Another Corporate Welfare Recipient Teeters on Bankruptcy

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While President Obama was busy lambasting Big Oil tax breaks on Thursday, yet another one of his environmental welfare recipients (the very kind he wants to redistribute oil subsidies to) was teetering on the edge of bankruptcy. Who needs to win the Mega Millions lottery? Start a pie-in-the-sky eco-boondoggle, and a half-billion-dollar jackpot ripe for squandering is all yours!

The Solyndra of the week is A123 Systems, an electric vehicle battery company based in Massachusetts. The firm also has battery plants in Michigan, where former Democratic Gov. Jennifer Granholm once heralded A123 as a federal stimulus “success story.” Former House Speaker Nancy Pelosi visited the company headquarters and hailed it as a “great example of how Recovery Act funding is helping American companies.” In addition to nearly $300 million in Obama Recovery Act funds, Granholm kicked in another $135 million in tax credits and subsidies to bribe the company to keep jobs in her state.

How’s the return on government investment? This green dud will have taxpayers seeing red. A123’s official company motto is “Power. Safety. Life.” But the firm’s reality is “Out of power. Endangering safety. Clinging to life.”

Earlier this week, the company announced a recall of malfunctioning battery packs manufactured in Livonia, Mich. A123 makes the products for Fisker, Chevrolet and BMW electric cars. Consumer Reports flagged the potentially hazardous defect caused by faulty calibration earlier this month. The recall will cost upward of $55 million.

A Deutsche Bank analyst wrote: “We no longer have enough confidence that (A123) can raise sufficient capital (without massive equity dilution) and/or continue to augment their book to future business. Recent quality issues may lead to concerns over (A123’s) ability to manufacture with quality at high volumes, potentially leading to customer defections or at least difficulty in procuring new contracts.”

When it rains, it pours. The dead battery debacle follows news of 125 layoffs in November due to diminished vehicle production by top client Fisker Auto.

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  • davarino

    Just want to know, when does O own this economy and its results. Is it still Bush's fault or is he incompetent yet? And by incompetent I mean clueless. Or is it that he just doesnt care and has used this awful economic situation to ingratiate himself and others with other people's misfortune. The left are like vampires, sucking the life blood out of this country. Come to think of it, I dont think I have seen Pelosi or Ried out in the light of day.

    • StephenD

      Well said my friend! Except…I don't think he is clueless or just doesn't care. I think he is doing EXACTLY what his agenda calls for in order to devalue further the dollar and disrupt the Exceptional American way of life as we know it. When we are all just as a European Nation-State, that is when he will be satisfied; ready for a world dictator.

  • Schlomotion

    Why, does the Presidential boondoggle and glut of subsidy money, kickbacks, squandering and corruption only look ridiculous to you people when it goes to wind and solar but not when it goes to oil and coal?

    • GLasker

      Because, unlike wind and solar, oil actually turns a profit.

      • Schlomotion

        Really? Do you profit from it?

        • Wideband

          Bet your @ss! I own stock.

          • Schlomotion

            Well enjoy your $30 dollars then. I hope it drives you far.

          • Western Canadian

            Wonder if we could take up a collection and send this idiot troll to saudi arabia?? He’d fit in, not being very bright.

          • Schlomotion

            Send me to Yahk, BC. It would be more fun.