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Another ‘Green’ Failure? Battery Maker That Received $249 Million From Admin. Files for Bankruptcy

Oct. 16, 2012 12:46pm

Battery Maker A123 Systems Inc. Files for Bankruptcy After Obama $249 Million Grant

​President Obama gives a speech with, from right, A123 Systems President and Chief Executive Officer David Vieau, A123 Systems electrical engineer James Fenton and A123 Systems design engineer Antonio Biundo in April, 2010. (Photo Credit: Associated Press)

Battery maker A123 Systems Inc. filed for bankruptcy protection on Tuesday, a little over three years after it received a $249 million grant from the Department of Energy to build its U.S. factories.

In September 2010 the president called the manufacturer to congratulate it on the “tremendous milestone” it represented in being able to mass produce advanced vehicle batteries, calling it the “birth of an entire new industry in America.”

“The work you’re doing will help power the American economy for years to come,” the president assured, adding how the company will help our “communities and our states and our countries…to thrive.”

Not only that, President Obama also thanked Secretary of Energy Steven Chu (who once said he wanted American gas prices similar to those in Europe) for “[getting] the money out the door quickly and wisely.”

As the Wall Street Journal notes, those words have a “particular sting” to them now, and will likely be coming to a presidential debate near you.

Battery Maker A123 Systems Inc. Files for Bankruptcy After Obama $249 Million Grant

U.S. Secretary of the Treasury Timothy Geithner participates in a working lunch with prominent businessmen, including Desh Deshpande of A123 Systems, in June, 2011 at the Department of the Treasury. (Photo Credit: Getty Images)

Republicans are likely to use the latest taxpayer-funded failure to criticize the Obama administration’s generous funding of alternative energy companies, which they say is either a waste of money or a crony way to funnel money to Obama donors.  Critics point to Solyndra LLC in particular, a politically connected and now-bankrupt solar power company, which left taxpayers on the hook for $528 million.

A123 has struggled for several years after a number of bad investments like the Fisker Karma, which– though it retailed for about $100,000– has a reputation of bursting into flames.  Though A123 lost $83 million in the second quarter, it announced a $450 million lifeline from Chinese auto parts maker Wanxiang Group Corp. two months ago, but the deal was scrapped.

Using its federal stimulus grant, the company set up manufacturing operations in the Detroit suburbs of Livonia and Romulus, Mich.  However, unlike a loan, the company’s $249 million government grant does not have to be repaid. A123 only had to match the grant money as it was used.

So far the company has drawn about $129 million of the grant, spokesman Dan Borgasano said Tuesday.

Johnson Controls will get A123′s automotive assets for $125 million, including lithium-ion battery technology, products and customer contacts. It will also take over the factories in Michigan, cathode ray factories in China and an equity interest in a Chinese battery company.

In 2009, Energy Secretary Steven Chu called the company “one of the success stories of a high-technology company that was funded with government funds,” and “the model of what we want to happen on a bigger scale.”

​The Associated Press contributed to this report.

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Comments (96)

1 2 3
  • PlanetReality
    Posted on October 16, 2012 at 1:52pm

    OY VEY!!! Vote him out!!!

    Report this comment

    PlanetReality  
    • SocialistSlayer
      Posted on October 16, 2012 at 6:25pm

      Failure – Must be Commie obama’s middle name!

      Report this comment

      SocialistSlayer  
    • db321
      Posted on October 16, 2012 at 6:25pm

      Is the US out of Money Yet!

      Report this comment

      db321  
    • Shootwice
      Posted on October 17, 2012 at 6:20am

      The $249 million allowed this loser company to roll into town and raid good companies of good people working on viable automotive projects. How many investors also got duped into investing in A123 by the administration’s propaganda?

      Report this comment

      Shootwice  
    • rickc34
      Posted on October 17, 2012 at 11:33am

      Is anybody really surprised that Obama has picked nothing but losers? has cost the tax-payers billions of dollars. Has he done anything right since becoming President?

      Report this comment

      rickc34  
  • Gonzo
    Posted on October 16, 2012 at 1:23pm

    Obama doesn’t pick winners and losers…just the losers. Hey Barry, I hope you don’t become a stock broker after you’re fired. from your present position.

    Report this comment

    Gonzo  
    • Eastinfection
      Posted on October 16, 2012 at 1:52pm

      I’m sure he’ll just go back to “Community Agitating” for SEIU
      Once a pimp, always a pimp.

      Report this comment

      Eastinfection  
    • 2MINUTESTOMIDNIGHT
      Posted on October 16, 2012 at 1:55pm

      I would prefer he end up making license plates somewhere.

      Report this comment

      2MINUTESTOMIDNIGHT  
    • DIR
      Posted on October 16, 2012 at 2:09pm

      It must be fun loosing this kind of taxpayer money. Barry and his should be charged with ‘super grand’ theft. I wonder how many companies have bought it (gone busto)? It would probably be easier to list all Barry’s financial successes. That would be himself and Moocow.

      Report this comment

      DIR  
    • AvengerK
      Posted on October 16, 2012 at 2:45pm

      Boy that Stephen Chu really knows how to pick ‘em. Obama bet the farm on his green energy dreams but he was betting with someone else’s money. Now…Chu’s bad enough…just think if Van Jones was still “Czar of Green Jobs”?

      Report this comment

      AvengerK  
    • PaxInVeritate
      Posted on October 16, 2012 at 4:01pm

      AVENGERK… it would be the same results.

      Report this comment

      PaxInVeritate  
    • bannedfromCNN
      Posted on October 16, 2012 at 4:46pm

      Maybe, just maybe, the “Magik Knee grow” isn’t so ‘magical’ anymore…

      Report this comment

      bannedfromCNN  
  • Hiswill
    Posted on October 16, 2012 at 1:20pm

    Now we have Raser Corp. Geothermal, 33 million Dollars, Bankrupt
    Solyndra $535 mil, Bankrupt
    Beacon Power, 43 million dollars, Ch. 11
    SunPower, 1.2 billion dollars, struggling
    Evergreen Solar, 58 million, Bankrupt
    Abound Solar, 70 million dollars, Bankrupt.
    My favorite one is this: “Turns out a California-based “green jobs” firm with a troubled financial history got a $1.4 billion Energy Department loan guarantee — three times the size of Solyndra’s jackpot — despite mountains of debt, .And it turns out that the principal private investor in BrightSource Energy, the lucky recipient, is a company called VantagePoint — whose “venture partners” include Robert F. Kennedy Jr.” http://www.nypost.com/p/news/opinion/editorials/greasing_the_solar_skids_yf8pKoJEcktj7gUSFOWurO

    And the list goes on. Obama, please stop raiding our piggy bank.

    Report this comment

    Hiswill  
    • Cavallo
      Posted on October 16, 2012 at 1:26pm

      Wish I would have had the lack of ethics and the foresight to get into the racket while it was fresh. Start a “green” company, get tax money, bankruptcy, bail with billions under your belt. Retire in some tax free haven overseas.

      Report this comment

      Cavallo  
    • The Jewish Avenger
      Posted on October 16, 2012 at 1:48pm

      I’m going to start one where I use jello wrestling in a sealed undergroud area to create Geo-Thermal for 20 million people, I just need 3.69 Billion to dig the hole and surround it with saran wrap… oh and a garden hose for delivery of course.

      Report this comment

      The Jewish Avenger  
  • PaxInVeritate
    Posted on October 16, 2012 at 1:17pm

    And the music keeps playing while the ship sinks. “Explosion in Boiler Room 2 Sir!” “Let it burn… let it burn.”

    Report this comment

    PaxInVeritate  
  • TEIN
    Posted on October 16, 2012 at 1:16pm

    Energy Secretary Steven Chu called the company “one of the success stories of a high-technology company that was funded with government funds,” and “the model of what we want to happen on a bigger scale.”
    Chu might be a brainy-nerd with physics and engineering, but a complete idiot with business. Seriously, high-tech company making batteries?? So, this countries whole energy platform is supposed to be based on windmills, solar cells, and batteries?? Mr. Chu..if these items were feasible and a promising alternative…they would have been developed and used 60 YEARS AGO!!!! The greedy oil companies would already have cornered the market on them!!!

    Report this comment

    TEIN  
  • mary12153
    Posted on October 16, 2012 at 1:14pm

    This is not a failure. This is a successfully executed money laundering scheme.

    Report this comment

    mary12153  
  • IMCHRISTIAN
    Posted on October 16, 2012 at 1:14pm

    In the real world this would embezzlement. It the political world it is “somebody else did it”.

    Report this comment

    IMCHRISTIAN  
    • IMCHRISTIAN
      Posted on October 16, 2012 at 1:24pm

      Corr – In the real world this would be embezzlement. In the political world it is “somebody else did it”

      Report this comment

      IMCHRISTIAN  
  • chips1
    Posted on October 16, 2012 at 1:09pm

    Well, there’s another black mark on Obama’s record.

    Report this comment

    chips1  
  • elosogrande
    Posted on October 16, 2012 at 1:08pm

    Number 1 in arrogance, corruption, and incompetence! Who would’ve thunk we’d have two triple crown winners in the same year?

    It’s time everyone looked behind this guy to see what he has left in his wake. He and his buffoon of a Vice-President have fouled our country in unimaginable ways, and they have done it at a monumental cost to us all. Some of these costs are far greater then the five or six trillion dollars the Democrat Party has pissed away buying their needed votes.

    Report this comment

    elosogrande  
  • Metalstr8jckt
    Posted on October 16, 2012 at 1:07pm

    Odds are in Vegas that Obama can rig any game…Especially when he bets all of America’s money on “red”(Green/Communism) Betting my money on “stupid” and letting it ride. That guy is “drunk” on power, and needs to be shown the front door, with a foot to his backside for emphasis.

    Imploding the economy with projects that appear well intentioned. every communist revolution is preceded by an economic collapse.

    Obama plays the idiots well.

    Vote him out.

    Report this comment

    Metalstr8jckt  
  • taxpro4u03
    Posted on October 16, 2012 at 1:05pm

    Mr Obvious —-> http://www.youtube.com/watch?v=5XZMC1M9o04

    Report this comment

    taxpro4u03  
  • HKS
    Posted on October 16, 2012 at 1:05pm

    I personally have little faith in batteries ever being a solution to our energy needs. Electricity is an energy that works best when used as generated. Storage of it will always be a novelty per say. In the case of the Fisker and the Volt I would suspect that at least with the Fisker, which I am more familiar, that car is a classic on it’s own with any power plant, throw out the battery stuff and use a little bigger engine and it will sell like hotcakes, gorgeous car, drives like a dream.

    Report this comment

    HKS  
  • thibx
    Posted on October 16, 2012 at 1:02pm

    the next time you tell us to bend over at least get the vasaline.

    Report this comment

    thibx  
  • woodyee
    Posted on October 16, 2012 at 1:01pm

    “Of course, Gaybama is NOT a failure, and neither are these ventures. The problem is, we just didn’t “invest” enough funds into these projects.”

    How’s my imitation of a Lib going fellas?

    Report this comment

    woodyee  
    • HKS
      Posted on October 16, 2012 at 1:06pm

      Mo money, mo money.

      Report this comment

      HKS  
    • 2MINUTESTOMIDNIGHT
      Posted on October 16, 2012 at 1:09pm

      Are you sitting in your mother’s basement in your underpants, shooting goblins on your X-Box with a bag of weed?

      Report this comment

      2MINUTESTOMIDNIGHT  
    • woodyee
      Posted on October 16, 2012 at 1:52pm

      @ 2minutes – no, son, it’s YOUR mama…you don’t look like her…

      Report this comment

      woodyee  
    • 2MINUTESTOMIDNIGHT
      Posted on October 16, 2012 at 2:03pm

      Woodyee: Not sure you understood my comment. You asked if you got your “Lib” impersonation right. I was simply asking for clarification in order to answer your question.

      Report this comment

      2MINUTESTOMIDNIGHT  
    • woodyee
      Posted on October 16, 2012 at 2:14pm

      @2 minutes

      Please accept my sincere apology. I suppose we should ALL be a little clearer with HOW we draw our posts; what with all the trolls…

      I’m sorry, 2Minutes.

      Report this comment

      woodyee  
    • 2MINUTESTOMIDNIGHT
      Posted on October 16, 2012 at 2:30pm

      No problem Woodyee.

      Report this comment

      2MINUTESTOMIDNIGHT  
    • AvengerK
      Posted on October 16, 2012 at 4:46pm

      WOODYE..you need to be more hateful, show a lot more contempt and and some elitism. Perhaps if you implied that someone will be denied cancer treatment or they kicked a puppy..you know..something along those lines. Then make sure you say “rights” a lot. A right to this..a right to that…you know how it goes.

      Report this comment

      AvengerK  
  • The-Monk
    Posted on October 16, 2012 at 1:01pm

    “So far the company has drawn about $129 million of the grant….”

    I wonder where that other $120M is?

    Report this comment

    The-Monk  
  • phrogdriver
    Posted on October 16, 2012 at 12:58pm

    “the model of what we want to happen on a bigger scale.” Steven Chu

    Yep, it certainly is.

    Report this comment

    phrogdriver  
    • Yeah_Buddy
      Posted on October 16, 2012 at 1:09pm

      You beat me to mocking this comment. What a bunch of bafoons. You couldn’t throw darts at a board and hit so many bad decisions as Obummer’s inept team of ideologs.

      I heard Lithion battery technology is dead anyway.

      Report this comment

      Yeah_Buddy  
  • 2MINUTESTOMIDNIGHT
    Posted on October 16, 2012 at 12:58pm

    Another POS funded by the biggest POS (BHO) using my money.

    Report this comment

    2MINUTESTOMIDNIGHT  
  • The_Jerk
    Posted on October 16, 2012 at 12:58pm

    You’re looking at this from the wrong perspective. You call this a failure. Through Alinsky’s eyes this is success. Use the government to finance your goals. Increase the debt. Increase costs. Break the economy.

    Alinsky ain’t Muslim, but like Marx he was Jewish. Just say’en.

    Report this comment

    The_Jerk  
  • SCREW-WINDOWS
    Posted on October 16, 2012 at 12:56pm

    If the president assured you it is the kiss of death.

    Report this comment

    SCREW-WINDOWS  
  • diversity
    Posted on October 16, 2012 at 12:55pm

    wtf

    Report this comment

    diversity  
  • The-Monk
    Posted on October 16, 2012 at 12:55pm

    A123 ????

    If you’re going to scam to American people out of their tax money at least come up with a clever name….

    Report this comment

    The-Monk  
  • RJJinGadsden
    Posted on October 16, 2012 at 12:55pm

    Ahhh, Campaign contributions, kick backs. Just semantics these days.

    Report this comment

    RJJinGadsden  
  • oicu814me2
    Posted on October 16, 2012 at 12:55pm

    Another Dawin award.

    Report this comment

    oicu814me2  
  • Snowleopard {gallery of cat folks}
    Posted on October 16, 2012 at 12:54pm

    No surprise here.

    Report this comment

    Snowleopard {gallery of cat folks}  
  • Sonicviewlover
    Posted on October 16, 2012 at 12:49pm

    Who would have thought?

    Report this comment

    Sonicviewlover  
1 2 3

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