WHYY Newsworks reported that U.S. Bankruptcy Court in Delaware has ordered an auction of assets of Fisker Automotive after two Chinese companies worked to acquire the federal loan for the company.
Fisker fell victim to a host of problems after obtaining the federal loan that was to have been used to build a mid-sized hybrid automobile in Delaware. The company offered “plug in hybrids that combined electric power with a small engine.
By contrast, Tesla, a fully electric car, has prospered, although it has also faced challenges including reports of battery fires that plagued Fisker.
The auction came after Wanxiang America held out the hope that the former GM Boxwood plant in Delaware could make a car. The other company, Hybrid Technologies wanted to sell the plant. Wanxiang now the company that made batteries for Fisker.
“On behalf of the people of Delaware, I want to thank the court for its decision,” said U.S. Sen. Tom Carper. “The loss of both of Delaware’s auto assembly plants within months of each other five years ago was gut-wrenching for me and many Delawareans. The judge’s decision does not ensure that the Boxwood Road plant will come back to life in a few years to produce breathtakingly beautiful, energy efficient automobiles. What it does mean, however, is that Wanxiang America, Inc., a Chinese company with strong financial resources, business operations in 14 states, and a deep interest in reopening the Boxwood Road plant, will now have a fighting chance to make that happen.”
The state lost both of its auto plants in 2008 and 2009 when the Chrysler and Boxwood plants closed.
Fisker was started in California by automotive designer Henrik Fisker and managed to raise more than $1 billion. However, the company burned through that cash. By contrast, Tesla had the resources of entrepreneur Elon Musk who has launched other successful companies including a space transport company.
The auction also opened up the possibility that the state might be able to recover a larger portion of its $20 million in loans that went to Fisker.
Click on the link below for the story from Newsworks.
