Special Coverage

Greater L.A. Auto Show

LOS ANGELES – Fisker Automotive Inc. plans to sell 15,000 Karma plug-in hybrid-electric vehicles annually beginning in 2011, and volumes are expected to climb dramatically two years later, when the company’s more affordable PHEV is slated for sale, CEO Henrik Fisker says at the auto show here.

First out of the chute is the Karma sedan in early third-quarter 2010, with a base price of $87,900, followed later by a convertible Karma and a third variant as well.

Initially, contract-assembler Valmet Automotive Inc. will build the Karma in Finland, but the next-generation model will be manufactured at the former General Motors Co. plant in Wilmington, DE.

When that will happen remains uncertain, but Henrik Fisker confirms earlier reports placing the next-generation Karma in the Wilmington plant in about 2016.

“It’s a little too early to talk about it, but normally you build a car for five, six years,” he says of the first-generation Karma.

But before the Karma program arrives in Wilmington, Fisker will have been producing a smaller vehicle in the plant for about four years as part of its so-called “Project Nina.”

Funded in part by a $529 million U.S. Department of Energy conditional loan, Project Nina intends to develop a family-oriented PHEV to be built in Wilmington beginning in 2012 and sold at about half the price of the Karma.

“We want to sell it for around $47,000, excluding the plug-in-hybrid tax credit,” Henrik Fisker says. “Factor in the credit, and the price is around $39,000. That’s where we start pricing.”

The Project Nina vehicle does not have a name yet, but the former BMW- and Aston Martin- brand designer is confident it will sell in volumes above 100,000 units annually at ramp-up. Three derivatives of the vehicle will be available, he says.

But a significant hurdle first must be cleared before the Wilmington plant can be retooled and move forward. The budding auto maker has yet to reach agreement on a labor contract with the United Auto Workers union, which has represented former GM employees.

Henrik Fisker says his chief operating officer is at the plant this week “for some final talks” with the union and to continue the due-diligence process. “We expect sometime in March to sign the final deal with getting the plant,” he says, adding the union contract should be finalized before the deal closes.

“We’ve had very good talks already with the UAW. They are very skilled labor. And we think with the right contract, which I’m sure we can get, we will have a very good team of workers ready to build cars when we move in so we don’t have to train people how to build cars.”

Henrik Fisker says he expects the UAW will continue representing workers at the factory. “I think they are ready to make the Delaware plant really a prime example of how an employer and the UAW can work together, because obviously we need to get competitive here in the U.S. We need to be able to manufacture cars.”

When asked how much he wants to pay workers in hourly wages in Delaware, Henrik Fisker says it’s too early to say.

“I don’t think it’s about pay cuts,” he says. “It’s about the overall contract, the length and the conditions of the contract; where do you need union workers. You don’t necessarily need union workers to maintain the facility or take out the trash.”

Henrik Fisker is getting the Wilmington facility at the bargain-basement price of $18 million, and he knows it’s a great deal. The plant’s current capacity is 300,000 units annually. A greenfield operation that size would cost at least $350 million.

“That would have been impossible for any startup a couple years ago,” he says. “This is a sign of the times, and it’s somewhat our luck that we can buy a fully functional plant for $18 million, where, alone, the paint line would cost $145 million.”

With the low value of the dollar, Henrik Fisker says his company must work quickly to ramp up domestic production, so vehicles can be exported at a profit.

“One thing the U.S. car companies traditionally have not done is design cars for export,” he says. “Our cars are particularly designed for export to Europe and the rest of the world.”

The auto maker expects to ship overseas 60% of Project Nina vehicles. “That’s one of the reasons we’re in Delaware, right next to the port.”

A battery supplier for the Karma will be announced by the end of this year, and Henrik Fisker says whichever company gets the Karma business likely will have the Project Nina contract, as well.

To date, the auto maker has assembled a team of 90 international suppliers and 45 U.S. retail outlets.