Electric car battery maker A123 Systems, of Obama-stimulus fame, files for bankruptcy
posted at 12:41 pm on October 16, 2012 by Erika Johnsen
Another day, yet another example of what happens when the government tries to “create” jobs based on its own ideological-political ambitions rather than allowing the free market to function based on efficiency and consumer choice.
This latest government-sponsored (read: taxpayer-sponsored) green-energy bust comes in the form of A123 Systems, a manufacturer of lithium-ion batteries for electric cars. The company received almost $250 million in grants (which pretty much means the feds cut the battery-maker a check, and if the company does indeed go bankrupt, that cash is gone) from President Obama’s stimulus in 2009, not to mention over $140 million from the state of Michigan in the form of tax credits and subsidies. Via Bloomberg, A123 failed to make a debt payment that was due yesterday:
The company listed assets of $459.8 million and debt of $376 million as of Aug. 31 in Chapter 11 documents filed today in U.S. Bankruptcy Court in Wilmington, Delaware. Chapter 11 is the section of the Bankruptcy Code used by companies to reorganize. …
A123, which received a $249.1 million federal grant in 2009 to build a U.S. factory, needed a financial lifeline after struggling with costs from a recall of batteries supplied to Fisker Automotive Inc., the plug-in hybrid luxury carmaker. A123 announced in August that it was working on a deal with Wanxiang Group Corp., China’s largest auto-parts maker, for financing in exchange for a majority ownership stake.
As an avid free-trader, I have zero problems with a foreign company that sees an opportunity exploring the possibility of investing in an ailing company — Americans don’t have much interest in buying electric cars, but maybe China has a demand where we don’t — but it’s kind of tragically hilarious that the Obama administration so often touts their renewable-energy “investments” as avenues towards making us “energy-independent” and more competitive with China. What’s more, President Obama, DOE Secretary Chu, and then-Michigan Governor Jennifer Granholm all hailed A123 specifically as an innovator helping to bring about the future green economy of their utopian (dystopian?) visions. 63,000 jobs? Not so much (h/t Washington Examiner):
Besides the government’s brazen disregard for free-market signals and taxpayer money, boss Emeritus Michelle Malkin has reported on the company’s sketchy crony-ish ties to Democrats — not that any of this will even faze the Obama administration’s “we do what we want”-attitude. If Mitt Romney wants to go for the jugular again on “green jobs” in tonight’s debate (which, I think, he definitely should; if more taxpayers were more aware of the many frivolous ways in which the Obama administration has been “investing” billions of our dollars, I think there would be a little more outrage), he’s got a fresh tailor-made example ready to go.
Breaking on Hot Air