Obama-Backed Car Battery Company Files for Bankruptcy Protection
February 1, 2012
Ener1, an electric car battery company that the Obama administration awarded a stimulus grant to expand its operations, filed for Chapter 11 bankruptcy protection after being unable to repay pressing debts. The news came only days after President Obama's State of the Union Address, in which he acknowledged that some of those technologies that received federal funding would inevitably fail. Detractors have been quick to point out that this is not the first, says the Washington Post.
- Solyndra, a California solar panel maker, entered bankruptcy court after receiving taxpayer-guaranteed loans of $535 million.
- Beacon Power, a Massachusetts energy-storage firm that entered bankruptcy almost simultaneously with Solyndra, was the recipient of $43 million in loans.
- Now add to these two Ener1, which received $118 million in stimulus grant money.
Ener1 advocates have been quick to respond to charges that the company should not have been the recipient of federal funds. They point out that extraneous factors caused the company's financial struggle such as the June 2010 bankruptcy filing of the Norwegian carmaker Think -- a major customer.
Nevertheless, the company on the whole remains a grave disappointment on several fronts.
- While the White House once forecast that the Ener1 grant would help the company hire 1,400 workers by 2013, the company recently reported a workforce of 350.
- The company became the focus of Obama's 2011 State of the Union promise that his administration would help put 1 million electric vehicles on the nation's roads by 2015 when it was visited by Vice President Biden the day after the speech.
- In a September 2010 report, the White House featured subsidiary EnerDel as one of the "100 Recovery Act Projects that are Changing America."
A growing number of failing corporations is creating a poor record for the Energy Department's use of stimulus dollars. Not only do these projects lose valuable taxpayer money in a time of large deficits, but they also fail to create jobs promised by the Obama administration.
Source: Carol D. Leonnig, "Obama-Backed Car Battery Company Files for Bankruptcy Protection," Washington Post, January 26, 2012.
Browse more articles on Environment Issues