Former Chrysler Sells Delaware Durango Plant; GM Sells Its Delaware Plant
By Michelle Krebs October 28, 2009
The state of Delaware was the scene of some historic and trend-setting events this week, as the "old" business entities of General Motors Co. and Chrysler Group LLC both sold cast-off assembly plants as the companies as part of the companies' rapid downsizing.
The site of Chrysler's assembly plant in Newark will be sold to the University of Delaware for a new research center. The plant, which most recently built the Dodge Durango and Chrysler Aspen SUVs, was sold to the university for $24.25 million, according to the Delaware News Journal.
And on Tuesday, Fisker Automotive - a California start-up planning to make a high-tech extended-range electric sport sedan next year - bought from the former General Motors Corp. (now known as Motors Liquidation Co.) an assembly plant in Wilmington. That plant, constructed in 1947, most recently built the Pontiac Solstice and Saturn Sky (as well as the exported Opel Roadster) 2-seat sportscars.
Fisker, which plans to make a plug-in hybrid family sedan at the Wilmington site for sale in 2012, paid $18 million for the plant.
For the University of Delaware, the deal culminates months of negotiation, first with Chrysler then with Old Car Co., the name of the entity now holding Chrysler's assets. Reports say the sale of the site was complicated by the need to determine the extent of required remediation of contaminated areas.
Chrysler originally intended to sell the site to the university then lease it back in order to make the required cleanup and demolish structures. But Chrysler's trip through bankruptcy court complicated the situation, reported Delaware's News Journal, as did the fact Chrysler intended to remediate the site only to an "industrial" standard, a level of environmental cleanup unsatisfactory for the university's use.
Ultimately, the university determined it could qualify for remediation funding of brownfield sites and undertake the environmental cleanup itself. The result was a simplified deal that also led to the university's bargain-basement price for the 240-acre plant site.
When Chrysler and GM initiated the bankruptcy proceedings, many wondered what, if any, entities might step up to acquire the various plants the companies intended to discard, given the auto industry's overarching overcapacity and the likely environmental contamination of many of the sites. But at the transaction prices demonstrated by these early deals, it seems obvious there indeed will be interested buyers. - Bill Visnic, Senior Contributing Editor
Photo by Chrysler
Workers at Chrysler's Newark, Del., built the now-defunct Chrysler Aspen in better days.
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