Amid hardball negotiatons, upstart California carmaker Fisker is testing the Democrats' policy of subsidizing manufacturing jobs:
"Fisker Automotive Inc. said it is delaying production of its next-generation family sedan and may not build the vehicle in Wilmington, Del.," Detroit News reports here. "CEO Tom LaSorda," ex boss of Chrysler, said "Fisker may move production outside the United States" if it doesn't raise enough additional government or private money to build here.
In late 2009, Vice President Joe Biden joined a crowd of 1,000 - Delaware politicians and United Auto Workers members, mostly - announcing more than $500 million in low-cost US Department of Energy loans plus $12.5 mllion in state economic development loans and $9 million in utility loans from Delaware Gov. Jack Markell to retool the shuttered General Motors Plant in Stanton, west of Wilmington, and hire up to 2,000 construction, manufacturing and support workers to make Fisker electric-hybrid cars.
From Delaware Gov. Jack Markell: "When Fisker and the Department of Energy reached an impasse over the distribution of the remaining loan, Fisker made clear they did not have the capital necessary to build out the Boxwood Road plant" (since a big US loan was to finance the Delaware plant).
He added: "Fisker said again during the unveiling that their first choice remains to build their next car in Delaware. That remains our first choice as well. If it becomes clear that Fisker’s need for additional capital leads them to build elsewhere, we will vigorously enforce our rights to recovery under the state’s loan agreement."
The state loans become grants (permanent) if the plant ends up creating the promised 2,495 jobs, says Markell spokesman Brian Selander.
The News says Fisker has already spent $193 million of federal money for its European-built Karma model and other projects. "But the Energy Department froze the rest of the loan last year amid talks about the company's business plan," the News reports.
Fisker's small car, "the Fisker Atlantic, was to start production this summer in Wilmington. Now, LaSorda said, he won't decide where to build the vehicle until the end of summer, and said it might not come out late this year or next."
Wilmington "is still our primary choice, but we're looking at other options," he told the News, noting Fisker "is getting a lot of interest in building the Atlantic elsewhere... There's a lot of interested parties outside the U.S. willing to invest in the company."
Fisker laid off 26 workers in an initial Wilmington restart crew back in February. LaSorda said the Wilmington plant is "gutted and is ready to go" but no tools have been installed.
If Fisker opens the plant, it's a victory for Democratic-run Delaware, which has offered incentives to revive aging auto and oil plants and to new energy, health and distribution businesses. These efforts are popular with Delaware financial and labor leaders. But if LaSorda takes taxpayer money and runs, the result are an embarrassment for government-backed industrial policy and a boost to conservative Republicans who say government does a poor job picking winners.