• Apr 28th 2010 at 11:57AM
  • 16
Fisker Karma – Click above for high-res image gallery

Virtually every company has one thing in common these days: the need for more money. Just days ago, Fisker finished the deal on quite a sum of cash, a whopping $528 million from the federal government. Now, Fisker is turning to the state of Delaware, home to one of the company's upcoming production facilities, in search of more dough. They are only asking for pocket change this time around, relatively speaking.

Fisker is asking the state for a $9 million grant to help pay its utility bills. But it doesn't end there, they want an additional $12.5 million in loans (which could become grants) to fund upgrades needed at the production facility, a former General Motors assembly plant. If it comes as a surprise that Fisker is asking the state to cover its utility bills, it shouldn't. This is common practice as states do virtually everything in their power to secure sources of employment.

Fisker has to meet certain requirements to receive the money without being obligated to pay it back. They must employ 2,495 workers and spend a minimum of $175 million on renovations for the $12.5 million loan to convert over to a grant. If they fail to meet those guidelines, the loans will have to be repaid. The $9 million utility grant is icing on the cake to keep Fisker happy. Follow after the jump for the full release.



[Source: Delaware CDF Board]

PRESS RELEASE

CDF Votes for Economic Renewal of Former GM, Valero Plants and Supports Other Jobs

The Council on Development Finance, the advisory board to the Delaware Economic Development Office, recommended the agency award financing Fisker Automotive and Delaware City Refinery, as well as five other projects for job creation, relocation and expansion.

New Castle, DE (Vocus/PRWEB ) April 26, 2010 -- The Council on Development Finance, the advisory board to the Delaware Economic Development Office, recommended the agency award loans and grants to seven projects for job creation, relocation and expansion at a public hearing today.

Among the projects, the Council voted unanimously to recommend the agency to commit $21.5 million to Fisker Automotive and $20 million to the Delaware City Refinery Company, a wholly owned subsidiary of PBF Energy Partners, LP. Both companies will acquire plants previously shuttered in Delaware, pledging to spend millions in capital investments and create thousands of jobs. The recommendations by the Council finalize months of work by the Markell Administration to recruit the companies to Delaware.

"CDF members cast critical votes for Delaware's economic renewal. They made a decision to aid our team effort to get people back to work and help those already working improve their economic opportunities," Markell said.

"The favorable recommendation from the Council on Development Finance reaffirms our work to make wise strategic investments that will contribute to a stronger economic future for our state," said Alan Levin, director of the Delaware Economic Development Office.

Fisker will make plug-in hybrid electric cars at the former General Motors Boxwood Road plant near Newport. If the plant employs 2,495 workers and Fisker has spent at least $175,000,000 renovating the facility after five years, the Delaware Strategic Fund loan will convert to a grant. An additional $9 million grant will help with utility bills. PBF Energy will acquire the former Valero refinery in Delaware City and restart operations as early as spring 2011. Its loan agreement will also convert to a grant if the company spends in excess of $100 million and supports 600 full-time jobs per consecutive year for five years.









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    • 1 Second Ago
  • 16 Comments
      harlanx6
      • 5 Years Ago
      It's an iffy proposition at best. I kind of think it might be an act unpopular with the Delaware taxpayers. After years of hype, (as the old lady said) where's the beef? I guess there are a few prototypes around, but by being so late to go into production It looks like Tesla is the clear winner in that segment.
        • 5 Years Ago
        @harlanx6
        "The Karma is an 80,000 USD automobile, therefore it is more of a competitor to the Tesla Roadster, which has been for sale for the last 3 years."

        You think a full sized 4-door sedan/sportsback series hybrid is a competitor to a tiny 2-seater EV? I would have to disagree. It's priced right in the middle of the Tesla models, so price doesn't really pull it one way or the other.
        • 5 Years Ago
        @harlanx6
        The Fisker is competitively priced to compete with the BMW 7-series, the Mercedes S-class, and the Audi A8. The Fisker is being marketed as a premium luxury sedan, with eco-chic appeal and a designer label. The closest competition, IMHO, would be the Maserati (as a rival for fashion) Quattroporte, or the new Jaguar XJ (as a rival for uniqueness).

        The Tesla Roadster is not in any way comparable to the Fisker Karma. The Karma S - the convertible - yes, but not the sedan.
        • 5 Years Ago
        @harlanx6
        @Spec

        The Karma is an 80,000 USD automobile, therefore it is more of a competitor to the Tesla Roadster, which has been for sale for the last 3 years.
        • 5 Years Ago
        @harlanx6
        The Karma is scheduled to beat the Model S to market by a long shot. But then again, who knows what will really happen.
        • 5 Years Ago
        @harlanx6
        Delaware is a small state, so 21MM is not an insignificant sum. De has done a good job managing their books so they are not in as dire straights as some states. It will be interesting to see what happens. I lived in De for 6 years and I plan to move back within the next year.
      • 5 Years Ago
      You too Fisker . . . how about you ship a product before you ask for more money in addition to the hundreds of millions you already got?

      You promised the Karma would be shipping by now.
        • 5 Years Ago
        Ergh, yeah.

        I guess i kinda hate the idea of my tax money going to fund the majority of a luxury manufacturer's startup costs.. i suppose the deal with Tesla is the same.. either ways these companies won't make money for a long time, if ever. I can't help but think it is a waste. Tesla has only sold ~1000 cars thus far, making $2 million on $200 million's worth of investment, for example..

        It seems like strong-arming the major manufacturers into making EVs would be a hell of a lot cheaper. Mass production techniques + engineering knowledge of the major manufacturers will deliver an affordable product like a Nissan Leaf on schedule and on budget. Everything else looks hinkey.

        They had better deliver the goods, or i'm gonna go all 'green tea party' on them :)
        • 5 Years Ago
        Did ya get a new ride, Neptronix?
        • 5 Years Ago
        "Green Tea Party"! LOL! I love it. I'm stealing that.
      • 5 Years Ago
      @Eric Loveday: "Virtually every company has one thing in common these days: the need for more money."

      I realize blog writers feel they have to add commentary to their reposts and have little time to do it, but really?! Apple and Microsoft each have around $40 billion in cash reserves. Many businesses are conserving cash and not taking out loans or issuing bonds despite historically low interest rates. They're NOT spending money to make more money. That's why most economists argue that those government programs were/are needed to stimulate the US economy and get it out of the recession.
      • 5 Years Ago

      "Fisker has to meet certain requirements to receive the money without being obligated to pay it back. They must employ 2,495 workers and spend a minimum of $175 million on renovations for the $12.5 million loan to convert over to a grant. If they fail to meet those guidelines, the loans will have to be repaid."

      They can only "pay it back" if they don't go out of business.

      Not a bad investment if everything works out and 2,495+ people are put to work. 2,495 people paying taxes is a good thing for the first state.

      21.5M/2495 = $8,617 per job

      I am sure that sum will be repaid when the employees buy houses, cars and "stuff."

      The only question is: How viable is Fisker?
      • 5 Years Ago
      What disturbs me is just how badly our system in the US has failed. It is truly socialism for the rich; free-market for the rest. Businesses, both domestic and foreign, just bully states around for the sake of jobs. The states are basically paying corporations to headquarter, build, or otherwise exist there, rather than in some other state. The tax breaks, grants, etc., have to be paid for, somehow - by the working class, through their income, property and real estate taxes. Bringing jobs to an area requires more roads and bridges, it means more kids in local schools, etc., etc. That all costs money, and it's the workforce that pays. George Carlin was right about the economic classes in this country: the upper class has all of the money, pays no taxes and does no work; the middle class pays all of the taxes and does all of the work; the poor are there, just to scare the shit out of the middle class - keeps the middle class showing up at their jobs.
        • 5 Years Ago
        and I forgot about sales tax and gas tax, etc. - flat rate consumption taxes. Again, all paid by the labor force and support services.
      • 5 Years Ago
      Wilmington Assembly attracted Fisker because it fit the company's business model. It was in good condition and well equipped (something Delaware officials were very smart in arranging when it was shut down), the right size and the right location (near ports for export). But there were other plants the company was considering. Delaware sweetened the deal by offering incentives that would attract the company and, more importantly, put thousands in the community back to work which generates a lot of tax revenue. Fisker did not 'seek' the funds. To protect the taxpayer, both DOE and state funds are carefully disbursed in small amounts as needed and only if the company meets certain criteria.
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