Boxwood Road Plant

General Motors laid off more than 450 workers when it closed its Boxwood Road manufacturing plant in summer 2009. Fisker Automotive plans to use the facility to make plug-in hybrids, employing about 1,500 people.

Vice President Joe Biden will announce tomorrow that Fisker Automotive will build plug-in hybrid cars at a Delaware plant formerly run by General Motors. The use of the GM plant by Fisker, an unproven California-based start-up, is an ironic symbol of the new era of competition for next-generation green cars—pitting small innovative companies against the world’s largest carmakers.

Fisker’s plant will be used to produce a future $48,000 plug-in hybrid that will compete against GM’s Chevy Volt, which will be offered at a similar price. Both vehicles are likely to benefit from a $7,500 consumer tax credit.

The 3.2 million-square-foot Delaware facility is expected to employ about 1,500 employees and have the capacity to produce 100,000 of the more affordable future plug-in hybrids, developed under a program called Project Nina. The new Fisker will be a follow-up to the limited-run $87,000 Fisker Karma expected next year.

Government-Backed Competition

Fisker received approval for a $528.7 million government loan to develop its two plug-in cars, with the majority of the funds supporting production of the future less expensive plug-in hybrid. General Motors will also receive government backing, more than $240 million in grants—rather than loans—including $106 million for its planned battery pack assembly factory in Brownstown Township. The company will also receive grants of $30.5 million to demonstrate as many as 5,000 Chevrolet Volt cars with electric utilities and a limited number of consumers, and $105 million for electric for electric drive component-manufacturing facilities. These grants are in addition to $30 billion supplied by the federal government to restore the company from bankruptcy.

The federal government, in essence, is pitting incumbent auto industry titans against young start-ups in an effort to stimulate competition and foster a race for US-produced fuel-efficient cars. During the 2008 presidential race, President Obama set forth a national goal of putting 1 million plug-in hybrids on US roads by 2015.

Fisker’s car and the Chevy Volt are both plug-in hybrids, powered by a combination of batteries recharged by household current and an internal combustion engine. The Karma uses a blended approach, in which electricity and gas could be used separately or in combination—while the Volt is a series plug-in hybrid that only uses electricity to power the wheels, with the gas engine exclusively employed to recharge the on-board battery pack.

The former GM plant, established in 1947 and shuttered in summer 2009, had produced the Saturn Sky and Pontiac Solstice roadsters, as well as an Opel version that was exported to Europe.

The White House said Sunday that Biden, a former senator from Delaware, will make the announcement in Wilmington, Del., along with Delaware Gov. Jack Markell and state officials.