The interim president of the new Fisker Automotive said the chances are “50-50” that it will use the old General Motors plant to build automobiles.
Roger Brown became the temporary head of the plug-in hybrid electric company after Wanxiang America Inc. purchased Fisker’s assets in a bankruptcy sale on March 24. One of those assets is the plant near Newport, which the old Fisker had planned to use to build cars with state and federal incentives.
“We inherited this situation, and because the facility is one of the assets we purchased, it has ... good bones, it has a paint shop, and you know, it definitely makes economic sense to consider that facility,” Brown said in a telephone interview on Thursday.
Other states have made assertive advances about Fisker moving its manufacturing there, Brown said, declining to name names, nor discussing whether Delaware has offered any new incentives to stay and build here.
Fisker, attracted to Delaware by Gov. Jack Markell in the depths of the recession, received $20 million in economic incentives from the state to build its second-generation car, the Atlantic, at the plant on Boxwood Road near Newport. As the bankruptcy case works its way toward a conclusion, it is becoming increasingly clear the state will get little of that money back.
Brown said the first thing on the new Fisker’s agenda is to relaunch the Karma by August of 2015; the Surf, a Karma with a different body, by March 2016; and have the lower-priced Atlantic ready to go toward the end of 2017.
The company is “doing that analysis as we speak” about where to make all three vehicles, he said. Delaware, he said, “has not been ruled out or ruled in. What we’ll do is put the economic probables on paper.”
“Delaware’s got a lead because the real estate’s already paid for,” Brown said.
Fisker will consider whether to use a third-party manufacturer, including Valmet in Finland, but it will not use Bob Lutz’s VL plant in Michigan, Brown said. The company will honor Fisker’s original commitment to supply Lutz with Fisker bodies to use for his Corvette-engine Destino cars, he said.
In a bankruptcy court filing this winter, Wanxiang said it might use the Delaware facility if it moved to mass production of the Atlantic. Analysts quickly criticized that statement as too optimistic, saying the Delaware plant was too old and too big for a startup luxury carmaker. Wanxiang, China’s largest auto parts manufacturer, has never built a car before.
Conventional wisdom is not the same as doing a detailed financial analysis of the Delaware plant, Brown said. “Our world is, we dwell in numbers, facts and execution, period. Random chitter chatter is not something we’re very good at.”
It would cost $500 million to build a manufacturing facility from scratch, and of that, a paint booth would be $275-300 million, he said. Even though the Delaware plant is old, he noted that so is the former Toyota/General Motors joint venture plant that Tesla, another electric car startup, is using in California. Tesla is not using that entire facility, and Fisker would not use the entire facility in Delaware, he said.
The Delaware facility also has a robust supply of power, Brown said. The new Fisker will weigh whether Delaware is a good tax environment and whether employee resources are readily available as it makes its decision, but “those are things we’re starting to study.”
“If they provide incentives, obviously that would go into the equation; if they don’t, obviously that would go into the equation also,” Brown said of Delaware.
Other factors that will be considered are transportation infrastructure, logistics, cost of power, and a readily available supply of skilled labor. Auto workers from the General Motors days would need to be retrained to work with the high technology that comes with Fisker, he said.
“This car has to be a technology wonder, and that’s what we’re trying to create,” Brown said.
Brown said that the new company has budgeted $5 million a year to keep the Delaware plant viable, including the boilers and electricity, maintenance and security. The company does not plan to let it sit around very long, he said. If Wanxiang does not build cars there, its real estate arm would come into play, looking for other uses, such as an industrial park, manufacturing of some other sort, or perhaps a distribution center, he said.
The new Fisker now has two or three people onsite, “a constant team of people making sure X and Y stay running,” he said.
Brown said Fisker, based in Costa Mesa, Calif., has about 30 employees, largely from the old Fisker workforce, including hybrid technology engineers. “We’re putting a team back together,” Brown said. “This is really a startup, but it’s a startup that has a little steam ahead of it.”
Brown’s Tennessee-based company, Summit Strategic Investments LLC, owns Segway, the motorized scooter company, and has done business with Wanxiang on and off since 2004.
“Everything will be weighed. We have to figure out, what’s the best for Fisker Automotive,” he said.
The old company was Fisker Automotive, Inc.; the post-bankruptcy company primarily owned by Wanxiang is Fisker Automotive and Technology Group LLC, he said.
Contact Aaron Nathans at 324-2786 or [email protected]