Officially Official: Fisker buys GM's Wilmington Delaware plant
by Sam Abuelsamid on Oct 27th 2009 at 11:50AM 
In Wilmington, Delaware this morning, Governor Jack Markell was joined by Vice President Joe Biden and Henrik Fisker for the official announcement about the purchase of General Motors' closed plant there. Fisker will re-tool the plant to build a new, more affordable plug-in hybrid sedan to slot in below its more luxurious Karma. The goal is to have the model sell for under $40,000 after federal tax credits.
The current schedule is to have the car in production by the end of 2012 with volumes getting up to 75,000-100,000 units annually by 2014. Fisker has moved up its development schedule for what they are calling Project Nina thanks to the $528 million low cost loan it recently received courtesy of the Department of Energy. During the announcement, Fisker stated that he wants to export half of the production from the plant while creating 5,000 jobs in the U.S. (2,000 at the plant and 3,000 at suppliers). The local UAW president was also on hand, so it looks like the plant will remain unionized, which is very unusual for a startup auto plant.
Fisker is paying $18 million for the factory from Motors Liquidation which is the remainder of "Old GM" which is selling off assets from bankruptcy court. The plant most recently produced the Pontiac Solstice and Saturn Sky, both of which ended production last spring.
Gallery: Fisker Karma
[Source: Fisker Automotive]
PRESS RELEASE:
Fisker Automotive to Buy U.S. Assembly Plant to Build Affordable Plug-in Hybrid Cars
WILMINGTON, Del., Oct. 27 /PRNewswire/ -- Fisker Automotive has selected the Wilmington Assembly plant in Wilmington Delaware to build affordable plug-in hybrid cars.
Fisker executives made the announcement inside the dormant facility today, joined by Vice President Joe Biden, Delaware Governor Jack Markell and other state officials.
The plant will support Fisker Automotive's Project NINA, the development and build of an affordable, family-oriented plug-in hybrid sedan costing about $39,900 after federal tax credits.
Production is scheduled to begin in late 2012. Fisker Automotive anticipates 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. More than half will be exported, the largest percentage of any domestic manufacturer.
The modernized Wilmington Assembly plant was selected for its size, production capacity, world-class paint facilities, access to shipping ports, rail lines and available skilled workforce.
"This is a major step toward establishing America as a leader of advanced vehicle technology," said Henrik Fisker, CEO. "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 Automotive has signed a letter of intent with Motors Liquidation Co. (MLC), formerly known as General Motors Corp. to purchase the Wilmington plant for $18 million after a routine four-month evaluation period.
An additional $175 million will be spent to refurbish and retool the factory over the next three years.
Funds will come from a conditional loan of $528.7M the Department of Energy awarded the company in September.
The loan is part of the $25B Advanced Technology Vehicle Manufacturing loan program (ATVM) appropriated by Congress in 2007 to help the United States lead in the development and manufacturing of advanced technology vehicles.
The company's first car, the Fisker Karma, will be the world's first production plug-in hybrid when it goes on sale this summer at retailers in the U.S. and Europe.
Fisker plug-in hybrid cars will help remove the country's dependence on foreign energy by eliminating the need for 42 million barrels of oil by 2016. They will also offset 8 million tons of carbon dioxide emissions.
"With our close-knit business, government, and educational communities and our potential to respond rapidly to new opportunities, today's announcement is a testament to what works best in Delaware. Fisker is a perfect partner in shaping Delaware's economic future, and we are thrilled that the vehicle that can reshape the automobile industry will be built here in Delaware, by Delaware workers." said Governor Jack Markell (D-Delaware).
Gary Casteel, UAW director responsible for the plant, said, "It gives me great pride to give UAW Local 435 workers the opportunity to partner with Fisker Automotive to create a greener America by building a plug-in hybrid car that will compete globally."
ABOUT FISKER AUTOMOTIVE, INC.
Fisker Automotive is a privately owned, premium American car company with a vision to lead the automotive industry into the next-generation of automobiles with high-end design expertise and eco-friendly powertrain technology. Global headquarters are in Irvine, California, USA.
The company was created in 2007 to leverage the design capabilities of Fisker Coachbuild, LLC, founded by auto design veterans Henrik Fisker and Bernhard Koehler, and the PHEV powertrain capabilities of Quantum Fuel Systems Technologies Worldwide, Inc. (NASDAQ:QTWW) , a major Tier 1 supplier of clean vehicle technologies to the automotive OEMs. Previously, Fisker, CEO, was design director for Aston Martin and president and CEO of BMW's DesignworksUSA. Koehler, COO, led operations for Ford's Global Advanced Design Studio and created concept cars for Aston Martin, MINI and BMW.
ABOUT WILMINGTON ASSEMBLY
Reader Comments (Page 1 of 2)
Serge 12:18PM (10/27/2009)
So what's going to happen at the plant between now and 2012? Karma assembly perhaps?
Fisker is certainly aggressive with their plans. If they are starting production in 2012 we better see some pictures of NINA soon.
Reply
Boyprodigy1 12:26PM (10/27/2009)
And today is yet another victory for the world of plug in electrics!
Reply
Nick From Montreal 12:32PM (10/27/2009)
Hopefully Fisker can prove that unions are not the cause of GM's problems. When union and management are working toward the same goal, good things can happen. This sure is unusual, but I hope they can make it work.
This is getting more interesting by the minute...
Reply
Julius 12:42PM (10/27/2009)
Now the question will be:
As the Karma is slated to be built in Finland, the only product for the Wilmington plant is the still-to-be-designed Nina. If the Nina is to be built there, what's the market for $40k plug-in electrics? Will the volume be enough to justify the purchase of the plant (especially since the sales of $25k roadsters wasn't enough to justify keeping the plant in the first place)?
Reply
wincros 2:52PM (10/27/2009)
About the same as the market for the Volt I would say.
Dave 1:14PM (10/27/2009)
Fisker seems like a smart guy. He knows that people want:
1. A beautiful car.
2. A powerful car.
3. Sporty handling. (No heavy battery pack)
4. Freedom (unlimited range)
5. A huge tax deduction.
6. A conversation piece.
The question is, can he deliver those things at a lower price than the Karma's?
Reply
sean lawrence 1:37PM (10/27/2009)
Some information on the loan:
"The agency loan is in two stages, with the first $169.3 million to be used for what Mr. Fisker called “final testing and certification” of the Karma at the company’s Pontiac, Mich., plant (with support from company headquarters in Irvine, Calif.). The second stage, $359.36 million, is to gear up for manufacture of the Nina in the United States.
An Energy Department spokeswoman, who asked not to be identified, said in an interview that Fisker’s “two projects seemed to be worth the risk of the loan,” because they would create “a large number of jobs in America.” She said that Fisker had “marks it needs to hit before we commit to the loan. When the conditions are met, the loan goes out the door.”"
Source: http://wheels.blogs.nytimes.com/2009/09/24/fisker-to-receive-5287-million-federal-loan/
From the WSJ:
"He said he pitched the Karma to Mr. Gore at an event hosted by KPCB last year, and that the former vice president almost immediately submitted a down payment for the car...
Fisker's top investors include Kleiner Perkins Caufield & Byers, a veteran Silicon Valley venture-capital firm of which Gore is a partner. Employees of KPCB have donated more than $2.2 million to political campaigns, mostly for Democrats, including President Barack Obama and Hillary Clinton, according to the Center for Responsive Politics, a nonpartisan group that tracks campaign contributions....
Fisker's government loans will come from a $25 billion program established by Congress in 2007 to help auto makers invest in the technology to meet a new congressional mandate to improve fuel efficiency. "
source: http://online.wsj.com/article/SB125383160812639013.html
The nina's target pricetag is $48K before tax incentives (projected to be $40 after tax incentives). I can find no information that mentions this is a secured loan.
While Fisker actually has the capacity to build cars, unlike Tesla, they lack marketing and distribution. When the economy turns around, they will be swallowed up by the big players or die. Just more government pork at taxpayer expense to build yuppymobiles.
Reply
letstakeawalk 1:51PM (10/27/2009)
"While Fisker actually has the capacity to build cars, unlike Tesla, they lack marketing and distribution.
Fisker hasn't done much national advertising, but they've gotten very good press for the past couple years. I'm sure that it will ramp up soon enough...
As far as distribution, they're way ahead of Tesla. Here's their dealer roster:
http://karma.fiskerautomotive.com/files/Fisker-Charter-Retailer-List.pdf
sean lawrence 2:51PM (10/27/2009)
OK, I understand you like Fisker. I like Fisker, nice looking, sporty!
But what you don't seem to realize is that it will take thousands and thousands of cars to pay us, the taxpayers, back. To sell this number of cars requires dealer networks, support networks, marketing and public awareness.
What happened to Daihatsu, Isusu, or Citroen, or Fiat, or Renault or any of the other major car companies that have tried to sell mainstream cars on our shores? It takes a huge amount of money and expertise to do it. Ford, Toyota, Fisker??? I don't think so. Panos, Lotus, Fisker??? That sounds more reasonable.
Like I said, I like Fisker. I like the car. But why should I be forced to subsidise a play toy for the affluent? That is not fair. The Bush administration created this fund, and it should be used to minimize our use of foreign oil by developing technologies, not making yuppiemobiles. It is just our politicians acting like royalty giving away OUR money.
letstakeawalk 3:02PM (10/27/2009)
"But what you don't seem to realize is that it will take thousands and thousands of cars to pay us, the taxpayers, back. To sell this number of cars requires dealer networks, support networks, marketing and public awareness."
Yes, I do understand this. But in order to sell "thousands and thousands", Fisker has to be able to build thousands and thousands. They're not shooting too high, just 75-100K a year - and half of that amount will be sold around the world.
I've already pointed out the the dealer/support network is already being built, and there's still several months before the cars will actually be delivered.
"But why should I be forced to subsidise a play toy for the affluent?" Oh, go cry yourself to sleep wondering that one - life isn't fair. Why should I pay to educate you or your kids? Because both loans (to automakers and to college kids) benefit society as a whole, that's why.
Mark Kiernan 3:12PM (10/27/2009)
This Al Gore stuff is getting borning
sean lawrence 3:46PM (10/27/2009)
letstakeawalk, letswakeup and smell the coffee.
You are ignoring the facts. It is one thing to say that they are going to have these things. It is another to have them. Let me repeat. The other car companies that I mentioned, Daihatsu, Isuzu, Renault. They are big, had dealerships and support and failed. And you want to beleive that Fisker, will succeed. And with niche vehicles.! Well, it's a nice dream- go for it.
Let's look at Tesla. How many cars have they shipped? Less than 1,000? And they don't actually make their cars, they install powertrains and wire battery packs. No doubt they're making money! Oh wait, they aren't. But Daimler Benz invested in them, they must be good. Daimler Benz, the company that gutted Chrysler, also sells cars under the Maybach name. A luxury brand that died out years ago. So when Tesla folds, Mercedes will exercise its options and have their own electric brand. Cheap.
And my kids, who are both in engineering schools, will be productive tax paying members of society and will pay far more than they have ever received. Fisker, who isn't scheduled to actually produce a car until at least 2012 in Delaware, announces that the GM factory will reopen and those laid-off union workers will have jobs which benefits Biden's candidates in his home state. Works for me!
letstakeawalk 4:12PM (10/27/2009)
"The other car companies that I mentioned, Daihatsu, Isuzu, Renault..." built garbage. Enough said. They failed because they built miserable cars. I'm not a particular fan of Tesla (pure BEV will be a niche in my opinion), but they have proven that their business plan works. It would be a shame if Daimler gutted them, and I haven't heard anyone suggest that is Daimler's plan. It seems they just wanted a proven supplier of technology and batteries...
I'm glad your kids will be productive member of society. That's the benefit of their tax-payer paid education. Most of us are hopeful that Fisker will also become a productive member of US industry. Fisker too can potentially give back more than the half-billion it is set to receive. That risk is worth the loan. Just like it was worth the risk to educate your kids...
Boyprodigy1 4:58PM (10/27/2009)
Hey sean,
I am in engineering school right now. I am going to be a tax paying productive citizen of this country too. You can bet that this car is going to be close to the top of my list when I have enough money to buy one (Which you can bet won't take long).
But if Fisker does go belly up (and I think that I have told you this a half a dozen times already) they have investors who will have to pay back the loan. They weren't able to get the loan unless they had the equity to back it. Guess what, they do.
Besides this point, if you really want to cry about subsidizing technology, lets end all of the oil subsidies (in the forms of grants) and we would be able to GRANT this money to Fisker multiple times over again. You're distaste for this company is completely juvenile and unwarranted.
sean lawrence 5:52PM (10/27/2009)
"But if Fisker does go belly up (and I think that I have told you this a half a dozen times already) they have investors who will have to pay back the loan. They weren't able to get the loan unless they had the equity to back it. Guess what, they do. "
Yes, You keep saying it, but it still isn't true.
There is no correlation between the number of times that you say it and it being true.
It is kind of like stamping your feet and telling your parents that you will hold your breathe until you turn blue-unless you get your way.- Go for it.
This isn't research, it is merely a car making enterprise.
sean lawrence 6:06PM (10/27/2009)
Boy****
Please, you are embarrassing yourself. Take some business classes. You clearly have no idea how investing works.
Investors will only lose the extent of their investment in the firm. The company assets would be liquidated and after the attourneys are paid, the remaining couple dollars would be recovered by the government. The loan is not secured, this is not a home loan. They couldn't have gotten the financing they need in the private sector.
letstakeawalk 6:20PM (10/27/2009)
Here's the terms of the conditional loans:
http://www.atvmloan.energy.gov/keydocs/fiskerconditionalcom.pdf
The loans are for building a "car making enterprise", specifically, completing the engineering integration work on the Karma, and establishing a manufacturing facility in the US.
The loans are secured per the terms in the agreement, essentially, the DOT would put a lien on everything Fisker has. Section 15 details the Collateral Fisker is putting up.
Boyprodigy1 6:30PM (10/27/2009)
@letstakeawalk
Thanks :)
sean lawrence 6:57PM (10/27/2009)
letstakeawalk,
Thank you! Very well done. I'm impressed. I was looking for this myself.
Now, if Boy***** would read pages 10 and 11. The section under Collateral. You will understand how the loan works. Only the assets will be liquidated, no investors are going to step in and pay back the loan.
And thank you! The loans are for building a "car making enterprise", specifically, completing the engineering integration work on the Karma, and establishing a manufacturing facility in the US."
This is my point, government money should be used for research on new technology, not setting up more car companies. Battery technology, fuel cell technology, etc. Yuppiemobiles- NO!
Boyprodigy1 8:10PM (10/27/2009)
Alright Sean, I'll bight. Lets take a look into your ideal world. You say "government money should be used for research on new technology". Here are the implications of that statement to me. Get rid of the DoD, DOE, NREL, public universities, public libraries, public schools, government contracting, and all of the united states military services. Brilliant plan!
And by the way, you know what liquidating assets does right? It creates money. It would create money out of all of the money that the investors put into the company (i couldn't find a figure but no doubt, hundreds of millions of dollars) + all of the money loaned to the company. The losses (highly unlikely) would be negligible at best. Also if YOU had read pages 9 and 10 you would have seen how they are going to be all over Fisker's ass about keeping their company afloat.