Another green-tech stimulus recipient going under?

posted at 5:21 pm on June 19, 2012 by Ed Morrissey

It won’t be the first, if so … and probably not the last, either.  Battery maker A123 got more than $250 million in taxpayer subsidies from Barack Obama’s green-tech stimulus, specifically to produce a robust amount of product for Obama’s promised explosion of electric vehicles.  Unfortunately, the only thing exploding are A123′s losses.  CBS News’ Sharyl Attkisson reports that the company’s latest SEC filings admit “substantial doubt” about A123′s future — even while it spends the remaining $100 million in taxpayer-guaranteed funds (via The Right Scoop):

Herrera was among 1,000 workers who landed jobs at A123. CBS News spoke with CEO David Vieau last fall. “Approximately half the people here were unemployed, so we put people back to work,” he said.

But one month after that interview, A123 laid off 125 employees.

Then the luxury electric car Fisker Karma failed. It was powered by a faulty A123 battery. “It’s low, it’s sleek, it’s sensuous… it’s also broken! ” said Consumer Reports.

A123 was forced to launch an expensive recall — its second in four months. With $621 million in net losses since 2009, the company disclosed in SEC filings last month that there was “substantial doubt” about its “ability to continue.”

A123 has declined further interview requests.

I’ll bet.  The company wanted to do nothing but talk about a supposed major breakthrough on car batteries, but since the cars themselves aren’t selling, it’s mainly an academic point.  Even if A123 achieved a real breakthrough, it would take years to turn it into practical use, and clearly A123 doesn’t have years on its current trajectory.

Looks like the track record of government picking losers and losers continues.  Perhaps we should get the last $100 million out of A123 before it follows Solyndra into oblivion.


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specifically to produce a robust amount of product for Obama’s promised explosion of electric vehicles.

So they’re exploding now too?

squint on June 19, 2012 at 5:24 PM

How many does this make now? I’m really having problems keeping up.

sage0925 on June 19, 2012 at 5:24 PM

Investing in the future.

a capella on June 19, 2012 at 5:25 PM

this is a ‘going concern’ disclosure on public company financials. every start up gets one. esp since sarbox. when there are no revenues, or meager revs.

t8stlikchkn on June 19, 2012 at 5:25 PM

Dang it. I use A123 batteries in my SureFire flashlight.
Everything “O” touches goes to crap.

SnowSun on June 19, 2012 at 5:25 PM

Kewl…

… I have another name to teach my son that explains why he is $250,000 in debt at nine years old.

Seven Percent Solution on June 19, 2012 at 5:27 PM

We need pirate maps so we can find the booty before its gone. Arrr!

Or at least a finders fee for saving the public money.
Bane Capital

tomg51 on June 19, 2012 at 5:28 PM

this is a ‘going concern’ disclosure on public company financials. every start up gets one. esp since sarbox. when there are no revenues, or meager revs.

t8stlikchkn on June 19, 2012 at 5:25 PM

In Obama startups, ‘going concern’ is an oxymoron…..

itsspideyman on June 19, 2012 at 5:28 PM

Another green-tech stimulus recipient going under! George Kaiser and other Democratic re-election supporters/bundlers hardest hit! Film at 11!

GarandFan on June 19, 2012 at 5:30 PM

“Substantial doubt” is accountant speak for “man the lifeboats!”

tommyboy on June 19, 2012 at 5:31 PM

Whew… nevermind.
I was dyslexic. 123A batteries are what I use in the SureFire.

Confusing on purpose, I assume.

SnowSun on June 19, 2012 at 5:31 PM

Amazingly an ideologically based industry does not have a financial base.

Grunt on June 19, 2012 at 5:32 PM

Too bad about the lost jobs but, hey, maybe they can get temp jobs as hecklers until after the election.

Lily on June 19, 2012 at 5:32 PM

It’s sad to have to say this, because well it’s what they’re supposed to be doing anyway, but good job Sharyl!

gsherin on June 19, 2012 at 5:33 PM

Tossing up a brick.

iurockhead on June 19, 2012 at 5:35 PM

Can you imagine having one of the sensuous Fisker bricks in your garage? Its one thing to have an expensive gas guzzling muscle car but having a expensive powerless electric muscle car is just so Obama.

I did see a Volt on the road the other day btw.

DanMan on June 19, 2012 at 5:36 PM

It’s sad to have to say this, because well it’s what they’re supposed to be doing anyway, but good job Sharyl!

gsherin on June 19, 2012 at 5:33 PM

She is also the only one in the MSM (other than Fox) that is reporting on Fast n Furious. She’s got to feel out of place over there.

iurockhead on June 19, 2012 at 5:37 PM

These new Undertone ads are terrible.

p0s3r on June 19, 2012 at 5:38 PM

I’m thinking that the only impetus behind funding these companies was just to get them started, not to help them develop a sustainable business model. There are certainly some rich folks out there that made a killing off this green bubble, I would think. Now...all these bankruptcies…. what is going on??. I sense a pattern–it smells like fail, but was it made to look that way? I’m cynical and think that there is more than meets the eye.

ted c on June 19, 2012 at 5:38 PM

Anyone seen this?

a capella on June 19, 2012 at 5:39 PM

Anyone seen this?

a capella on June 19, 2012 at 5:39 PM

Ace had a post up about it. And I share his gloom about it. We all know what is going on, and yet there is nothing we can do until we get these corrupt usurpers out of the White House.

tom daschle concerned on June 19, 2012 at 5:41 PM

… I have another name to teach my son that explains why he is $250,000 in debt at nine years old.

Seven Percent Solution on June 19, 2012 at 5:27 PM

Expensive lesson don’t you think? Homeschool? Private? Public? Either of those would be cheap by comparison. ; ) Imagine the education little 7% could have with 250k, Now remind every liberal you know, on a daily basis. three times a day if you have the chance. I do.

Bmore on June 19, 2012 at 5:42 PM

Invest We Much

forest on June 19, 2012 at 5:42 PM

The recipients of the “green economy” payoffs are the real 1%!

reliapundit on June 19, 2012 at 5:43 PM

I did see a Volt on the road the other day btw.

DanMan on June 19, 2012 at 5:36 PM

I wonder if you buy a Chevy Volt, similar to when you buy a home, that the insurance company wants to know how far you are away from the nearest fire hydrant….

/questions.

ted c on June 19, 2012 at 5:43 PM

How many does this make now? I’m really having problems keeping up.

sage0925 on June 19, 2012 at 5:24 PM

We need a list along with loan guarentee amounts and the jobs created and then destroyed. It should include the time between the guarentee and the bankruptcy and how many people in the government warned the Government not to give the recipient money.

magicbeans on June 19, 2012 at 5:44 PM

Even if A123 achieved a real breakthrough, it would take years to turn it into practical use, and clearly A123 doesn’t have years on its current trajectory.

This is a sad but true reality. In A123′s case, they were probably rushed to get results and ended up introducing a product that should be tested and refined for another few years.

For other innovations, this current government is geared toward discouraging progress. It takes immense amounts of money, back-scratching, and lobbying to get a new idea into the market. The USPTO is a racket where the examiners continually move the goalposts for inventors by “inventing” new reasons to drag out the process and generate fees. The EPA places more and more impossible hurdles in front of innovators. The Underwriter’s Lab is a crock, along with the FDA. It’s all a big shakedown.

AubieJon on June 19, 2012 at 5:48 PM

The company wanted to do nothing but talk about a supposed major breakthrough on car batteries, but since the cars themselves aren’t selling, it’s mainly an academic point. Even if A123 achieved a real breakthrough, it would take years to turn it into practical use, and clearly A123 doesn’t have years on its current trajectory.

hell, we can talk academically on the supposed benefits of an advanced car battery here on HotAir—and occasionally, we do–and far cheaper I might add. I do believe that an academic exercise needs to be conducted on these companies and that is a post mortem examination of the money trails from funding requests to grants, to now where’s the $$ at……?

/questions.

ted c on June 19, 2012 at 5:48 PM

magicbeans on June 19, 2012 at 5:44 PM

My hero!

sage0925 on June 19, 2012 at 5:52 PM

ted c on June 19, 2012 at 5:38 PM

I think they were supposed to be viable until at least the Nov elections.

As you pointed out, if their business plans made sense, we wouldn’t need any gov’t help at all…if they were “iffy” but still had some private equity at risk, ok.

teejk on June 19, 2012 at 5:52 PM

The recipients of the “green economy” payoffs are the real 1%!

reliapundit on June 19, 2012 at 5:43 PM

Actually they are the .01%.

banzaibob on June 19, 2012 at 5:52 PM

specifically to produce a robust amount of product for Obama’s promised explosion of electric vehicles.

Yes,Obama kept this promise—the Volt.

hillsoftx on June 19, 2012 at 5:55 PM

Bmore on June 19, 2012 at 5:42 PM

Yeap…!

Seven Percent Solution on June 19, 2012 at 5:59 PM

How many Obama bundlers on their board?

PattyJ on June 19, 2012 at 6:00 PM

Well, if you Bible-clinging racists would just buy their stuff, this wouldn’t be an issue.
s/

The Enforcer on June 19, 2012 at 6:00 PM

These are examples of the graft, waste and liberal crony capitalism we have found out about.

Just think of the amounts we haven’t.

Opposite Day on June 19, 2012 at 6:00 PM

Bricked

Philly on June 19, 2012 at 6:01 PM

I’m thinking that the only impetus behind funding these companies was just to get them started, not to help them develop a sustainable business model. There are certainly some rich folks out there that made a killing off this green bubble, I would think. Now…all these bankruptcies…. what is going on??. I sense a pattern–it smells like fail, but was it made to look that way? I’m cynical and think that there is more than meets the eye.

ted c on June 19, 2012 at 5:38 PM

Money laundering. The money goes through these companies and winds up in Democrat campaigns around the country.

TarheelBen on June 19, 2012 at 6:03 PM

How many does this make now? I’m really having problems keeping up.

sage0925 on June 19, 2012 at 5:24 PM

Here you go:

http://www.thegatewaypundit.com/2012/06/green-scam-80-of-green-energy-loans-went-to-obama-donors-19-companies-went-bust-video/

FTA:”80% of Green Energy loans went to Obama donors.
The FOX News analyst says 70% in the video but actually 80% of DOE dollars went to Obama backers. 19 of these green energy companies went bust.”

dogsoldier on June 19, 2012 at 6:09 PM

How many Obama bundlers on their board?

PattyJ on June 19, 2012 at 6:00 PM

Boston Herald reported the senior management were heavy dem contributors.

dogsoldier on June 19, 2012 at 6:11 PM

Thank goodness that L0rd 0bama was not around during the dotcom boo-bust.

jukin3 on June 19, 2012 at 6:29 PM

Will Michelle Obama make a joke about it exploding?

Fallon on June 19, 2012 at 6:39 PM

Perhaps we should get the last $100 million out of A123 before it follows Solyndra into oblivion.

But then the board members and top executives (a/k/a Obama donors) wouldn’t get their multi-million dollar bonuses, and that seems to be the only point of propping up these companies with hundreds of millions of taxpayer dollars before they go bust.

AZCoyote on June 19, 2012 at 6:43 PM

Thanks to Uhhbama, “Green” will forever be linked with “Bankruptcy” and “Collusion” in the minds of most Americans.

TheClearRiver on June 19, 2012 at 6:47 PM

I bought a 100% electric powered car recently….comes with an antenna on top which takes the signal from my remote controller….

Varchild on June 19, 2012 at 6:50 PM

Herrera was among 1,000 workers who landed jobs at A123

Funny how we are workers getting jobs, then employees when the company goes belly up.

deptofredundancydept on June 19, 2012 at 6:58 PM

Romney needs to do a Solyndra style press conference just outside the gate of every failed green loan or stimulus recipient.

DAT60A3 on June 19, 2012 at 7:06 PM

The employees for these bankrupt company’s were nothing but cover.Now they get to collect unemployment for awhile and have no healthcare but Medicare.Guess who pays.

docflash on June 19, 2012 at 7:09 PM

The employees for these bankrupt company’s were nothing but cover.Now they get to collect unemployment for awhile and have no healthcare but Medicare.Guess who pays.

docflash on June 19, 2012 at 7:09 PM

Yep, resumes with Solyndra or A123 on them won’t get far. I feel sorry for any of them that naively left good jobs for the green-tech crap.

slickwillie2001 on June 19, 2012 at 7:57 PM

more campaign funds coming?

KOOLAID2 on June 19, 2012 at 8:01 PM

The “green” in green-tech sure doesn’t extend to the bottom line.

Bitter Clinger on June 19, 2012 at 9:07 PM

Ohmigosh! Who would have thought that cronies were behind Fisker battery design?

Government Motors: Purchase $102,000 vehicle. Toss in $10,000 more to get a battery replacement in 3-4 years. Leave the car off the charger for 3 months during the winter -or- use an extension cord for the charger, and voila the battery is bricked. The wheels on a Karma lock when the battery is dead, so getting it to the dealer is a prob. When you do get there, you are told that you need to spring for a new $40,000 battery pack, and the money you paid for battery replacement won’t cover it.

You know what else won’t cover a $40,000 repair? An auto loan. Pony up in cash, please. You havenot been warned.

PopsRacer on June 19, 2012 at 9:15 PM

Sure path to your first billion:

1. Find out what companies the government is backing. Put “green” companies at the top of this list.

2. Sell them short.

landlines on June 19, 2012 at 10:13 PM

Yep, resumes with Solyndra or A123 on them won’t get far. I feel sorry for any of them that naively left good jobs for the green-tech crap.

slickwillie2001 on June 19, 2012 at 7:57 PM

They may get slight preference over recent grads with degrees in “black studies” or “women’s studies”…or any other useless “diversity” degrees…only because they actually got a job, albeit a brief one.

landlines on June 19, 2012 at 10:17 PM

It’s too bad. A123 has been one of the real innovators in the battery industry.

Ward Cleaver on June 20, 2012 at 1:06 AM

Ironically, A123 builds batteries in Michigan, where you can’t use a batter powered car for about 9 months of the year because it’s so cold. When it get to be 10 to 30 below zero, batteries don’t work very well and anywhere 100 miles north of Detroit, it’s that for at least 5 months of the year and can be in the 20′s any month of the year.

flytier on June 20, 2012 at 6:58 AM

I did see a Volt on the road the other day btw.

DanMan on June 19, 2012 at 5:36 PM

Was it on fire?

raz0r on June 20, 2012 at 7:26 AM

Money laundering. Follow the money.

petefrt on June 20, 2012 at 8:00 AM

Unfortunately, the only thing exploding are A123′s losses.

Well, maybe their batteries also explode.

Then the luxury electric car Fisker Karma failed. It was powered by a faulty A123 battery. “It’s low, it’s sleek, it’s sensuous… it’s also broken! ” said Consumer Reports.

Really bad Karma, and we the people got fisked!

Yep, resumes with Solyndra or A123 on them won’t get far. I feel sorry for any of them that naively left good jobs for the green-tech crap.

slickwillie2001 on June 19, 2012 at 7:57 PM

Maybe they can get a job with Wawa.

Steve Z on June 20, 2012 at 9:37 AM