Chinese Company Geely Backs Out Of Fisker Automotive Deal, DoE Strings Get In The Way (UPDATE)

5 years ago by Jay Cole 3

A DoE Requirement To Re-Hire And Produce At Fisker's EX-GM Facility In Delaware Caused Geely Automotive To Back Out Of The Deal

A DoE Requirement To Re-Hire And Produce Atlantics At Fisker’s Ex-GM Facility In Delaware, Caused Geely Automotive To Back Out Of The Deal To Purchase The Automaker

Perhaps Henrik Fisker was right when he told reporters that he did not quit the company because of a takeover by a Chinese company when he said, “it was not specifically about the sale of the company,” because the deal with Geely, the apparent front-runner to purchase the maker of the extended range Karma has fallen through.

Henrik Fisker Quit His Day Job Last Week Running Fisker Automotive

Henrik Fisker Quit His Day Job Last Week Running Fisker Automotive

Reuters reports today that Henrik’s exit from the company did not play a major role in Geely’s final bid for the company being retracted, but rather that government strings attached to earlier loans made to Fisker make the proposition too complicated to navigate.

Geely, who already owns Sweden’s Volvo had taken the lead over Dongfeng Motor Group Co to buy the company, and had planned on closing the deal entirely by now.

However, the US Department Of Energy said the company had an “obligation to restore capacity and jobs at the firm’s Delaware plant according to a schedule imposed by the US government.” (Reuters)  And Geely could just not see their way to fulfill those requirements.

According to sources familiar with the negotiations, “Those obligations are too complicated to handle and seem too risky. The plan’s footprint was too big. It would take a long, long time to fill up the plant with products and restore employment there.”

Since news of Geely’s retraction from the deal, it is speculated that the two other Chinese companies (Dongfeng Motor Group and Wianxang) previously in the running to buy Fisker, may once again come to the table; provided they feel that they can ultimately satisfy the 2009 Department Of Energy loan requirements.

UPDATE: It now seems that one of the remaining Chinese bidders, Dongfeng Motor Group, has stopped pursuing the purchase of Fisker Automotive, too.

Reuters

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3 responses to "Chinese Company Geely Backs Out Of Fisker Automotive Deal, DoE Strings Get In The Way (UPDATE)"

  1. Schmeltz says:

    I can only imagine that those DOE loans Fisker received would cause all kinds of stickieness. But I have to wonder that Dongfeng and Wianxang wouldn’t have the same issues as Geely with buying Fisker?

    There comes a point when something is too broken, and Fisker appears at or beyond that point IMO. I really thought a few months back Sergio and company would pick Fisker up for a song. Apparently they aren’t interested even a little bit.

    What a mess.

    1. Jay Cole says:

      Probably some kind of compromise/partial payment is in order (as opposed to potentially outright bankruptcy at some point)…but sometimes that kind of logic is difficult to make big, and often slow-moving, government agencies understand.

      Do you want part of something, or all of nothing?

  2. evnow says:

    Probably the easiest way out is to have Geely pay back all the DOE loan right away. Then they should be free to do what they want with Fisker.

    I doubt anyone would want to open a auto manufacturing plant in Delaware, just because Biden is from there 😉