A maker of electric cars plans to use old GM plant in Delaware
Tuesday, October 27, 2009
The White House is expected to announce Tuesday a multimillion-dollar deal that will convert a closed General Motors plant in Wilmington, Del., into a factory making electric vehicles.
Vice President Biden will make the announcement that Fisker Automotive of Irvine, Calif., is expected to invest $175 million to retool the plant.
Fisker, which will pay the old GM $18 million for the facility and equipment, is getting tax incentives from the state of Delaware, although officials there declined Monday to say how much.
Fisker plans to make a car in Delaware that is being developed under the name "Project Nina" after the ship belonging to explorer Christopher Columbus. Russell Datz, a Fisker spokesman, said that the project's name is meant to be "symbolic of the transfer from the old world to the new in terms of auto technology." The car is expected to cost about $39,900 after tax incentives.
The Fisker facility is expected to create 2,000 jobs and will likely be operational by 2011. Administration officials said the deal will indirectly create another 3,000 jobs once the plant is fully operational, expected in 2014. Administration officials say that Fisker expects many of the jobs will go to former GM or Chrysler auto workers.
"While some wanted to write off America's auto industry, we said no," Biden said in a statement to The Washington Post on Monday. "We knew that we needed to do something different -- we knew a new chapter had to be written." He said the deal shows that the administration is strengthening "American manufacturing by investing in innovation."
GM's 60-year-old Delaware plant most recently produced the Saturn Sky, Pontiac Solstice and Opel GT. In July, the plant closed, leaving 1,100 people out of work. That came on top of 700 Chrysler workers who lost jobs in December when a plant about 15 miles away in Newark, Del., closed. The state, hard hit by troubles in the financial industry, has an 8.3 percent unemployment rate.
The Wilmington plant is one of more than 100 GM and Chrysler factories, warehouses and other facilities across the country that are being sold or converted to other uses as part of the automakers' efforts to downsize after their bankruptcies. The administration wants the locations to be used for a range of operations including producing cars and parts for wind turbines or solar panels, or as education centers. But few of the buildings have been converted yet, and many involve complex environmental issues from decades of car production. The Delaware plant is one of the first big facilities to be adapted for auto-related use.
"This is a model of very effective cooperation from the federal, state and local levels, working with the private industry to help transform an economy," Ed Montgomery, executive director of the White House Council on Automotive Communities and Workers, said in an interview. "Hopefully there are going to be other examples where you're going to get a nice marriage that gets these facilities back into productive use."
Fisker said it had been looking for a year for a factory for its electric vehicles. "Given the downsizing of the auto industry, there are a lot available," Datz said. "It's fortunate for us, but unfortunate for the auto industry as a whole."
Fisker, which was started two years ago, recently received a $528 million loan from the Department of Energy and will use some of those funds to make the Delaware plant operational. Fisker is producing another electric vehicle, called the Karma, that is expected to come out in the summer and will cost about $80,400.