[caption id="attachment_15376" align="alignright" width="285" caption="Work is underway to renovate and refit Boxwood Road auto plant for its new owner Fisker Automotive."]
When Fisker Automotive announced in October 2009 that it was setting up a new hybrid vehicle factory at General Motors’ old Boxwood Road plant in Wilmington, it came as a welcome boost to a local manufacturing economy that had been hit hard by the plant’s closure earlier that same year.
More than a year before the first Fisker cars are scheduled to roll off the assembly line, the plant is already creating and sustaining local jobs for contractors helping to renovate and refit the former GM plant.
About 55 Delaware companies are involved in cleaning, painting, repairing, and redesigning the plant as well as installing everything from new partitions to vending machines.
“It’s encouraging that we are breathing new life into it rather than just tearing it down,” said Larry DiSabatino, president of the Wilmington-based DiSabatino Construction Company, which is in the midst of a program of power washing, clearing off dirt and debris, and repairing damage at the 3.2 million-square-foot plant.
DiSabatino is using 20 workers, ten of whom are new hires, on the contract which has been underway since the spring and is expected to last at least seven months. The work is worth “hundreds of thousands of dollars” to the company, he said.
DiSabatino hopes there will be more work as the renovation project moves beyond the assembly plant into other areas such as administration offices and the cafeteria. The company plans to bid on the work outside the plant itself, and expects to hire more workers if it wins a new contract, he said.
“We hope that our presence there expands as they continue to ramp up,” he said.
By early August, Fisker had spent $3 million on local vendors, and $4 million on utilities at the new plant, said Alan Levin, director of the Delaware Economic Development Office (DEDO).
In addition to contractors hired for the construction phase, Fisker announced in June that this year it will hire about 120 workers, a mix of engineers, electro-mechanical technicians and early teams of production workers. When it’s fully operational, the plant is expected to employ about 1,500 people.
That will represent a significant stimulus to Delaware’s economy, said William Latham, director of the Center for Applied Business and Economic Research at the University of Delaware.
Calculation of economic benefits to the state will depend on how much the newly hired workers are paid and whether they live in Delaware or in surrounding states, Latham said. The benefits are likely to be particularly strong during the construction phase because that industry is one of the “highest impact” sectors.
Delaware workers are likely to have “some or all” of the skills needed for the new plant, but some retraining may be needed to acquire skills needed for hybrid manufacture, he said.
With growing demand for fuel-efficient vehicles, jobs at a plant making hybrids may be more secure than they would be at a traditional car plant, but how much more will depend on how the new vehicles compete with similar models.
“There are lots of competitors in the hybrid and all-electric markets, and it will depend on how well the public likes the cars and what the competition does,” Latham said.
Fisker began production of its plug-in electric hybrid Karma, a $100,000 luxury vehicle, in Finland in July and the first models reached the U.S. late last month.
The company will use its new Delaware location to produce a mid-size sedan, the Nina, starting in late 2012, and eventually aims to move Karma production to Delaware. The Nina is expected to sell for around $50,000, according to James Ursomarso, vice president at Union Park Automotive, Delaware’s only Fisker dealership. The price could drop below $40,000 dollars depending on what tax rebates are available when the car hits the market.
Selling Fisker cars in Delaware
Excerpts of interview with Union Park Automotive vice president James Ursomarso.
Union Park is the only dealer in Delaware selling Fisker cars. The first opportunity to test drive a Fisker Karma will come September 18th when the "Fisker Roadshow" brings a car to Delaware. Later in September, Union Park expects to receive Fisker Karmas to display in its showroom and use for test drives.
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In recognition of Fisker’s economic benefits, Delaware provided $21.5 million in state Strategic Fund money for the project. $12.5 million was in the form of a loan that will convert to a grant if the company generates 2,495 direct and indirect jobs over five years. The remaining $9 million was for utility costs.
The state also required the company to spend at least $175 million on refitting the plant, a sum that is likely to be much higher by the time it is finished, said DEDO’s Levin.
The state’s support was helped by Fisker’s environmental credentials but was based on its assessment that the technology will work in the long term, Levin said.
“I don’t think our decision was predicated on whether it was going to be green,” Levin said. “It was predicated on its viability.” He said he views Fisker’s Delaware operation as “in between” traditional manufacturing and developing green industries.
The new operation is also supported by $529 million in federal loan guarantees. Additionally, New Castle County Council recently voted to give Fisker a 10-year, 50 percent property tax break on the Boxwood Road plant. That is worth approximately 1.4 million dollars.
To burnish its green credentials, Fisker has recycled more than 11 million pounds of steel, wood, aluminum and other materials collected during the refit.
By late June, the company said it had recycled some 400 truckloads of material, and will use the revenue to buy new materials and equipment. Wood from the original production line has been reused as flooring in the company’s U.S. headquarters in Anaheim, Calif.
Delaware’s elected representatives have called the plant a step toward reviving the state’s manufacturing economy, and adapting local skills to emerging green technologies at the factory that once produced Buicks, Oldsmobiles and Pontiacs.
“It is exciting to see that not only is the former General Motors plant being put back into use but that it will be manufacturing environmentally friendly electric plug-in hybrids,” said Sen. Chris Coons (D).
Louis Rosenberg, president of Mitchell Associates, a Wilmington design consulting firm, said his company is producing plans for the renovation of 20,000 square feet of office space, and for the plant’s exterior, in a contract worth “less than $100,000.”
Although the Fisker project doesn’t represent a major contract for Mitchell, which has annual revenues of about $3 million, it allows the company to sustain its current 30-strong work force, Rosenberg said.
“We are happy to have that in order to keep the people we do have,” he said.
Rosenberg also hopes the Fisker plant will be the source of more work as its operations expand. “We look at it as the beginning,” he said.
Quality Finishers Inc., a New Castle-based painting and property maintenance company, has three or four painters working full-time at the new plant in a contract that has been worth about $60,000 so far. Without the Fisker contract, the company might have had to let some workers go, said President John Stachowski.
“They would not have been working as much as they are,” Stachowksi said. “Now, they are on a full schedule.”
