The silver lining in Delaware's Fisker plan
Here is Doug Rainey's essay for newsworks:
It may not be time for Delaware to give up on Fisker Automotive.
Last week, the automaker announced plans to open a Midwest technical center for the Fisker Atlantic, in 2013. That means the company plans to move forward on the plug-in hybrid sedan that will take on smaller versions of the BMW, Audi and other luxury nameplates.
If built, the Atlantic would come with a BMW engine, which would kick in during long trips, with battery power used during shorter commutes.
The 2013 date also suggests that the company still plans to move forward to build the car in Delaware at the former GM Boxwood plant. Fisker stated in a release that Delaware is still the “intended” location for the plant.
It all comes down to whether the federal government lifts the suspension of the federal loan that was stymied by problems with the company's first automobile, The Fisker Karma luxury sedan.
Fisker says it has enough money to build the Atlantic elsewhere, but that could add a year or more to its roll-out date.
It did not help that Fisker and other companies became a hot topic in the presidential campaign for tapping the federal loan programs that originated in an effort by Congress and the administration of George W. Bush to come up with more fuel-efficient vehicles.
Companies like electric car maker Tesla and Fisker were dubbed losers by presidential candidate Mitt Romney during the first presidential debate.
Criticism of a state loan package for Fisker was also a part of the campaign of gubernatorial candidate Jeff Cragg and a point of criticism from the Caesar Rodney Institute, a Dover-based public policy group. Cragg's opponent Gov. Jack Markell piled up more than 70 percent of the vote on his way to re-election.
Delaware does have “claw back” language in its loan package that would allow it to demand funds if Fisker went elsewhere.
A much bigger issue on the national stage was Romney's criticism of the federal assistance package for Chrysler and GM. The package proved to be popular among voters in Ohio, Wisconsin and other Midwest battleground states.
If the finances of Fisker have improved to the point that the feds are satisfied, it is not out of the realm of possibility that we will see the mothballed Delaware plant spring back to life next year.
Right now, Boxwood is a quiet place, with the State of Delaware reportedly paying the electric bill while awaiting the final decision.
Another intriguing prospect is a less expensive Fisker, an idea that has been floated by the company's new CEO Tony Posawatz, who led the development of the Chevrolet Volt. Another Fisker line would e a natural addition to Boxwood, which has far more space than needed for the assembly of the Atlantic.
The possibility of a smaller Fisker has led to speculation that Chrysler parent Fiat might partner with Fisker. Fiat is one of a few large automakers that has not plunged into in the hybrid business. Fiat did introduce an electric car for the California market this month.
Given the sluggish sales to date of the Volt and the fact that gasoline prices have remained below $4 a gallon, it is reasonable to ask whether the Atlantic or a cheaper Fisker is a wise bet on green business.
Still, Fisker has been able to raise $1.2 billion or more in private equity. Smart people are betting on this company and for now, Delaware has little choice but to do the same.
You can find Doug Rainey at www.dougrainey.com
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