delmarva Ratepayers to subsidize Bloom but it also forced subsequent governments to have to stick with the plan.  That's right, future General Assemblies MUST remain in the agreement with Bloom for 21 years.  TWENTY ONE YEARS!  No matter how much it costs, how effective it is or how many jobs it produces.  Further, they had to compromise their own leftist principles to do it!  In 2011, the General Assembly passed a bill that redefined the term "Renewable Energy" to include Natural Gas (a fossil fuel considered dirty by the left) because the Bloom boxes need natural gas to operate and because anything not classified as renewable under Delaware's Renewable Energy Portfolio costs Delmarva more money to use.  UNREAL!  We've got to stop this madness.  We need someone with an ounce of common sense to make some changes.

A Broadband Expansion Plan That Works

Delaware is known as “The First State” for its role as the first state to ratify the U.S. Constitution. It could also be known as “The First State” for its position leading the country in access and adoption of broadband internet, with 100 percent of Delaware citizens having access to broadband from at least one provider (National Broadband Map).

Like all advances in communications technology, broadband Internet means faster, wider and cheaper access to information. For individuals this means being able to do research for school from the comfort of your home, and for businesses it can mean reaching new markets with products, tracking shipments and deliveries, and paying bills online. Whether for individuals or businesses, broadband access means being able to work more quickly and efficiently.

Any economist will tell you that with greater efficiency come greater profits, and greater profits means having the capital to grow and create jobs, which is exactly what we need in today’s slumping economy. Broadband access is the single most important investment businesses can make in order to increase revenues and create jobs. Unfortunately, many areas in the country lack any kind of broadband access and are unable to take advantage of its many benefits.

According to the Internet Innovation Alliance, many Americans in rural areas lack access to broadband Internet, or even any Internet at all. For businesses, this means being unable to compete in an ever increasingly global economy, and for individuals, it means starting at a disadvantage to those who have access. Currently in Washington there is a lot of debate about the best way to increase access to broadband through government programs and loans. But, clearly, a private market solution is preferable to an approach that once again taps the American taxpayer.  

A few months ago AT&T announced that it was seeking to merge with T-Mobile USA, a German-owned wireless company. In information provided to the Federal Communications Commission (FCC), AT&T has committed to build out its promises to expand 4G broadband wireless network to cover more than 97 percent of the country if allowed to merge with T-Mobile. Additionally, AT&T has announced that with the merger, they would bring 5,000 outsourced call center jobs back to the U.S. as well as maintaining the 25,000 T-Mobile call center jobs here already.

With the benefits of the merger, coupled with the general benefits of broadband for the economy and jobs (10 Facts About Broadband and Jobs) it is hard to see why the Federal government has not already approved the merger and started getting Americans back to work.  The T-Mobile/AT&T merger sounds like common sense to me and Delaware could be a place where AT&T could put those 5,000 new American jobs.  We have the facilities and the infrastructure to facilitate that kind of work and we have people well versed in both technology and customer service.

As a candidate for the Delaware General Assembly, I’m calling on fellow candidates, my opponent, Rep. John Viola and current legislators to join me in supporting this private sector venture and to call on Congress to end its hostility towards business.

DelDOT thugs like Bad Santa's

Families in Radnor Green/Ashbourne Hills, a blue collar community in Claymont, Delaware are surveying the damage caused by DelDOT employees who, in Grinch like fashion ripped their recreation literally from the ground.  Like the little town of Whoville that was terrorized by a Grinch whose heart was an empty hole, residents in Claymont were terrorized by a nanny state run amuck.

Sure, the month was March and DelDOT uses trucks not sleds, but the song below accurately describes the actions of the State of Delaware's Department of Transportation and their feelings on the situation:

While it might seem funny when you read comments like those above, the real facts and the lives affected by the actions of an oppressive government don't leave much room for laughter.  While there have indeed been dissenting opinions on this, most rational people agree, government was in the wrong.  Some have blamed the owners for not complying with the government order to move their property (some of these poles had been in place for 40+ years) despite the fact that the families had followed the correct process to challenge the law, while others have insisted the blame rests with the government but that it should be limited to those who passed the law and passed along the work order to the ground workers.  Normally I would agree with that second group but I have had a week to see what the DelDOT ground workers actually think. 

The link above will take you to a Facebook page I created for discussion about the incident.  I expected the DelDOT workers to defend their actions but I was not prepared for the utter contempt they held for the property owners or for the legal process that made their enforcement questionable.  Further discussions would show the true colors of Delaware's public workforce: It doesn't matter what they do, what they say or how they affect your life because THEY are union and THEY enforce the law, no matter how wrong or unconstitutional it is. 

You need to keep that mindset in mind when you read the rest of this story.  To government workers, WE THE PEOPLE are not their bosses, we are the sheep that they must corral.  They don't care that we, the larger populace, provide their salaries because they see it as "earned" and they don't see the need to answer to US because they have Union leaders and government management and bureaucrats telling them that they don't.  They feel untouchable because laws are written to protect them.

That's why they felt no remorse in turning Radnor Green upside down last week.  You see, until last week, when DelDOT stormed the neighborhood with dump trucks, pickups, flatbeds and front end loaders on a mission to rip out basketball poles that were too close to the road according to a questionable law passed in 2005, the neighborhood kids had enjoyed playing on their hoops almost every day.

Last week, all that changed when DelDOT employees stormed the neighborhood and yanked the poles.  Despite the plea's from the owners to leave the pole on their property, and a promise from a State Police Officer to the contrary, DelDOT workers removed the poles to their service center and demanded that residents (some of whom were not home when their property was taken) pick up their property from the DelDOT yard.  DelDOT is facing a $1 Billion shortfall within the next 5 years without spending cuts or revenue enhancements (toll/tax/fee increases) but for some reason, this was seen as a good use of tax payer dollars:

While this issue is FAR from over, this is likely the last time you will see much in the mainstream media about it.  Yesterday afternoon, the McCafferty family, who has led the charge to get their pole and hoop returned to them, discovered the grim reality.  Not only did the DelDOT workers lie, cheat and steal to get the poles, they also decided to destroy them.  Every single backboard was in one piece when it was PLUCKED from the neighborhood yet, every single one of them now is destroyed.  Here are some images of the poles as we found them yesterday:

Every single backboard has a hole in it, poles were damaged and the DelDOT employees couldn't care less.  As you'll see in the video below, they stood on the other side of the yard, smugly video taping as Rep. Bryon Short and I used our personal pickup trucks to transport what it took them 2 dumps, a front end loader, a flat bed, 3 pickups and 5 police officers to transport.  But then again, I do always say that the private market is more efficient than government almost 100% of the time.  I'll leave you with this final video from the crew over at the News Journal:


Update: Pastor Dowell is standing up to show that this is a national movement!  We've had ENOUGH of government employees taking liberty and property from people...and then pretending like it's just their job.

Beau Biden Foreclosure workshops

So, foreclosure workshops are the AG's new responsibility?  We're spending taxpayer dollars on things now that the banks should be and HAVE BEEN doing for years?  Here is an excerpt from an article on Biden's "workshops":

 The Attorney General’s Mortgage Fraud Task Force is sponsoring free statewide housing workshops on March 22 in Milford and March 23 in Wilmington to help Delawareans who are at risk of losing their homes to foreclosure.  The workshops, which are sponsored in conjunction with the State Bank Commissioner and Delaware State Housing Authority, are offered to facilitate loan modifications, reduce foreclosures, and provide educational information to help residents stay in their homes and manage debt.

“Too many Delaware families are suffering the devastating effects of foreclosure,” Attorney General Beau Biden stated.  “One of the ways we have responded to the foreclosure crisis is organizing housing workshops where homeowners can sit face-to-face with their lenders and discuss repayment plans to stay in their homes or other options to avoid foreclosure.  I’m pleased that ten of our largest mortgage servicers will be participating in next week’s workshops and I strongly encourage homeowners who are behind on mortgage payments and at risk of losing their home to attend, meet with their lender, and get information about the many services available to them.”

Foreclosure filings statewide in 2010 surpassed the record set in 2009, increasing 4.9% to 6,457.  All three counties recorded increases, with a 4% increase in Kent and New Castle Counties and a 7.6% increase in Sussex County.  Foreclosure filings for the first two months of 2011 are occurring at the same pace as last year, and it is expected that filings will surpass 6,000 again this year.
Since the Attorney General's Mortgage Fraud Task Force was established in 2009, more than 900 homeowners have attended 15 workshops with mortgage lenders and these events have helped more than 300 Delaware families modify their mortgages with the help of their lenders.  

Homeowners who have missed mortgage payment, are facing foreclosure, or suspect foreclosure fraud can receive immediate on-site help from housing professionals.  At each workshop, mortgage servicers, state employees, and HUD-certified housing counselors will discuss mortgage modifications, the Delaware Mortgage Assistance Program (DEMAP) and other government homeowner programs, and foreclosure rescue scams.

Well Beau...here's some news you may not be aware of.

 - HSBC loan modification program
 - Bank of America loan modification program active since 2008
 - Citi loan modification program active since 2007
 - Chase bank loan modification program

So...can you tell me again why we're spending tens of thousands of dollars on your programs to put people in touch with their banks when people can just make a phone call?

What's all the Wisconsin fuss about anyway?

For a few weeks now, our TV news has been inundated with video and images from the protests in Wisconsin and with talking heads constantly battling over whether the public employee unions have a natural right to band together, buy some politicians and then bargain with them over taxpayer money. Most Americans inherently know that this concept is wrong, even the ultra-liberal President FDR stood up against public sector unions. With that said, a favorite lie of the union apologists is that: "Public sector workers get paid less than private sector workers in exchange for better benefits." This is an argument that they use especially with teachers to explain how underpaid they are. Well a friend of mine has provided me with the following information about Wisconsin teachers (and select public employees) and their salary/benefit packages. Underpaid? You be the judge.... Continue reading on Examiner.com: What's all the Wisconsin fuss about anyway? - Wilmington Education | Examiner.com