Fisker reveals plans for Wilmington plant

[Drew Dowdell]

Fisker unveils Boxwood plans
Via Delaware Online

Fisker Automotive could create as many as 2,500 jobs in the next five years as it renovates and reopens the Boxwood Road plant near Newport to build plug-in hybrid electric cars.

The startup automaker announced its plans this morning at an event at the former General Motors factory, with officials including Vice President Joe Biden and Gov. Jack Markell in attendance.

Irvine, Calif.-based Fisker plans to use some of the proceeds from a $528 million U.S. government loan at the Boxwood plant, idle since July when General Motors ended production there. Fisker signed a letter of intent with Motors Liquidation Co. to purchase the plant for $18 million. Motor Liquidation is the legal entity disposing of unwanted GM assets in bankruptcy court.

The company expects to spend at least $175 million revamping the Boxwood plant to build a family-oriented sedan under development. Production would not begin again at the 62-year-old factory until 2012.

Fisker’s first car, the Karma, a luxury sedan with a starting price of $87,900, is being built in Finland by contract automaker Valmet Automotive. The company’s next car -- known as “Project Nina” -- will be a family sedan that’s expected to sell for about $40,000 after a $7,500 federal tax credit.

Fisker predicts Project Nina will ultimately create or support 2,000 factory jobs and more than 3,000 vendor and supplier jobs by 2014, as production ramps up to full capacity of 75,000-100,000 vehicles per year.

The company expects to eventually make both models at the Boxwood plant.

Boxwood was selected for its size, production capacity, world-class paint facilities, access to shipping ports, rail lines and available skilled workforce, officials said.

“This is a major step toward establishing America as a leader of advanced vehicle technology,” said Fisker CEO, Henrik Fisker, in a statement. “Wilmington is perfect for
high quality, low volume production and will soon be the proud builder of world-class, fuel-efficient Fisker plug-in hybrids.”

Fisker plans to spend $175 million to refurbish and retool the factory over the next three years.

The company will be able to tap into a regional work force of experienced auto workers who were displaced after the closure of the Boxwood plant and Chrysler’s Newark assembly plant last December. Fisker is in talks with United Auto Workers union officials and expects to employ UAW members at the Boxwood factory.

To lure Fisker, Delaware officials offered the company a 5-year, $12.5 million loan at zero interest to make improvements to the plant’s structure, including a new facade and new plumbing, ventilation and lighting systems. If the plant employs 2,500 workers and Fisker has spent at least $175 million renovating the facility after five years, the loan would convert to a grant.

The state has also offered Fisker a $9 million grant to offset utility costs at the plant. New Castle County has offered to abate property taxes at the plant for five years, an incentive worth an expected total of $1.3 million.

[Oracle of Delphi]

See Wilmington, I told you to keep the faith. Death sentence commuted to a life that will allow you to build at least a 100K cars per year. You are all great people in my book. Something tells me we will meet again in the not to distant future ... I look forward to that day ...

[daves87rs]

Cool! Glad to see the plant working again...

[Blake Noble]

Mr. Fisker, I'd like to buy you a nice cold one. Here's to you!

[mustang84]

I'm quite excited about Fisker Automotive. In an era when domestic automakers are no longer dominant and brands are being dropped like birdseed, I'm glad to see an innovative American startup forging ahead with its own vision. In some ways, I wonder if we could see a mini-repeat of the early 20th century with new startups vying to develop and perfect electric vehicle technology.

[Intrepidation]

Mr. Fisker, I'd like to buy you a nice cold one. Here's to you!

Buy one of his cars and he'd appreciate more I bet.

[Camino LS6]

In some ways, I wonder if we could see a mini-repeat of the early 20th century with new startups vying to develop and perfect electric vehicle technology.

I think we already are...

[BigPontiac]

I think we already are...

Like in the old days...

[aldw]

I know that there are some critics who would like to see Fisker fall just because they're working with the UAW, but Fisker does have good ideas worth making successful, so they do deserve support.

[balthazar]

I, too, hope to see a new American manufacturer become successful.... but 75K - 100K yearly of a $48,000 'family sedan' ???

I hope for the company's sake the rest of the planning is far more realistic.

BTW; Columbia ^ lasted a half-decent 15 years; it died off after joining a 5-party conglomerate that went belly-up in 1913.

Edited November 28, 2009 by balthazar

[Satty]

75,000+/year worldwide should be within reach if the car isn't an absolute bitch as a daily driver. Remember all those people paying over sticker for the Prius? Or the people who think its fantastic that the compact Volt will be $40k? They're going to be Fisker's target.

[Oracle of Delphi]

I see Fisker being bought by GM at a future date ...

[balthazar]

>>"75,000+/year worldwide should be within reach if the car isn't an absolute bitch as a daily driver. Remember all those people paying over sticker for the Prius? Or the people who think its fantastic that the compact Volt will be $40k? They're going to be Fisker's target."<<

Point out a post where someone expressed it was "fantastic" a Volt is allegedly going to be $40K ??? Everything I've read here & elsewhere has damned that number. Here's a car that's $9K more (w/ tax), and suddenly we're thinking 100K volume is do-able? Volt should be looking at 300K unit sales then. And I obviously missed where exporting & worldwide distribution was part of Fisker's immediate plans; I interpreted 100K to be U.S. sales only. Do they have overseas dealers set-up, or would it be manufactured under license abroad?

It just sounds VERY optimistic, IMO...

[Satty]

Fisker already has a European network set up for the Karma, I assume they'll utilize that when the new, less expensive model comes out.

[CSpec]

Oh boy, more government handouts.

[Drew Dowdell]

Please 'splain Lucy. How does a loan equal a government handout?

[CSpec]

Please 'splain Lucy. How does a loan equal a government handout?

Opportunity cost of capital. Even if the government "profits" on this loan, that same money almost surely would have created more value in the hands of private profit maximizing entities.

[Imaj]

And as I understand they'll be using GM engines.

It is really hard for me to choose between the Karma and Model S, they are both gorgeous.

I wish Fisker all the best.

[CaddyXLR-V]

>>"75,000+/year worldwide should be within reach if the car isn't an absolute bitch as a daily driver. Remember all those people paying over sticker for the Prius? Or the people who think its fantastic that the compact Volt will be $40k? They're going to be Fisker's target."<<

Point out a post where someone expressed it was "fantastic" a Volt is allegedly going to be $40K ??? Everything I've read here & elsewhere has damned that number. Here's a car that's $9K more (w/ tax), and suddenly we're thinking 100K volume is do-able? Volt should be looking at 300K unit sales then. And I obviously missed where exporting & worldwide distribution was part of Fisker's immediate plans; I interpreted 100K to be U.S. sales only. Do they have overseas dealers set-up, or would it be manufactured under license abroad?

It just sounds VERY optimistic, IMO...

It does seem very optimistic. If they could get the price down to the mid $30s I could see them reaching it. But it is a much better car compared to the Volt. It is projected to go 50 miles on electric power, the Volt will probably come in under 30, and it is supposed to go 0-60 in around 6 seconds, compared to 10 for the Volt.

Just imagine if the Volt was badged as a Cadillac, had a 0-60 time of 6 seconds, and went 50 miles on battery power alone. I doubt anyone here would be damning a price of $48,000.

[A Horse With No Name]

Oh boy, more government handouts.

I'd rather blow it here than elsewhere.

I have no trouble at all with this...think its a damned fine idea in fact.

Chris

[A Horse With No Name]

It does seem very optimistic. If they could get the price down to the mid $30s I could see them reaching it. But it is a much better car compared to the Volt. It is projected to go 50 miles on electric power, the Volt will probably come in under 30, and it is supposed to go 0-60 in around 6 seconds, compared to 10 for the Volt.

Just imagine if the Volt was badged as a Cadillac, had a 0-60 time of 6 seconds, and went 50 miles on battery power alone. I doubt anyone here would be damning a price of $48,000.

Here is a thought...look at pics and read articles about cars built about say 1905. then jump ahead 30 years to 1935. Order of magnitude of change, yes?

Do the same, 35 to 65, 65 to 95...

95 beginning of OBD 2 and the modern era as it were...

Give it another 30 years. Cars will be VERY different!

Chris

[aldw]

Opportunity cost of capital. Even if the government "profits" on this loan, that same money almost surely would have created more value in the hands of private profit maximizing entities.

Free market ideologues simply can't see the shortcomings of their ideology all too often, unfortunately...

Edited December 21, 2009 by aldw

[Drew Dowdell]

Opportunity cost of capital. Even if the government "profits" on this loan, that same money almost surely would have created more value in the hands of private profit maximizing entities.

Profit maximizing entities like Citigroup for example? Or perhaps one of the many companies that is expecting tax breaks for off shoring labor.

This deal isn't a handout. Handout implies the government isn't getting the money back. Again, this is a loan.

Since you're so worried about money being in the hands of private entities, that's exactly what the government did. It loaned money to a private entity it thought was both a good investment financially and boosted a fledgling industry it sees as a good cause. Venture capital has all but dried up.