The residents at Boxwood, Stanton, Brandywine Springs and other
surrounding communities may have lost the opportunity to get back
to work at a nearby automobile assembly line.
Many of these residents were among the work force at the General
Motors Boxwood Road plant outside Wilmington, Delaware. The plant
was
closed in July 2009 as part of the GM
bankruptcy orchestrated by the Obama
Administration. The Boxwood plant produced the Pontiac Solstice
and Saturn Sky roadsters. GM shed
the Pontiac and Saturn (as well as Saab and Hummer) nameplates as
part of the company’s bankruptcy reorganization.
Three months after the closing, Vice President Joe Biden visited
the Boxwood plant. He announced $529 million in taxpayer
guaranteed, low-interest Department of Energy loans to the
California-based “green energy” auto manufacturer Fisker
Automotive. In return Fisker would establish a vehicle assembly
operation at the plant in Biden’s home state. Biden promised, “This is
seed money that will return back to the American consumer in
billions and billions and billions of dollars in good new
jobs.”
The vice president was joined by Delaware Governor Jack Markell
(D), U.S. Senator Tom Carper (D) and then-U.S. Representative Mike
Castle (R). About 1,000 United Auto Workers stood in as the
political and literal background for Biden’s announcement. Biden
also
promised that the plant would be turning out 100,000 cars a
year by 2014.
The state of Delaware also
gave a $22 million economic development and utility loan
package to Fisker. The loans would automatically become grants if
Fisker created a
promised 2,495 jobs.
Fisker was founded by Henrik Fisker and Bernhard Koehler, a pair
of senior executives formerly with German automaker BMW.
In July 2010, Fisker Automotive completed the
purchase of the 3.2 million square foot Boxwood plant for $18
million and another $2 million was paid for assembly line equipment
and a modern paint shop. Shortly thereafter, workers began the
process of removing the installed assembly line equipment.
Reportedly, about $18 million of the $22 million in state aid
has already been spent.
Fisker has spent $193 million of the $529 million federal loan
package. That money went to the production of Fisker’s “Karma,” a
luxury, four-passenger sports car with a
base MSRP of $102,000 and costing almost $120,000 with added
options. The Karma is being
built in Finland in limited numbers.
Fisker named its more affordable
passenger vehicle the “Atlantic” — if one believes an
MSRP of about $50,000 is “affordable.” According to a 2012 New
York auto show
report, the Atlantic is similar in styling to the Karma and
also features four-passenger seating, which limits its usefulness
to many American families. Even with tax credits, the car will sell
for a
hefty premium above the price of a typical mid-sized family
automobile.
Unfortunately for the car manufacturer, the Department of
Energy-Fisker money-train appears to have derailed. No additional
money beyond the $193 million has been disbursed to the
green-energy car company since 2011. There have been
hints that Fisker has failed to reach established milestones in
order to trigger additional disbursements. But the blame for the
loan delay,
according to former Fisker chairman Ray Lane, lies with
Republican presidential candidate Mitt Romney.
“The DOE would have negotiated a new draw timeframe by now if it
weren’t for Romney targeting these loans,” he claimed. Lane is a partner with
Silicon Valley-based venture capital firm Kleiner Perkins Caufield & Byers, a
major
investor in Fisker. Lane is also a longtime major donor to both
Republican and Democrat political campaigns.
Fisker Automotive’s financial and milestone concerns were enough
to lead to an
executive shake-up earlier this year. Henrik Fisker was
relieved of duties as chief executive and was moved into the role
of chairman replacing Lane. Fisker was replaced as the car
company’s chief executive by Tom LaSorda, former Chrysler CEO, who
also assumed the duties of vice chairman.
The car maker had
indicated in 2010 the Atlantic would be in full production at
the Boxwood plant by the summer of 2012. To date, the facility has
not been retooled, according to Fisker officials and local area
businesses. Fallout from the loan freeze and production delays has
impacted another green energy company. A123 Systems, a supplier to
Fisker of electric car batteries, has also been affected (“Solyndra
Nation,” The American Spectator, April
2012).
There were about 50 people working at the plant in the beginning
of 2012. Fisker
laid off about half of them early in the year and
most of the rest just weeks ago, leaving a handful in
place.
There were only four cars in the entire complex’s massive
parking lots on the week day we visited the plant late last month.
A man identifying himself as the site manager refused to answer our
questions other than to confirm Fisker Automotive owned the plant
before asking us to leave the property.
Nearby businesses reported seeing significant activity in 2011
as assembly line equipment and scrap metal were removed from the
plant but, the massive facility has appeared to be vacant for the
last several months.
The carmaker has toughened its negotiating position with the
Obama Administration, threatening to move its Atlantic
manufacturing operations elsewhere, including overseas. LaSorda
stated a decision on where to build the car will not be made
until later this year and possibly not until 2014.
The Caesar Rodney Institute, a Delaware-based think tank, is
skeptical of the production claims advanced by Fisker Automotive.
The Institute notes that current hybrid auto sales average about
300,000 cars annually. It questions
how a start-up carmaker producing expensive, high-end autos could
expect to sell 100,000 cars and seize considerable market share
from established, low-cost manufacturers such as Toyota whose Prius
already accounts for 55 percent of hybrid auto sales.
The question is what will the Department of Energy do with the
$336 million already earmarked but not yet disbursed to Fisker
Automotive? We may not know the answer to this question until after
November 6, 2012.
