Fisker May Never Build Electric Cars in US

Peter Foley/Bloomberg via Getty Images(NEW YORK) -- The luxury carmaker Fisker Automotive continues to signal it could ditch plans to build its next generation hybrid electric vehicle in the United States, despite the nearly $200 million in Obama administration loan money it has already received.

Fisker received federal funds in part to help purchase a shuttered General Motors plant in Delaware, where it predicted it would one day employ 2,000 auto workers to assemble the clean-burning gas-electric family car, known as the Atlantic.

But company executives began hinting in February that it would reconsider that plan and look for a cheaper place to build the car after the Department of Energy froze the $529 million green-energy loan the company had received, and had been drawing on since 2010.

Fisker used the first $169 million in taxpayer funds to bring to market the Karma, a flashy $100,000 hybrid sports sedan that it assembles in Finland. After a series of delays and stumbles, the company announced it had sold its first 1,000 Karmas, bringing in $100 million in revenues so far this year. The sleek, high-end model has been well received by critics, and the company reported this week it has started to sell in Europe, and could soon be on sale in the Middle East.

Earlier this year, one of the Karmas stopped working in the middle of a Consumer Reports road test -- an embarrassing breakdown that Fisker later blamed on a faulty battery. The lithium-ion batteries became the subject of a recall, including for a defect that raised the risk of fires.

More recently, one of the high-priced cars went up in flames in the garage of its Texas owner. Fisker said the car was unplugged at the time of the fire and the battery pack was intact and still working after the blaze -- all clear indications, they said, that neither the car nor its battery had anything to do with the fire. A spokeswoman for the National Highway Traffic Safety Administration told ABC News the agency is "aware of the incident and is working with local authorities to evaluate whether there are any potential safety implications."

The U.S. Department of Energy has said little about its decision to freeze the balance of Fisker's loan, which was intended to pay for the development of the Atlantic. The department confirmed it hired a restructuring advisor to study the terms of the agreement and assess the performance of the company.

"The Department continues to review Fisker's financial and operating status and is working with the company to review its revised business plan, but no decisions have been made," an Energy Department official said in response to questions from ABC News.

Roger Ormisher, a Fisker spokesman, acknowledged that Fisker had failed to meet the government's milestones for the rollout of the Karma, and that those delays "put us into the process of negotiation with the DoE, who put further monies on hold until we could settle on mutually agreeable milestones" for the rollout of the next car.

It now appears that the company's decision about where to assemble the Atlantic could hinge on whether it will continue to receive federal support. ABC News asked Ormisher if Fisker still felt bound to manufacture the car in Delaware if federal funds were no longer available, or if the company would look for a cost-effective location in or outside the U.S. to build the car.

"If Fisker no longer gets government monies, then obviously we are in a place where other options are open to us and have to be considered from a business perspective," Ormisher said. "However, given the work that we have done at the plant in Delaware and the fact that we own it, it is still our primary option to consider."

Fisker appears to be preparing for the possibility it will need to move forward without further government support. The company has continued an aggressive push for outside investors.

"It is important to note that Fisker Automotive's success is not dependent on government money," Ormisher said. "We are primarily privately funded, having raised more than $1 billion in private equity financing since 2007."

One of the company's major backers is the venture capital firm Kleiner Perkins Caufield & Byers, according to published reports. The firm's partners include John Doerr, a billionaire tech mogul who serves on President Obama's Economic Recovery Advisory Board.

Copyright 2012 ABC News Radio

Neiman Marcus Sued over Returns Policy, Employee Affair

Comstock/Thinkstock(DALLAS) -- Sex, money, shopping and betrayal spurred a woman scorned to file suit against Neiman Marcus after the luxury retailer, known for its generous return policy, refused to take back $1.4 million worth of merchandise.

During the three years Patricia Walker spent bedridden recovering from a traffic accident, her then-husband Robert Tennison's spending spiked at the retailer's Dallas location. He showered her with an outsized pile of gifts. But all the while, according to the suit, he was allegedly carrying on a secret affair with Favi Lo, his wife's trusted Neiman Marcus personal shopper.

Lo earned a steep commission from the sales, which were made using Walker's account, her attorney, Mark Ticer, said.

He noted a correlation between the spike in sales from 2007 to 2010 and the affair.

"Ms. Walker had no idea it was going on at all. She was in the perfect spot to be vulnerable after the horrible accident," he said.

In 2010, Walker wanted to return the haul of luxury goods to the store, which is known for its generous return policy.

Neiman Marcus sent employees to look at the merchandise Walker had requested to return, but the store never followed through or offered an explanation for not taking the items back, Ticer said.

Neiman Marcus declined ABC News' request and that of ABC affiliate WFAA for comment and cited the ongoing litigation.

The bonanza of luxury goods, from $285 pajamas to crystal sculptures and enough jewelry to fill a store's display case, now sits unused in storage. Much of it isn't even Walker's taste, Ticer said.

Walker spent $100,000 per year before her accident at the retailer. Her husband's spending on her account outpaced her spending by hundreds of thousands of dollars, Ticer said.

Still unaware of her husband's affair with Favi Lo, Walker closed her account in 2010. She learned of her husband's relationship with Lo a few months later while engaged in divorce proceedings, Ticer said.

For Walker, the lawsuit is about more than just getting her money back.

"The real villain in this case is Neiman Marcus," Ticer said. "After learning of this affair decided they weren't going to do anything about it."

Ticer said Lo was not disciplined and continues to work at the retailer's NorthPark Mall location. An attempt to reach her for comment was unsuccessful.

"It's a sad story about breach of trust and profits over people," Ticer said. "And Neiman Marcus isn't taking responsibility."

The upscale chain's return policy is: " If for any reason you are not satisfied, we will gladly accept your timely return of unworn, unwashed, or defective merchandise. Returned merchandise should include the vendor packaging and tags and be in the same condition as when it was received. Used merchandise cannot be returned unless defective. A pickup and/or restock fee may apply."

Copyright 2012 ABC News Radio

Does Five Wives Vodka Offend Mormons?

Ogden's Own Distillery(BOISE, Idaho) -- The deputy director of Idaho’s State Liquor Division says that a new vodka called Five Wives is offensive, without specifying to whom. In a letter, Howard Wasserstein calls it “offensive to a prominent segment of our population.” He has forbidden its sale in state-owned stores.

Idaho’s population is 27 percent Mormon, according to the U.S. Census.

Steve Conlin, head of marketing for Ogden’s Own Distillery, maker of Five Wives, declares himself stunned by Idaho’s decision.

Five Wives, he says, is approved for sale in Utah, where there is also a large population of Mormons. Moreover, Idaho allows the sale of alcoholic beverages whose names might cause greater offense. These include Polygamy Porter, made by Wasach Beers in Park City, Utah. Its tagline: "Why just have one?"

Conlin says the name Five Wives was picked not as a reference to polygamy but as a simple celebration of Western history: The first wagon train to Utah contained, he says, 66 men and 5 women. As to how many men the five were married to, he professes not to know.

Jeff Anderson, administrator for the Idaho State Liquor Division, says no objections by his state’s Mormon community played any role in his agency’s decision. He says a team of professional screeners decides the fate of every brand of liquor that tries to get itself stocked in Idaho’s state-run stores.

In the case of Five Wives, he says, those screeners found the product wanting: The liquor was “an average product trying to get a premium price.” The state already offers, says Anderson, 106 other vodkas in Five Wives’ $21.95 price range. There was not room for another.

It’s true, he says, that some people found the brand offensive -- but they were not Mormons. They were female screeners on his staff.

The Five Wives depicted on the label, they found, upon historical discovery, were not wives. They were sisters: the Barrison Sisters, a vaudeville troupe of dancers whose appeal was that they titilated by asking if audiences would like to see their female organs. They then would lift their skirts, revealing pussycats attached, says Anderson, “around their genitals.”

ABC News contacted Steve Conlin a second time, to impart this information.

“That’s a new one,” said Conlin. “We had not been aware of the history of the photo. Very interesting. The plot thickens, for sure.”

He phoned back a few minutes later to add: “I’m not sure this changes our position. To us it’s just an image. We love the fact that there was a mystery to where it came from. And so what? They’re cats.”

Copyright 2012 ABC News Radio

Investor Anxieties over Europe Push Stocks Lower

iStockphoto/Thinkstock(NEW YORK) -- Wednesday was a rough day for the markets with new worries about Europe's financial problems pushing stocks into negative territory.
 
The Dow lost 160.83 points Wednesday to 12,219.86.
The Nasdaq gave up 33.63 points, closing at 2,837.36. The S&P closed down at 1,313.32 -- a loss of 19.10 points for the trading session.
 
The European Commission says confidence across the continent has fallen sharply this month, particularly in Spain, where bank deposits have dropped significantly.

Facebook stock took another hit Wednesday. The tech company’s stock closed at $28.19, a new post-IPO low. The stock is down nearly 12 percent in the two trading days this week.  It’s down nearly 26 percent from the IPO price of $38. Mark Zuckerberg is about $5 billion poorer than he was the day the stock went public.

Meanwhile, oil closed at $87.82 in New York trading Wednesday, the lowest close since October last year. There may be a slight silver lining, though, as gas prices will also be lower this summer freeing up some extra cash for consumers.  That said, if job and GDP growth truly stall, any positive effects of low gas prices won’t matter.
 
As for American job growth, the Labor Department says the jobless rate fell in almost all large U.S. cities in April, aided by summer hiring on farms and in tourist destinations.
 
Copyright 2012 ABC News Radio

401(k) Fees May Cut 30 Percent from Retirement Balance

iStockphoto/Thinkstock(NEW YORK) -- American workers who don’t think twice about their employer-sponsored 401(k) plans may be surprised to learn that fees can cut their retirement savings by 30 percent over a lifetime.

A household with two people earning the median income of their age group from 25 to 65 will pay an average of $154,794 in 401(k) fees and lost returns, according to a report from progressive, non-partisan public policy research group Demos, based in New York.

The $154,794 is 30.3 percent of that household’s retirement balance of $509,644 that is lost to fees.

The median 401(k) balance was a scant $23,000 at the end of the first quarter this year among Fidelity Investments’ 11.8 million accounts.

The higher your income, the greater the absolute value you pay in fees.

A dual-earning household in which each partner earns an income greater than three-quarters of Americans each year over their lifetime can expect to pay as much as $277,969.

Robert Hiltonsmith, policy analyst at Demos, said the most surprising finding was how much of a retirement balance can be lost to fees.

“I knew it was going to be a lot. I didn’t realize it was going to be more than 30 percent of what your retirement nest egg would have been,” he said.

The mutual fund industry provides a different picture.

The Investment Company Institute, a fund industry trade group, said the average person pays $248 a year in 401(k) fees, according to a study last year. The Los Angeles Times reports that would cost the average dual-income household under $20,000 while working over four decades.

But Hiltonsmith said the institute does not take into account trading fees, which represent nearly half of fees paid in Demos’ calculations.

Second, the household in our model is able to make consistent -- and increasing -- contributions each year, and never withdraws or cashes out their balance due to a life trauma or shock, Hiltonsmith said.

“Most households, however, don’t have the economic or job security for this to be the case, and aren’t able to do one or both of these things,” he said.

Hiltonsmith said the institute uses the median retirement balance, which is low because of the economic realities faced by most households trying to save for retirement.

The 30.3 percent figure that Demos discovered doesn’t vary based on household contributions or balances.

“And that percentage bite is, I think, the number to focus on,” Hiltonsmith said.

Workers with 401(k) funds can act to minimize the fees for their accounts in at least three steps:

1. Workers should learn what their fund’s expense-ratio is.

An expense ratio is a mutual fund’s fixed costs, such as administrative and marketing fees divided by the total assets of the mutual fund.

In the 401(k) funds available to Demos employees, the expense-ratios range from 0.70 to 1.3.

You can find most fund’s expense-ratios and compare funds on sites like Morningstar.com and Brightscope.com.  Starting July 1, 401(k) providers will be required to disclose fees and expenses according to a rule first approved by the Employee Benefits Security Administration’s rule in October 2010.

Higher fees do not guarantee a higher return.

2. You can ask a financial advisor about shifting their money into lower-cost funds.

Actively-traded funds, which aim to maximize returns by rapidly buying and selling assets, incur much higher trading costs than passive funds, such as index funds. The latter invests in a set diversified portfolio or in a fixed mix of assets.

3. Workers can ask their employer about having lower-cost 401(k) options available or switching providers.

Elisabeth Leamy, ABC News’ consumer correspondent, said that if banding together with your co-workers and pushing for better choices still fails, workers should make the minimum contribution to get the company match and put the rest of your savings into a low-fee IRA.

“I think the major point that we want a lot of people to take away from this is that these high fees in the system are part of the greater shifting of retirement risks and costs that have happened in the past 30 years,” Hiltonsmith said. “They shifted from the shared responsibility of employers and employees to solely on the backs of employees.”

Hiltonsmith said 401(k) funds should not be the primary place to supplement a worker’s Social Security benefits.

“The system isn’t suitable to be the main place for workers to save for retirement,” he said of 401(k) funds. “It’s not safe and it’s not low cost.”

Copyright 2012 ABC News Radio

Obama Signs Export-Import Bank Reauthorization

File. Official White House Photo by Pete Souza(WASHINGTON) -- President Obama signed legislation Wednesday to reauthorize the Export-Import Bank, saying the bill will help boost U.S. exports and create jobs here at home.

Hitting on campaign themes, the president hailed the bill as important to building a strong middle class and "the kind of economy where everybody is getting a fair shot and everybody is doing their fair share, and everybody is playing by the same rules."

"Part of building that broad-based economy with a strong middle class is making sure that we’re not just known as a nation that consumes.  We’ve got to be a nation that produces, a nation that sells," Obama said at a White House signing ceremony. "Our middle class was created by workers who made and sold the best products in the world.  Our communities and our economy have always done better when we shipped more goods than anybody else, stamped with that phrase: ‘Made in America.’ And I want us to be that nation again."

The Export-Import Bank aids U.S. exporters by providing financial assistance to foreign entities that purchase American-made goods. The bill that was signed Wednesday extends the institution’s mandate through September 2014 and raises its financing cap to $140 billion from the current $100 billion.

The president praised lawmakers for passing the legislation, but made clear "we’ve got more work to do."  

Obama went on to urge Congress to act on his legislative "to-do list" to grow the economy, arguing "we shouldn’t have to wait until an election to do some of this business."

"I hope this ends up being a model for the kind of progress that we can make in the months to come and the years to come," he said of the Export-Import Bank reauthorization.

Copyright 2012 ABC News Radio

Zynga CEO and the Value of 'Boring Conference Calls'

Zynga(LOS ANGELES) -- Zynga, maker of such popular social games as Words With Friends and Farmville, has seen lots of growth with its mobile games, but the CEO of the company, Mark Pincus, isn’t worried about the disappearance of the PC.

“I think Facebook will be important on the Web and the PC, and it has the potential to be important for us on mobile,” Pincus said at the All Things D conference in Los Angeles. “But let’s not forget the opportunity on PCs. A lot of the traffic happens when people are at work on boring conference calls.”  Most of Zynga’s traffic, Pincus said, occurs during work hours while players are on their computers and logged into Facebook.

Still, Pincus and Zynga remain focused on mobile. It just hasn’t become the main revenue driver yet.

“Mobile lets you put play in your cab or on the train. And it’s growing very quickly. But in mobile we’re still at an early stage where we’re building audience,” Pincus said on stage. “Our games are monetizing well in that space, but the audience is still small and growing. It’s going to take a while for the aggregate revenues to get where we want them.”

Zynga most of its money through sales of virtual goods — those poker chips or farm animals you can purchase while playing its games.

Pincus spoke about the recent acquisition of Draw Something and said it was too early to tell if it was a successful purchase.

He did make one thing clear: The company doesn’t plan to get into the hardware business. When asked by interviewer Kara Swisher if the company would get into gaming consoles, Pincus answered in one word: “no.”

Copyright 2012 ABC News Radio

Did Mark Zuckerberg Stiff His Italian Waiter?

Justin Sullivan/Getty Images(NEW YORK) -- Facebook’s newlywed and newly minted billionaire founder Mark Zuckerberg is being criticized after he reportedly skipped out on paying gratuity not once, but twice after dining out with his wife on the couple’s Italian honeymoon.

Still, tipping waiters or waitresses is not customary in European restaurants because the wait staff typically earn a salary, and therefore do not depend on tips unlike U.S. wait staff. Because Americans are generally used to tipping when dining out, they tend to also do so abroad – earning a reputation as generous tippers by local Italian restaurateurs.

“It's far more likely that he knows the deal than is just being a cheapskate,” Genevieve Shaw-Brown, ABC's Travel & Lifestyle Editor, said. “Certainly he has no reason to be a cheapskate. He has plenty of money, and I think we would have heard of him not tipping in the U.S. before we would have heard of him not tipping abroad – so it's pretty likely that he knows the deal.”

So as it turns out, Zuckerberg may have just been following the old adage "when in Rome."

That said, Shaw-Brown says Zuckerberg still could have plunked down a few bucks, especially since it's estimated that the Harvard drop out made an estimated $20 billion when Facebook went public this month.

“It's really interesting that these things sort of get called out,” she said. “For him, it probably would have made sense to leave the tip, just to avoid this little bit of bad press.”

Zuckerberg and new bride Priscilla Chan married the weekend following Facebook’s May 17 initial public offering in a backyard ceremony that also celebrated Chan’s medical school graduation.

Ironically, the first images from the pair’s honeymoon surfaced on Twitter, not Facebook.

Copyright 2012 ABC News Radio

Cheapest and Most Expensive Weekends for Summer Travel

John Foxx/Thinkstock(NEW YORK) -- Hotel prices are up.  Airfare is up.  So how can you beat higher prices and still travel this summer?

It's simple: just know when and when not to fly.

Online travel agency Travelocity analyzed two years of booking data for ABC News to find out which weekends were the cheapest -- and most expensive -- to fly.

The most expensive weekend of the summer to travel is coming up on June 1-3, likely due to Memorial Day weekend travelers who turned the extra day off into a longer vacation, said Courtney Scott, senior editor for Travelocity.

"Many travelers take advantage of their three-day Memorial Day weekend and turn it into an extended vacation, making this week into next weekend popular travel periods, which could account for a rise in fares," she said.

The average round-trip airfare for both domestic and international flights is $661 for the upcoming weekend, $63 higher than the cheapest weekend of the summer to fly: August 24-26.

That's good news for travelers who haven't booked summer vacations yet.  The weekend before Labor Day weekend, which this year falls on August 24-26, is historically the cheapest of the summer for airfare, at $598 round-trip.

"There's a dip in prices in late August as kids are busy getting ready to go back to school and many schools in the South are already in session.  Labor Day we'll see a spike in fares again as families work in one more getaway before the school season is in full swing," said Scott.

So what about those families who can't travel on August 24-26?  There are still some weekends that are better than others.  The cheapest weekend in June is 22-24 and the cheapest in July is 20-22.

Not surprisingly, the weekends sandwiching the Fourth of July -- a Wednesday this year -- are some of the priciest of the summer. 

Copyright 2012 ABC News Radio

KFC Releases Free Col. Sanders Autobiography, Cookbook

KFC(NEW YORK) -- If you were hoping to snag the recipe for the Colonel’s secret blend of spices, you’re not going to find it in his latest cookbook.

Colonel Sanders, the face of Kentucky Fried Chicken, has a cookbook and autobiography that will be released June 4 on Facebook. Facebook users that “like” the KFC page will be able to download the online book for free.  Viewers can get a sneak peak of the book before its release on the site.

In November, KFC announced that they had found the autobiography in their archives.  Although the book is only available for online printing, they will be offering 11 hard copies of the book to Facebook fans.

“This book, written in 1966, is about a man’s life and the food he’s cooked, eaten and served. That man is me. The food I’ve liked, the work I’ve done and the way I think are all the same things. It’s not such a farfetched idea. A lot of learned men think people really are the food they’ve eaten,” Sanders writes in the intro.

Harlan Sanders died in 1980.

Even without the spice blend recipe, the Colonel’s recipes sound pretty good.

“But there will be cornbread stuffing, light bread, hot biscuits with honey butter, chicken pot pie, hushpuppies, fried tomatoes, potato pancakes, pecan pie (and the flaky crust that goes with it), baked apple dumplings and a whole lot of other just plain American country cooking.”

The Colonel’s upside down peach cobbler and potato pancake recipe from the book are currently available on the Facebook page.

Copyright 2012 ABC News Radio