Updates
November 16, 2012: A123 received almost $1 million (auto-pilot disbursement) on very day it filed for bankruptcy.
The Obama administration provided struggling battery maker A123 Systems Inc with nearly $1 million on the day it filed for bankruptcy, the company told lawmakers investigating its government grant.
The company, which makes lithium ion batteries for electric cars, filed for Chapter 11 bankruptcy protection last month after a rescue deal with Chinese auto parts supplier Wanxiang Group fell apart.
That same day, October 16, A123 received a $946,830 payment as part of its $249 million clean energy grant from the Energy Department, ...I guess it's the principle of the thing. $1 million / $249 million --> 0.4 percent. Also, one million dollars is about as much as it costs for the Obamas to go to Paris for the weekend. In other words: it is so inconsequential, it does not matter. Posted for archival purposes only.
October 16, 2012: A123 declares bankruptcy; automobile business assets bought by Johnson Controls.
August 9, 2012: A123's angel? China.
Early in 2012 President Barack Obama responded to critics of his multi-billion-dollar green technology initiative by saying he was "not going to cede the wind or the solar or the battery industry to China."June 17, 2012: CBS Nightly News had this story on A123.
Six months later, he faces that very real possibility for the U.S. car battery industry, a once-high flying sector buttressed by generous federal grants, but struggling with a green car market that has fallen far short of expectations.
A123 Systems Inc on Wednesday became the second U.S. government-backed battery maker this year to go overseas for a lifeline - and it turned to China. Auto parts supplier Wanxiang Group will take a controlling interest and invest $450 million in the Massachusetts-based battery maker, which faced running out of cash by the year-end.
Earlier this year, Ener1 Inc, another battery maker that received a government green technology grant, emerged from Chapter 11 bankruptcy under the control of Russian investor Boris Zingarevich. New York-based Ener1 is also a joint-venture partner in China with a Wanxiang subsidiary.
A123 has declined further interview requests. As for that battery breakthrough announced this week, many analysts seemed underwhelmed.February 24, 2012: another "green company" in financial trouble; $400 million in stimulus money; lays off 125; increases pay for top executives; this time it's A123 in Boston, a battery company, the company's primary customer, Fisker Automotive, is also struggling financially;
"These new technologies that are introduced have to be vetted over a number of years before they actually find their way into products," said Theodore O'Neill of Wunderlich Securities. "So the product itself is interesting, but doesn't do anything to solve the financial problems that A123 has."
A123 isn't giving up. It still has more than 100 million federal stimulus tax dollars left to spend. Recently the company said it will hire 400 people -- not to build batteries for electric cars, but for power grids.
February 17, 2012: Democratic National Convention co-chair received $230 million in "green stimulus" money.
February 15, 2012: Venture capitalists on Obama's team explains the solar debacle.
Sanjay Wagle was a venture capitalist and Barack Obama fundraiser in 2008, rallying support through a group he headed known as Clean Tech for Obama.
Shortly after Obama’s election, he left his California firm to join the Energy Department, just as the administration embarked on a massive program to stimulate the economy with federal investments in clean-technology firms.
Following an enduring Washington tradition, Wagle shifted from the private sector, where his firm hoped to profit from federal investments, to an insider’s seat in the administration’s $80 billion clean-energy investment program.
He was one of several players in venture capital, which was providing financial backing to start-up clean-tech companies, who moved into the Energy Department at a time when the agency was seeking outside expertise in the field. At the same time, their industry had a huge stake in decisions about which companies would receive government loans, grants and support.
During the next three years, the department provided $2.4 billion in public funding to clean-energy companies in which Wagle’s former firm, Vantage Point Venture Partners, had invested, a Washington Post analysis found. Overall, the Post found that $3.9 billion in federal grants and financing flowed to 21 companies backed by firms with connections to five Obama administration staffers and advisers.
Original Post
Link here to Reuters article. Lightweight solar product maker Energy Conversion Devices Inc filed for bankruptcy protection on Tuesday, the latest in a string of solar companies that have collapsed in an industry shakeout.The dots are starting to connect. A long laundry list of solar energy companies were given loans, grants, tax breaks, etc., by the federal government all about the same time. They all had a similar business plan, and right on cue, they all foundered about the same time, about the time the taxpayer money ran out.
The company, whose filing follows years of losses and months of public discussions with bondholders, said it would sell its United Solar Ovonic unit and other assets in bankruptcy.
Energy Conversion, whose solar laminate products are used for panels on rooftops and buildings, said it would continue to operate during the sale process.
Energy Conversion's failure is the fourth major bankruptcy in the industry in the past year. Evergreen Solar Inc, Solyndra and SpectraWatt have also sought Chapter 11 protection.
My hunch is that if the current president is re-elected, these companies will get a new lease on life, and the process will start anew.
It should be noted that bankruptcy does not occur overnight. Although the bankruptcies come when natural gas prices are in free fall, these solar companies couldn't even make it when natural gas prices were (a bit) higher and when these solar companies had the venture capital and tax breaks on their side.
What will be the Stimulus, Energy Department venture capital loss be this time? No doubt the Presidents cronies will find a way to get payed nicely. Then they can contribute to his large campaign fund so the country can have four more years of this outstanding leadership.
ReplyDeleteWhere will Energy Department stimulus money go next? It's my impression that these folks go back to the well over and over. They will go back to the renewable companies they already know; those folks have a great gift of gab and a compelling story to tell. And it feels good to give millions of dollars in taxpayer money to your friends, even if their won't be anything to show for it four years down the road.
Delete