Print 44 comment(s) - last by Cypherdude1.. on Oct 29 at 12:25 AM

Fisker Karma
Electric car startup grows thanks to a government loan

Currently, California-based electric car startup Fisker automotive is sub-manufacturing its Karma plug-in electric vehicle through Valmet Automotive in Finland.  Now thanks to a loan of $528.7M USD from the Department of Energy, Fisker is moving the focus of its production -- and the money and jobs that goes with it -- to the United States.

The move became official at a press conference in Wilmington, Delaware this morning.  Joined by Delaware's Governor, Jack Markell, and Vice President Joe Biden, Fisker's founder and CEO Henrik Fisker officially announced his company's plans to purchase a closed GM plant and repurpose it to produce his company's electric vehicles.

The plant was built by GM in 1947 and was last used to produce the Pontiac Solstice and Saturn Sky, both of which ended production last spring.  It is currently owned by Motors Liquidation, the government-organized bankruptcy holding from GM that is seeking to sell off the company's remaining stale assets.  Fisker will get the plant at a bargain price of $18M USD, leaving plenty of its loan funding for the retooling, employment, and distribution costs.  The refurbishing and retooling of the plant is estimated to cost $175M USD and will take three years to fully complete, though partial production may start before that.

The plant sits on a spacious 142 acres of land and features over 3.2 million square feet of floor space.  Once retooled, it will be used to build a new, more-affordable plug-in that Fisker is currently cooking up, codenamed "Project Nina".  Fisker plans to release this new vehicle by 2012 and reach production levels of 75,000-100,000 units annually by 2014 which is well above current Karma production levels.  The company says that half the production will be sold domestically and approximately half of the production will be exported and sold overseas, under his company's current plan.  It is targeting a price of under $40,000 for the vehicle, after federal tax credits, ironically similar to the speculated price of the 2011 Chevy Volt, produced by GM.

Mr. Fisker praised the plan for the new plant.  He describes, "This is a major step toward establishing America as a leader of advanced vehicle technology. Wilmington is perfect for high quality, low volume production and will soon be the proud builder of world-class, fuel-efficient Fisker plug-in hybrids."

Although Fisker's current overseas production plans have caught some flak, more criticism may be raised over the plant's use of unionized labor.  The plant will employ 2,000 workers, mostly UAW members.  The decision to keep the plant unionized is a rather atypical choice for a startup auto firm.  The plant will also lead to the employment of approximately 3,000 supplier jobs in the U.S.

Gary Casteel, UAW director responsible for the plant, cheered the decision to keep the plant unionized, stating, "It gives me great pride to give UAW Local 435 workers the opportunity to partner with Fisker Automotive to create a greener America by building a plug-in hybrid car that will compete globally."

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

An EV Startup with Union Workers??
By 67STANG on 10/27/2009 5:41:45 PM , Rating: 5
Good way to turn a $40,000 car into a $60,000 car.

RE: An EV Startup with Union Workers??
By Lord 666 on 10/27/2009 5:57:33 PM , Rating: 5
Yeah, would have pegged "shit canning the union" as task #1.

RE: An EV Startup with Union Workers??
By Motoman on 10/27/2009 6:06:25 PM , Rating: 2
Agreed. So much for Fiskar - may as well write them off now.

RE: An EV Startup with Union Workers??
By Cypherdude1 on 10/28/2009 3:57:25 AM , Rating: 2
Once retooled, it will be used to build a new, more-affordable plug-in that Fisker is currently cooking up, codenamed "Project Nina".
Despite what pundits are saying, there is a limited market for expensive EV's. With Chevy's Volt, Tesla and all the hybrids being made, not to mention California's own EV, you have to wonder just how many EV's Fisker can sell. There is demand for EV's, but I find it hard to believe all of these companies won't saturate the market. Moreover, you have to assume many consumers will wait for batteries, the primary EV component, to improve. I would. Right now we're only in the v1.5 stage for battery power. There was an article, possibly on DailyTech, which mentioned how engineers are combining lithium batteries with sulfur to TRIPLE their power.

RE: An EV Startup with Union Workers??
By ZimZum on 10/28/2009 8:33:30 AM , Rating: 4
Just because the labor force is still "Unionized" doesn't mean they have the same deal with Fisker as they had with GM. I can guarantee you their compensation package is completely different.

RE: An EV Startup with Union Workers??
By Chudilo on 10/28/2009 10:00:17 AM , Rating: 3
I second that. Union labor can be compensated according to performance rather then seniority.

RE: An EV Startup with Union Workers??
By mikefarinha on 10/28/2009 10:58:57 AM , Rating: 5
'Can be' but usually isn't.

RE: An EV Startup with Union Workers??
By Motoman on 10/28/2009 11:27:59 AM , Rating: 4
That's the point. A union could run in a totally responsible manner, working for the best interest of both it's workers and it's employer. The problem is that essentially never happens...I for one am pretty tired of seeing companies and whole towns destroyed by moronic union antics. And the accompanying loss of jobs to foreign lands.

RE: An EV Startup with Union Workers??
By Mitch101 on 10/28/2009 1:04:11 PM , Rating: 2
There is probably supply reasons for going union. You cant sell cars if you cant get parts.

Im going to say people being employed is more important than unions right now even though the jobs are few years out.

I would hope that a huge lesson is learned from Detroit although we all know union greed will try to get the better of them in the long run. Hopefully they can come to an agreement that doesn't run up the cost of the cars and make the business model fail.

I see future designed cars coming from more independent/smaller companies than from big company places like GM/Ford who give us what our grandfathers would design with very little changes from previous designs.

I would certainly love to see Detroit rebound but very little about the business model is sound to survive. Greed ruins both sides of the coin in Detroit and both act like they own the company. It will never work if both sides believes they earned the profits and drive a company to no profit when the demand is lost.

In 10-15 years the entire car company landscape will be much different than it is today. Really Its already started.

By Cypherdude1 on 10/29/2009 12:25:08 AM , Rating: 2
If anyone is wondering, this is the URL for the California EV company:

This is their brochure:

RE: An EV Startup with Union Workers??
By Spuke on 10/27/2009 6:18:34 PM , Rating: 3
Yeah, would have pegged "shit canning the union" as task #1.
They kept the union? F$%k! I thought they were just hiring the workers that were there before. In their defense, the workers at that plant are VERY skilled and experienced in small volume, hand built production runs. They were the same people that built the Solstice/Sky/Opel GT and really do know their stuff.

I really can't believe they agreed to have the union there. Those guys would've worked there without the union. WTF happened?

RE: An EV Startup with Union Workers??
By BZDTemp on 10/27/2009 7:29:49 PM , Rating: 4
Fisker is from Denmark and in Denmark almost everyone is organized. The unions are constructive partners and not just opponents so it may well be Fisker is looking for a positive relationship and not the more traditional Boss vs. Union fight.

RE: An EV Startup with Union Workers??
By jdietz on 10/27/2009 9:06:55 PM , Rating: 5
Foreign unions might be cooperative, but UAW and American unions in general aren't. #1 job of union = more money and benefits for union members. They aren't focused on the symbiotic parts of unionship, like worker training.

RE: An EV Startup with Union Workers??
By mcnabney on 10/28/09, Rating: 0
By weskurtz0081 on 10/28/2009 9:45:10 AM , Rating: 3
Because labor is one of the single largest expenses in pretty much any business, and the union is making that labor FAR more expensive. Maybe that's why.

RE: An EV Startup with Union Workers??
By Cerin218 on 10/28/2009 4:24:11 PM , Rating: 3
Really? So someone turning a wrench on a car or plugging in a harness. is harder to replace then someone who can migrate your entire organization from Exchange 2000 to Exchange 2007? Best part about being an IT person is that my field is always changing, and as long as I keep current with technology I will always be in demand. And the kids these days are growing up with it and most couldn't troubleshoot themselves out of a paper bag. Or have the years of experience with all sorts of technology. Technology isn't something you want a low paid or low quality person working on. And no, when it comes to IT, you might be able to find cheaper, but I have found in technology you get what you pay for. I am the only one out of the 120 employees here that can do my job as well as I can. Which is why I get paid more. IT workers don't need a union. We have skills that are in demand. If I don't like what you are giving me or paying me, I will find someone that will. Keep yourself relevant and you don't have to worry about a job. I'd like to see your justification for plummeting IT salaries. Even if they do by some miracle, there are enough uneducated users with malware problems that need to have wireless networks installed. What job does an auto assembler do that would be useful as a side job?

By Lord 666 on 10/28/2009 5:09:31 PM , Rating: 2
And you are the very reason why IT gets a bad rep. Drop the arrogance, share your knowledge with other IT staff on your team, and move onto the next challenging aspect of IT.

Are you management as well as the technology side? Always remember that someone has more experience than you and can get it done faster. Your myopic view is within your organization, not the entire labor pool of IT.

Just some friendly advice... otherwise I agree there shouldn't be an IT union. Even though I wouldn't mind starting one so I can be a millionare and retire soon.

RE: An EV Startup with Union Workers??
By Keeir on 10/27/2009 10:57:47 PM , Rating: 2
I really can't believe they agreed to have the union there. Those guys would've worked there without the union. WTF happened?

I think your overlooking a few things

#1. The plant in Delaware will only produce "Nina", not the Karma car. Thus, its unlikely production will even start until 2012 at the earliest. 3 years is a long time to go without a job. The UAW contacts might be to maintain the on-site skill training, rather than start from scratch, which could provide -substantial- cost savings. The UAW may also work to bridge the gap between the Kappa and the Nina, allowing a retention of a higher percentage of skilled workers.

#2. Since Fisker Motors is not yet a public company, I don't think the Union contract has to be made public. Although I am sure contract will be leaked, there is nothing that says the UAW contract with Fisker can't be at an end cost to Fisker of 20% less than say GM or Ford. In fact, I could see a wily Union offering Fisker a sweethart deal on the first 0-5 years to ensure the company gets established.

In the long run, this could really screw Fisker, but I don't see it as a major barrier to short term development of profitability.

By Ammohunt on 10/28/2009 10:38:28 AM , Rating: 3
well when you pay a high school drop out $30 an hour to put a few bolts in a car on an assembly line they eventually get good at it when they are not on break or vacation.

RE: An EV Startup with Union Workers??
By FITCamaro on 10/27/2009 6:29:01 PM , Rating: 4
Of course the UAW stayed. They're funded with government loans. Was probably a back room stipulation of getting the money.

By randomposter on 10/27/2009 8:55:37 PM , Rating: 5
Good thing you have the ability to track how stimulus money is being spent, and to report fraud taking place if you do in fact believe that is the case.

Use the resources available to you and hold your government accountable.

By Nfarce on 10/27/2009 8:57:37 PM , Rating: 2
Of course the UAW stayed. They're funded with government loans.

(You just have to love all the down ratings around here on posts like these). Yeah Fit, is that the same UAW that got handed control of GM when the Obama administration took a big massive dump on bond holders and turned controllership over to the UAW?

By 67STANG on 10/28/2009 3:34:07 PM , Rating: 2
Also, you can't forget that Fisker is backed by Al Gore. Al Gore was backed heavily by the UAW during his bid for the presidency. Old friends never forget old favors.

By mmcdonalataocdotgov on 10/28/2009 12:05:11 PM , Rating: 3
No no no, they won't make it more expensive, they'll just make it crappier like GM did. Make cheap cars to keep the UAW monopoly out of the till, then make buyers spend lots of money to fix their cheap cars using licensed parts and dealership labor - which is not unionized. Fisker makes its money and you have to keep buying their cars since they fall through their a$$es after a few years on the road and no one else will take them in trade. Win-win-win. What's the last win? Biden and those guys keep their union voters happy.

"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer

Most Popular Articles5 Cases for iPhone 7 and 7 iPhone Plus
September 18, 2016, 10:08 AM
No More Turtlenecks - Try Snakables
September 19, 2016, 7:44 AM
ADHD Diagnosis and Treatment in Children: Problem or Paranoia?
September 19, 2016, 5:30 AM
Walmart may get "Robot Shopping Carts?"
September 17, 2016, 6:01 AM
Automaker Porsche may expand range of Panamera Coupe design.
September 18, 2016, 11:00 AM

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki