NEW YORK - The bankrupt shell of carmaker General Motors Co is making its first major asset sale, selling a Delaware manufacturing plant to Fisker Automotive, which will make plug-in hybrid electric cars beginning in 2012.
Fisker is using a $528 million U.S. government loan to overhaul the 62-year-old Boxwood Road plant in Wilmington, which made Pontiacs and Saturns before it was closed during GM's bankruptcy this year.
Fisker, which has signed a letter of intent to pay $18 million for the 3.2 million square foot property, expects to produce 75,000 to 100,000 vehicles per year. The plant is expected to create or support 2,000 factory jobs as production reaches full capacity in 2014.
GM broke into two companies during bankruptcy with certain assets emerging in July as the new GM and unwanted assets left under court protection as Motors Liquidation Co.
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, Henrik Fisker, Fisker Automotive's chief executive, said at the facility where the deal was announced.
Fisker was created in 2007 and utilizes the powertrain capabilities of Quantum Fuel Systems Technologies Worldwide Inc.
U.S. and overseas manufacturers are racing to deliver the first plug-in hybrids, which are viewed as the best near-term technology for transforming the American auto market.
Car buyers are demanding more fuel efficiency with gasoline prices high and the Obama administration and Congress, trying to reduce U.S. dependence on imported oil, are boosting funding for battery research and electric car production.
The auto industry is a cornerstone of the administration's efforts to promote and support Green Economy manufacturing, and the Delaware facility is the closet car plant to Washington.
We understood a new chapter had to be written, a new chapter in which we strengthen American manufacturing by investing in innovation, said Vice President Joe Biden, who joined Fisker at the plant to make the announcement.
Biden represented Delaware in the U.S. Senate before becoming vice president.
Ford Motor Co, electric car maker Tesla Motors and Nissan Motors have also received government loans for building advanced technology vehicles. GM and Chrysler have applied for funding.
The sale of the Wilmington facility is subject to a routine evaluation period and bankruptcy court approval. Proceeds will be placed in the GM estate, according to the AlixPartners restructuring firm.
This is a big day for Wilmington, a big day for the creditors in this case and, I believe, a good day for America, said Al Koch, the vice chairman of AlixPartners and Motors Liquidation chief executive.
Motors Liquidation has about 200 properties, many of which are plant sites or landfills.
Many of the properties could be repurposed, Koch told Reuters previously, with some former plant sites possibly becoming transportation hubs or unused land donated to nature conservancies.
It was unclear if the proceeds from the Boxwood Road sale would be earmarked for creditors or for the U.S. government, which extended some $50 billion of bailout and bankruptcy funding to GM this year.
The Wilmington plant was selected for its size, production capacity, world-class paint facilities, access to shipping ports, rail lines and available skilled workforce, Fisker said.
(Reporting by Chelsea Emery and John Crawley; Editing by Tim Dobbyn)