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Taxpayer-Funded A 123 Green Energy Company Handed to Chinese

Alexander 2012/08/09 15:09:20
by Lindsay Leveen8 Aug 2012

A 123 Systems, the “green,” federal stimulus-funded lithium ion battery manufacturer, announced atrocious quarterly results today. Most expected that A 123‘s results would be dark red. What was a surprise was the simultaneous announcement that the company had entered into a memorandum of understanding (MOU) with a Chinese industrial group, Wanxiang, that will give the Chinese control of the company.

Remember that A 123 is the battery supplier to electric car-maker Fisker, and is also an investor in Fisker. It’s also the third US lithium ion battery manufacturer to go under. The other two advanced “green” battery failures were ENER1 and Valence. But the other two simply expired; there was no resuscitation attempt by a large Chinese industrial group.

Senator Charles Grassley of Iowa has been conducting an investigation into A 123 and Fisker -- and the Department of Energy money that has been spent on these two companies to support Secretary of Energy Steven Chu’s pipe dream for automotive transportation. I personally told the Senate in outside witness testimony 30 months ago that the A 123 and Fisker story would end in failure.

Not that the Senate at that time paid any attention. It is a sad testament to the state of affairs in our country that a chemical engineer sitting in his back bedroom has more vision of the future than the National Academy of Sciences and the entire DOE. Of course, the chemical engineer had no economic or political motive, and looked at the thermodynamic problem while all others were on the gravy train. I have written a book for laypeople that explains energy and sustainability in simple terms. Now that billions have been wasted by our elected officials, perhaps I should invite members of Congress to read the book and gain some insight into the “green” stimulus failure.

Wanxiang is a Chinese auto parts maker, and of course it can bring some financial stability to A 123 -- if it pours in money. Its problem will be that even if it uses sweatshop labor, the costs of the batteries will simply not come down by much, as there is not much of a labor component in the batteries. That is partly why I wrote my thesis to the US Senate. The CEO of A 123, Mr. David Vieau, still has the hope that this new investment after all the other investments will bring A 123 to the promised land. Good luck.

The A 123 story may make the Solyndra scandal look clean by comparison. The Solyndra structure was via loan guarantees, and when Solyndra went out of business the DOE had some control over the disposition of the assets and know-how of the company. The Chinese were prevented from buying Solyndra for a song and gaining the knowledge that tax payers and investors had spent a lot of money to gain. By contrast, the A 123 structure is a complete failure in protecting taxpayers. The money was given to A 123 by the DOE as a grant with essentially no strings attached as to how the assets and know-how of the company could be transferred.

Note how Senators John Kerry (D-MA), Debbie Stabenow (D-MI), Carl Levin (D-MI), Jeff Bingaman (D-NM), and Representatives Ed Markey (D-MA) and John Dingell (D-MI) all stated the wonders of A 123 back on August 5, 2009.

These quotes are from an A 123 press release on that day:

Senator Kerry

“For those of us in Massachusetts who have been pushing for years to secure investments to make America the world’s leader in the domestic advanced battery field, this announcement is terrific news,” said Sen. John Kerry. “A123Systems is doing the kind of cutting edge work we need to get our manufacturing industry back on track and create jobs here at home. Not only will these batteries help us decrease our dependence on foreign oil, they will help us compete and win on a global playing field. These grants are a wise investment that will pay many dividends.”

Senator Stabenow

“This grant will help promote a 21st century manufacturing strategy that creates a more energy independent country while putting the Americans back to work. The investment will support an infrastructure that will allow Michigan and the rest of the nation to lead the world in innovation in automotive and clean energy technologies,” said Senator Debbie Stabenow.

Senator Levin

“We are at a critical juncture both in terms of the commercialization of advanced battery technology and the economic recovery. By providing financial incentives for battery development and production, this grant is a major step by the government towards reducing our dependence on foreign oil, creating jobs and enabling the U.S. to compete globally to produce green vehicles,” said Senator Carl Levin.

Congressman Markey

“We shouldn’t have to trade a reliance on Middle Eastern oil for East Asian batteries. Through these grants, A123 and other American clean tech companies will re-energize our economy, re-establish America as a technology leader, and renew our commitment to a better environment. I congratulate A123 for receiving this prestigious grant,” said Congressman Ed Markey.

Congressman Dingell

“I want to congratulate A123Systems, one of Michigan’s own, for the grant it received today. This federal investment is the ultimate vote of confidence in the company and the advanced batteries it has produced and will continue to produce. In view of other countries’ efforts to assist their domestic manufacturers, I feel it imperative that we do the same in the United States. A123 will play a key role in Michigan’s transformation into a high-tech economic powerhouse, and I would hope that today’s grant announcement is the first of many for this great company,” said Congressman John Dingell.

Senator Bingaman

“The investment that President Obama announced today is a hopeful sign that the U.S. is reversing the recent trend of seeing ideas invented in this country commercialized overseas. It’s one of many steps that our nation must take in the next few years to once again be a world leader in clean energy technologies,” said Senator Jeff Bingaman.

It will be interesting to see what these politicians say now. Of course, Sen. Grassley and other elected officials can call for inquiries, and set up measures to block this transaction. I would like Sen. Grassley to investigate the proposed transaction rapidly and to prevent it if possible. We the taxpayers should not be forced to put another cent into this company, which had no reason to be given our money in the first place--and giving away the company to the Chinese is the ultimate insult.


Read More: http://www.breitbart.com/Big-Government/2012/08/08...

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