Thursday, November 1, 2012

News Critical of Obama Admin Subsidized But Now Bankrupt Battery Maker A123

by Sam Adams MMIV, ARRA News Service:  The Washington Times reported yesterday, “The recent bankruptcy of battery maker A123 Systems after it won a nearly quarter-billion-dollar federal grant threatens the business prospects of another well-known government-backed company: luxury car manufacturer Fisker Automotive. Fisker has received nearly $200 million in federal loan money in recent years, but one of its signature vehicles is powered by batteries that come off the assembly line of bankrupt A123 Systems. And now A123 wants to get out of its contract with Fisker, according to court records. . . . The problem for Fisker is that the car manufacturer has no short-term suppliers for the batteries that help power a high-end sports sedan it makes called the Karma. . . . The Energy Department has, through loans or grants, been generous to both companies.”

So it looks like the bankruptcy of another company that the Obama administration’s Energy Department used taxpayer money to subsidize is affecting another company that got federal assistance from the Energy Department.

But that’s not the only issue arising from the bankruptcy of A123. According to The Wall Street Journal, “A123 Systems Inc., the electric-car battery maker that recently filed for bankruptcy, is seeking emergency approval to tap a $50 million loan provided by a Chinese auto parts maker to fund its Chapter 11 case pending an auction of the clean energy firm. Lawyers for A123 Systems said Sunday in a bankruptcy court filing that Chinese auto parts maker Wanxiang Group Corp. will provide the so-called debtor-in-possession financing, replacing initial lender Johnson Controls Inc. Wanxiang's bankruptcy loan, which cuts the interest rate to 12% from 15% from Johnson Controls' initial offer, comes as a bidding war heats up between the two companies vying for the Massachusetts-based battery maker's assets.”

Reuters notes, “The Obama administration's investment in the advanced battery sector created just over 12,000 jobs, costing nearly $160,000 per position, according to an analysis from two Republican senators released on Wednesday. Republicans have blasted President Barack Obama's efforts to jumpstart clean energy development, accusing the administration of wasting taxpayer dollars on well-connected companies with little hope of success. The administration's advanced battery initiative, which awarded $2 billion in funding under the 2009 stimulus package to help expand U.S. manufacturing capacity, has come under fire in recent weeks after the bankruptcy of government-backed battery maker A123. Using government data, Republican Senators Chuck Grassley and John Thune said the program created 12,613 jobs at a cost of $158,557 per job. ‘The expense is significant, especially when many of the jobs were temporary,’ Grassley said in a statement. ‘The administration should not overstate the value of this program as a boon to economic recovery.’”

In other words, another green energy company touted by the Obama administration was given millions in taxpayer dollars by the Energy Department and subsequently went bankrupt. That company may now be dragging down another company the Energy Department has given federal assistance to. And the bankrupt company is now turning to Chinese companies for cash. Meanwhile, Republican senators have pointed out that the program the Obama administration used to prop up this company cost nearly $160,000 for every position created, and many of those positions are now being lost.
Sam Adams MMIV is the pen name for un-named beltway sources. While receiving information from many sources, this Sam's words sometimes need to be credited. Thanks to all the Adams patriots who speak up for America.

Tags: Sam Adams MMIV, ARRA News Service, news sources, criticism, Obama Administration, subsidized, Battery Maker A123, Fisker Automotive, China, Wanxiang Group Corp, bankrupt, wasted tax money To share or post to your site, click on "Post Link". Please mention / link to Conservative Voices. Thanks!

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