PhillyDeals: Papers signed to revive auto plant in Wilmington

Henrik Fisker and Bernhard Koehler spent the last two days in Delaware, thanking American politicians and taxpayers and local autoworkers for backing their upstart luxury-electric- hybrid car company, Fisker Automotive Inc.

Fisker signed a letter of intent Monday night to buy General Motors Co.'s shuttered plant on Boxwood Road, west of Wilmington, pending "a routine four-month evaluation period." The public celebration was yesterday.

Fisker and Koehler, veteran auto executives, plan to pay $18 million for the 142-acre complex and 3.2 million square feet of factory space, and spend $175 million to turn it into a factory for fancy plug-in cars over the next three years. When it's done, the plant will employ up to 2,000, building up to 100,000 Nina-model cars a year, at $40,000 each (after federal tax breaks).

The pair has raised "around $100 million" from equity investors, spokesman Russell Datz told me, including Silicon Valley venture capitalists Kleiner Perkins Caufield & Byers and Palo Alto Investors L.L.C.; publicly traded California electric power train manufacturer Quantum Fuel Systems Technologies Worldwide Inc., and the Persian Gulf oil-exporting nation of Qatar.

The company has raised an additional $529 million in loans from the U.S. Department of Energy's electric-car-development program, which is also backing projects by Ford Motor Co., Nissan Motor Co. Ltd., and rival electric luxury carmaker Tesla Motors Inc., among others now competing with government-controlled General Motors and Chrysler Group L.L.C.

"The funds come at the government's cost of borrowing. The most recent rate is 27/8 percent, substantially better than the market rate," Matt Rogers, senior adviser to the secretary of energy, told me. "The view was, the capital markets wouldn't provide money fast enough" to "make the most efficient cars in the world."

Delaware is considering an additional $12.5 million loan to Fisker, which becomes a grant if it creates enough jobs, plus a $9 million utility-bill subsidy, Joe Rogalsky, a spokesman for the state's governor, Jack Markell, told me.

Henrik Fisker addressed a crowd of more than 1,200 members of United Auto Workers Local 435 that hope to return to the plant under new ownership, as well as senior UAW officers, and other visitors, from a stage on the shop floor. He made a case for public financing for the nascent electric-car business.

"We can lead the world again, in the United States of America, in car manufacturing," Fisker said, with a trace of his native Danish accent. "We were planning to start in about three years. But with the help of the Department of Energy, we are able to start this car today." The crowd cheered long and loud.

"We're planning to produce the vehicles here," he added, "and export at least 50 percent [of them] to the rest of the world" through the plant's railway connection and the nearby Port of Wilmington's auto terminal. "We believe the future is plug-in hybrids," he continued. "We believe the vehicles have to be desirable, beautiful, and attractive to people. Fisker Automotive is only going to play a small part. But we're willing to grow. And I think you guys are willing to grow with us."

There were so many UAW-jacketed workers parked in the lot and flooding the security checkpoint, "it looks like a shift change before the plant closed," Sam Lathem, head of the state AFL-CIO, told me. He warned that most of the jobs wouldn't materialize until 2012 and 2013, after the plant's been rebuilt.

There were so many politicians on hand to take credit, "It looks like Return Day in Georgetown," said U.S. Rep. Mike Castle (R., Del.), recalling Delaware's traditional postelection parade joining winners and losers after each election.

Castle, Markell, and Sen. Tom Carper (D., Del.), among others, got to speak, but the day's big talker was Vice President Biden, son of a prosperous Delaware car dealer. Biden told the crowd he was once turned down for a college summer job at Boxwood and has spent hours of his life since then haunting the plant gate looking for votes.

"I wouldn't be the vice president of the United States of America without you, because I never would have been a senator," Biden said, to shouts of "Joe! Joe!" and "Wil-ming-TON!"

"When I was a 28-year-old kid running for the Senate, the first outfit to endorse me was the UAW. So I owe you."

Biden defended the government's role in picking winners and bailing out losers in the car business. It's "not subsidies," he said, but "seed money that will return back to the American consumer in billions and billions and billions of dollars in new jobs."

It's a blow "against the oligarchs of oil," Biden added. "[While] all the rest of the world is trying to have their [automotive] industry get a foothold" in electric cars, "we're not going to stand by."

Lathem said he had heard much of the same talk from the same crew at a morning labor breakfast, and in a signing ceremony at Markell's house Monday night.

"They signed that letter of intent," Lathem told me. "At least we have it on paper now."

As to the "middle-class" wages and benefits Biden bragged about, and other terms and conditions of employment that UAW workers in Delaware used to enjoy, "that's still to negotiate."