Dongfeng Drops Bid in Fisker Due to US Government Conditions image

Chinese automaker Dongfeng Motor will drop bid for Fisker Automotive stake, leaving the troubled company without a secure financial banker.

Dongfeng will drop its bid for Fisker Automotive stake due to the automaker’s obligations to the US government, among which restoring jobs and capacity at the company’s Delaware plant, according to anonymous sources familiar with the matter. These exact conditions also put off Chinese automaker Zhejiang Geely, as they also make it impossible for foreign companies to move production of Fisker’s vehicles to other countries, especially China.

“In the end, what mattered to Dongfeng was being able to produce Fisker cars in China,” said one of the sources. “It became apparent over time that could not have been done with this deal.”

This was an important move for Fisker which has not manufactured a single vehicle since July. The automaker produces the $100,000-plus Karma plug-in hybrid at the Delaware plant, where employees are on a furlough this week to help the company cut costs.

The sources also said that Fisker was willing to sell off pieces of the company, among which the intellectual property rights for the plug-in electric hybrid technology and that CEO Tony Posawatz visited China earlier this week to try and convince Dongfeng and other suitors not to drop the bid.