• Oct 16th 2012 at 10:40AM
  • 391
President Obama speaks with A123 CEO David Vieau to his... President Obama speaks with A123 CEO David Vieau to his right. (Credit: AP).
Electric car battery maker A123 filed for bankruptcy today, just a few hours after warning it was about to default on its loans, and will be taken over by auto supplier Johnson Controls.

As a recipient of $249 million in grants from the Obama administration, the company's bankruptcy will no doubt become another embarrassment heading into the November elections. Republicans have already battered the Obama administration for investing $535 million in solar panel maker Solyndra, only to see the company fail just two years after receiving the loan. The company shut its doors and fired all its workers in August 2011. But it is also litigating against Chinese solar panel makers, charging that China illegally "dumped" solar panels into the U.S. at a loss to drive makers like Solyndra out of business.

The U.S. has only paid out $132 million of the A123 grant, the Department of Energy said.

A123 won't suffer the same fate: It has already inked a deal to be purchased by Johnson Controls, and so it should stay open and functioning. And it will continue working on making a battery for General Motor's upcoming electric car, the Chevy Spark. But the bankruptcy could become another hammering point for Republicans who are trying to show President Obama's investment plans have not worked.

The battery maker was supposed to be a shining example of what could happen In April 2010, Obama welcomed the A123 CEO, David Vieau, to the Rose Garden to talk about how clean energy investments would help grow the economy. A123 had promised it would hire 3,000 workers in Michigan by the end of 2012, and open three new plants.

But the company has struggled in the past year after a costly recall put it back in the spotlight. The battery maker was forced to recall batteries used in the Fisker Karma electric car at a cost of $51.6 million, and that forced the company to halt production at its Michigan plant.

Clean energy investments were supposed to be Obama's version of the New Deal, pushing government money into industries that could move the economy forward. But consumer acceptance of electric cars has been slower than expected, resulting in excess supply of expensive battery packs.

Consumer demand is slowly ramping up, but it's not meeting the targets set by Obama's administration.

According to the MIT's Technology Review, the projections for demand far outweigh reality. By 2012, battery makers could have produced 3,900 megawatt hours worth of battery power. But there was demand for just 390 megawatt hours.

"It's still early days for electric vehicles, but the idle factories point to the difficulty of starting a new high-tech industry from scratch," the magazine wrote.

In a blog posting published Tuesday afternoon, the Department of Energy defended its investments in electric battery makers. The policy has had bipartisan support, and investments in battery makers began under the Bush administration.

"Four years ago, virtually all advanced vehicle batteries were built overseas, and it looked like the United States might miss out on this enormously important, rapidly expanding market," said Dan Leistikow, head of public affairs for the DOE, in the blog posting. Thanks to investments in battery makers, the cost of large batteries has gone down from $33,000 to around $17,000, he said.

"Most importantly, more and more of those cars and their components will be built right here in America – continuing to support American workers and new technologies that will reduce our dependence on foreign oil," he said.


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    • 1 Second Ago
      • 2 Years Ago
      Time for the libs to try and spin this one.
      • 2 Years Ago
      Now, who will take the responsibilty for A123 bankruptcy so that our Pres. B H Obama will look good on tonights debate? Any volunteer?
      • 2 Years Ago
      Yet another FAIL in Barrys "Green Jobs" fiasco. I, like the VAST MAJORITY of Americans, DO NOT WANT ELECTRIC CARS! At least not at this point in the technology. The Administration is pissing BILLIONS of taxpayer monies away on "pet" corporations that so far have failed miserably. When it comes time to admit their failure, it's ALWAYS (just like everything else) someone elses fault. Bush, Romney, Fox News, racism, and a myriad of OTHER reasons. NEVER "The Buck Stops Here". the American people can't afford it, and they're damn well SICK OF IT..
      • 2 Years Ago
      Doesn't surprise me one bit. Like Mitt Romney says, Obama ONLY picks losers. If You want to do well in the stock market and make money, find out whether Obama like its or not, If he doesn't like it, buy MANY shares, if he does like it let him buy it with his own money, not our's. How is it possible, unless i is a really big scam, possible for half of all busniesses that dinated to your election and that rec'd a total of BILLIONs of dollars, that SO many would go out of business in less the four years? I swear, it seems as though EVERYTHING OBama has done or been involved with in the last 4-5 years has been one BIG scam on the american people. In Romney campaign, ALL that he has to say for lowering the deficit is that he is gettiing rid of Obama. Obama has spent/wasted more money then ALL other Presidents combined in their first term. Thats hard to even say, much less what it means when you really think abot it.
      • 2 Years Ago
      Obama is great at losing our money.Vote him out before he bankrupts the USA
      • 2 Years Ago
      So we have an Obama supporter and contributor promised nearly a 1/4 Million $ from the tax payer, having received $132 million of that amount thus far; making batteries which are faulty, for a car that no body wanted and is being canceled, to save GM that was "Too big to allow to fail",so Obama and the Unions could then gain defacto control of at least 1/3rd of the auto Industry; and then produce the kind of cars the Obama Administration wanted Americans to drive. OhhhhhhKaaaayyyyyyyy. This is why this President has got to go Nov 6th. His agenda over all is his only mentality; and that has been and always will be bad for, and at odds with; what is truly American.
      • 2 Years Ago
      The list keeps building; OBama's Green Energy plan..... these took the stimulus money and either filed for bankruptcy or moved operations (OUTSOURCED) to China: Solyndra Abound Solar Evergreen Solar Amonix Solar Trust LSP Energy Bright Source Energy Conversion Devices Sun Power Beacon Power Ecotality A123 Solar UniSolar Azure Dynamics Ener1 A123 Systems LG Chem
      • 2 Years Ago
      That is the only thing BO is good at --- wasting tax dollars--yours & mine--
      • 2 Years Ago
      Obama has proved one thing (which a lot of us knew back in 2004), that a Community "Organizer" is not a qualification for running the United States of America! You can only blow hot air for so long before it becomes stale as a fart and stinks the high heavens! What an inept man and administration.
      • 2 Years Ago
      How much more taxpayer money does Obama have to waste before he is stopped? Obama could have given millions of dollars to each legal American family from the Stimulus package, rather than paying off his donors and special interest groups and the United States would have been much better off.
      • 2 Years Ago
      Another Criminal gone. Now let's get rid of the Criminal Nobama, His Spendthrift Wife, and the Pickaninnies and Mother in Law in November?
      • 2 Years Ago
      Why are we NOT surprised????? If you are surprised then you are an Obama Nut and this is a wake up call to leave this proven looser behind. Its time to let a businessman in to get the job done that is years behind schedule.
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