http://www.delawareonline.com/article/20091011/BUSINESS/910110370/1003/Boxwood-plant-attracts-attention
Fisker portion of the article bolded below.
Pontiac Solstice:
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Fisker portion of the article bolded below.
Pontiac Solstice:
Delaware Online said:At least three auto companies have toured the empty Boxwood Road assembly plant near Newport in a bid by the governor's economic development team to revive the state's moribund manufacturing sector.
Delaware is competing against suitors in Michigan and other Midwestern states where the American auto industry has cut back production leaving dozens of abandoned auto plants.
Access to foreign markets through the Port of Wilmington and a commitment to green technology could help Delaware revive a 62-year legacy of building cars that ended when General Motors closed Boxwood in July.
At least three auto companies have toured the plant since then, people with knowledge of the situation said. The interested firms included an American startup that's developing a plug-in hybrid car and an Indian automaker looking to expand in the United States.
Last week, a small Texas company floated the idea of using the Boxwood Road plant to build a rebranded Solstice -- the sports car that GM killed when it closed the plant and discontinued the Pontiac brand.
Though state officials would likely welcome any practical use for the 3.2 million-square-foot factory, luring an automaker is at the top of the list. Returning the plant to its original use would bring the prospect of putting hundreds of unemployed auto workers back on the assembly line, not to mention millions of dollars in capital investment.
But at a time when domestic automakers are trying to dispose of a number of empty plants, Delaware faces an uphill battle -- finding a car company that can build vehicles here profitably.
"I would caution the people in public policy to not throw too much money at something because you can get burned pretty badly," said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.
When General Motors filed for bankruptcy protection June 1, the company announced it would close the Boxwood Road plant just two months later.
A "new GM" emerged from bankruptcy on July 10, but unwanted properties were left behind in bankruptcy court, including the Boxwood Road plant, 15 other factories and about 200 total properties valued at $2.3 billion, but likely to bring in far less. Today, an entity called Motors Liquidation Co. is working to dispose of the "old GM" to repay creditors.
Tim Yost, a spokesman for AlixPartners LLP, the corporate turnaround firm in charge of the Motors Liquidation effort, said the company has been approached by at least four different automakers interested in old GM sites. The automakers, he said, have been a mix of established and startups.
"We have had a fair amount of interest, not just from car companies but from others too," Yost said.
Gov. Jack Markell's administration would not discuss any specifics about its efforts to fill the factory. But it's no secret the administration would like Boxwood Road to continue as an auto plant, which has among the largest economic ripple effects of any industrial operation.
Markell asked Motors Liquidation to leave some equipment in the plant to help the state market the facility; the company has informally agreed to the request.
"Gov. Markell and the state of Delaware have been among our most proactive and creative partners so far in this huge, important process," Al Koch, the CEO of Motors Liquidation Co., said in an e-mail. "Our aim in every community in which we have facilities is to see win-win solutions for those communities consistent with our obligations under the bankruptcy proceedings, and that's certainly what we hope to achieve in Wilmington."
Enhancing the green initiative
Irvine, Calif.-based Fisker Automotive, is one of the companies that has visited Boxwood. Its green initiative would fit in with one of Markell's main objectives.
In September, Fisker was awarded a $528 million loan from the U.S. Department of Energy, part of a $25-billion program to fund the development of alternative vehicle technologies. Fisker's technology uses a rechargeable lithium-ion battery to power an electric motor, complemented by a gasoline engine that turns a generator and charges the battery.
About $169 million of the loan was designated for engineering work for the Karma, Fisker's first vehicle, a luxury sedan with a starting price of $87,900. The car, which Fisker says can achieve an average fuel economy of 100 miles per gallon, is made in Finland by contract manufacturer Valmet Automotive.
The remainder of the loan -- about $359 million -- is designated for what the company calls "Project Nina," the development of a family plug-in hybrid sedan that would sell for $39,900 after federal tax credits. The company says it wants to build 75,000 to 100,000 of the cars each year at a retooled U.S. assembly plant, beginning in 2012.
According to Fisker's loan agreement with the Energy Department, the company estimates its costs for revamping an assembly plant will be no more than $449 million, assuming an acquisition cost of $42 million. The company must acquire a site, conduct an environmental assessment and have permits in place before receiving its initial advance for the Project Nina loan.
Bringing Fisker to the Boxwood Road plant would be an economic development coup for the Markell administration, which has emphasized green jobs as a way to grow Delaware's economy. The startup automaker could also help stanch the bleeding of manufacturing in Delaware. The state has lost 4,100 manufacturing jobs in the last year, and the closing of the Boxwood Road plant and Chrysler's assembly plant in Newark have been the highest-profile symbols of the decline.
Delaware will almost certainly face competition, likely from Michigan. Fisker has an engineering center in the city of Pontiac, and the state has multiple abandoned auto assembly plants to offer.
The Boxwood Road plant could have an advantage with its proximity to the Port of Wilmington; Fisker has said it expects to export half of its vehicles. A Fisker spokeswoman said the company is considering multiple U.S. facilities but that it would be premature to disclose which ones.
An international presence
Another automaker that has shown interest in the Boxwood Road factory is Tata Motors of India, according to sources. Tata acquired the Jaguar and Land Rover brands from Ford in 2008, giving them a foothold in the U.S. market. The company did not respond to a request for comment.
Haig Stoddard, an auto analyst with IHS Global Insight, said an international automaker would be the likeliest candidate to buy an existing plant, especially a company from China's growing auto industry. He said it makes sense that Tata would at least be interested in a manufacturing site as it looks to expand its U.S. presence, but he questioned whether the company is ready to pull the trigger on a deal.
"I don't see them having the kind of volume with what they're coming out with where it would make sense to have a full-blown manufacturing facility here," Stoddard said.
The Boxwood Road plant also drew a visit from Penske Automotive Group, which had planned to buy the Saturn brand from GM. That deal fell through at the end of last month when Penske could not reach a deal with a third-party manufacturer to build cars for Saturn.
DeLorean revival a possibility
While most potential buyers have said little about their interest, one company is taking the opposite approach. Last week, the current incarnation of DeLorean Motor Co. publicly floated the idea of building the Solstice at the Boxwood Road plant.
The original DeLorean Motor Co. was launched in 1975 by former GM executive John DeLorean, who as an engineer helped reinvigorate the Pontiac division with cars such as the GTO. DeLorean's short-lived company was best known for its DMC-12 sports car, which was featured in the "Back to the Future" movies.
Entrepreneur Stephen Wynne bought the remaining inventory of DeLorean parts in 1997, and his company operates under the DeLorean Motor Co. name, servicing existing cars and rebuilding a small number of new ones.
Wynne said the Houston-area company, with about 20 employees, has been looking for another product to keep the DeLorean brand alive. The idea of rebranding the Solstice fits in with the company's history and heritage, Wynne said.
"With that plant and that tooling and that product range, it just makes absolute sense to continue on," he said.
Wynne said his company has had no contact with Motors Liquidation or Delaware officials, nor does it have funding in place. The company first wanted to gauge response from the public, which Wynne called "phenomenal."
He said the next step will be to put a management team together and approach the state and Motors Liquidation about acquiring the Boxwood Road site.
"First of all, we've got to find out, what is the magic number?" Wynne said. "Once we find out what the number is, then we'll go out looking for the funding."
Selling an auto plant is a difficult task in any economic environment. The mammoth structures are too big for most manufacturing operations, and the sites -- especially older ones like Boxwood Road -- bear the scars of years of toxic pollution.
"The success rate has not been good for unloading these sites to other manufacturers," Stoddard said. "For the most part, they're still all standing there."
Delaware has seen two auto assembly plants close in the last year. The University of Delaware is the only known bidder for Chrysler's Newark assembly plant, which closed in December. The university's plans for the 244-acre site include turning it into a technology park and possible home for a Delaware medical campus of Thomas Jefferson University.
As the state and Motors Liquidation market the Boxwood Road plant, they face a challenge that contributed to its closing -- Delaware's distance from the industry's supply base in the Midwest. But the state's location could also work to its advantage for companies bringing in parts from overseas, Cole said.
Another advantage for Delaware, Cole said, is the availability of a skilled, motivated work force. The United Auto Workers Local 435, which represented Boxwood Road workers, is still intact. Dave Myers, president of the local, said he hadn't heard of any automakers touring the plant, "but we would welcome any that would come through there."
