October 28,  2009

Purchase of former G.M. plant
is cause for a gala celebration

Delaware renewed its long-standing relationship with the automobile industry in festive fashion as officials including the Vice President of the United States ceremoniously welcomed Fisker Automotive to the state.

The Irvine, Calif.-based firm has signed a letter of intent with the liquidation firm wrapping up the bankruptcy of the former General Motors Corp. to purchase the G.M. assembly plant on Boxwood Road in Christiana Hundred for $18 million. Fisker Automotive has said it will invest an additional $175 million to retool the factory to produce the Nina, a plug-in hybrid sedan it is developing.

Although the plant, which has been idle since June, has not actually changed hands yet and it will be about three years before the first Nina comes off the assembly line, Henrik Fisker, told a cheering crowd estimated to be well over 500 people that the ceremony on Oct. 27 marked the beginning of the manufacturing stage, several months ahead of schedule.

He called it "the most dramatic change in the automotive business since we moved from the horse to the automobile."

While a large portion of the audience consisted of men and women rendered jobless by the plant closure and

the possibility of eventually being hired to work there again obviously loomed large in their minds, Fisker's comments and those by Governor Jack Markel and the state's three-member congressional delegation, served as the audience warm-up for Vice President Biden, who was introduced simply as "our Joe" by Dave Myers, president of  United Auto Workers Local 435,

which represented G.M. workers.

Joe didn't disappoint.

He delivered a spirited oration hailing the plant's relatively quick sale as a prime example of how the Obama administration is "rewriting a

Henrik Fisker, chief executive officer of Fisker Automotive, speaks at the ceremony marking the sale of the former General Motors plant. Behind him are (from the left): United Auto Workers local president Dave Myers, Governor Jack Markell, Senator Ted Kaufman, Vice President Biden, Senator Tom Carper (hidden), Congressman Mike Castle (also hidden) and Ed Montgomery, executive director of the White House Council for Automotive Communities and Workers.

new chapter for our economy." The deal was made possible by a $528.7 million U.S. Department of Energy 'stimulus' loan to Fisker, of which $359 million was directed to the Nina project.

"We're not investing just in a facility; we're investing in a new industry," Biden exclaimed. "It's not a subsidy; it's seed money. ... That's what the Recovery Act is all about."

Fisker has said the project will provide direct employment for about 2,000 people in Delaware by 2014 while supporting another 3,000 jobs with the plant's vendors and suppliers.

Moreover, the firm intends to market the new vehicle worldwide with about half of the production at Boxwood to be exported through the Port of Wilmington. The plant is expected to turn out 75,000 to 100,000 cars a year when it achieves full production capacity.

"We will again lead the world in the manufacture of automobile," Biden said. "It's a bad bet to bet against America."

The Nina is to be mainly powered by an electric motor driven by an easily rechargeable battery which will produce enough energy to cover more than an average day's driving. If it is depleted, fuel-efficient gasoline-powered motor will kick in.

The firm describes the Nina as family-oriented and "affordable." Henrik Fisker confirmed that the car is expected to sell for $39,900. It will be possible, he said, "to still enjoy a beautiful fast car but still get over 100 miles to the gallon."

"We will actually create cars that are desirable to the rest of the world," he said.

Fisker, a native of Denmark, has a worldwide reputation in the field of auto design. His firm, which is privately owned, was founded in 2007.  According to Reuters news service, the firm has a vision to lead the automotive industry into the next generation of automobiles with high-end design expertise and eco-friendly powertrain technology.

Its first product, the hybrid Karma, is scheduled to go on sale in the United Sates and in Europe next summer.

Markel said being able to interest a buyer in the closed plant was the result if Delaware's being "truly a state of neighbors."

When G.M. was approaching bankruptcy "we did everything we could think of to make sure this plant stayed open," the governor said. When that failed, "our people were not done fighting."

Fisker said he was impressed by the cooperation he witnessed as the state supplied information and support for his company's site decision. Markel, Fisker said, assembled officials in his office "faster than I can pull my family together for dinner." The effort was capped, he added, by "a personal call from the Vice President of the United States of America."

Senator Tom Carper noted that the Boxwood Road plant opened in March, 1947 -- "two months after I was born" -- and had been a mainstay in the Delaware economy since then. Actually, the state's association with the industry goes back much further. John J. Raskob, secretary of the Du Pont Co. and resident of Claymont at the time, is credited with have 'saved' the original General Motors by reorganizing it in the 1920s.

As it happened, the Fisker Automotive ceremony took place just three days after the University of Delaware announced acquisition of the former Chrysler automobile plant. The university said it intends to turn that property into a research and industrial site. The Newark plant also was a victim of a corporate bankruptcy.

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