News Column

Another Blow for Green Energy

Oct. 17, 2012

By Wendy Koch

electric cars

An electric vehicle battery maker that was awarded $249 million in federal stimulus funds filed for Chapter 11 reorganization on Tuesday, giving GOP presidential candidate Mitt Romney potential ammunition to attack President Obama's green-energy subsidies.

The Waltham, Mass.-based company, A123 Systems, filed for bankruptcy protection in Wilmington, Del., a day after it said it would be unable to make a debt payment. It's selling its automotive assets to Milwaukee-based auto-parts maker Johnson Controls, which may enable it to continue operating two factories in the Detroit suburbs of Livonia and Romulus.

As electric vehicle sales remain sluggish, the rechargeable lithium-ion battery manufacturer has struggled. It took a hit when the batteries it supplied for Fisker Automotive's luxury plug-in Karma stopped running during a Consumer Reports test drive, prompting a recall. In August, it announced an investment deal with Chinese auto parts maker Wanxiang Group, but the deal collapsed.

Its Chapter 11 filing will likely spur further GOP criticism, which escalated once solar panel manufacturer Solyndra filed for Chapter 11 protection in September 2011 after receiving more than $500 million in federal loan guarantees.

In the first presidential debate Oct. 3, Romney called four aid recipients "losers," including Solyndra, Fisker, EV car maker Tesla Motors and auto battery manufacturer Ener1.

"You don't just pick the winners and losers, you pick the losers," Romney told Obama in a sharp exchange.

On Tuesday, Romney campaign spokeswoman Andrea Saul called A123's bankruptcy "yet another failure for the president's disastrous strategy of gambling away billions of taxpayer dollars on a strategy of government-led growth that simply does not work."

The Department of Energy said those investments have had bipartisan support, pointing to a May 2009 letter, signed by GOP and Democratic members of Michigan's congressional delegation, in favor of the grants to A123 and three other companies.

Because of DOE investments since 2009, department spokesman Dan Leistikow said, the cost of a battery with a 100-mile range has been halved -- to $17,000 -- and is expected to drop to $10,000 by 2015. One other recipient, Ener1, has filed for bankruptcy protection but continues operating.

Leistikow notes that A123's sale to Johnson Controls means its facilities and technology will remain "a vital part" of America's advanced battery industry.



Source: Copyright USA TODAY 2012


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