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Thread: Obama-backed electric car battery-maker files for bankruptcy

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    Obama-backed electric car battery-maker files for bankruptcy

    Obama-backed electric car battery-maker files for bankruptcy

    An Indiana-based energy-storage company that received a $118.5 million stimulus grant from the Energy Department filed for bankruptcy Thursday.
    Ener1 is asking a federal bankruptcy court in New York to approve a plan to restructure the company’s debt and infuse $81 million in equity funding.
    “This was a difficult, but necessary, decision for our company,Ener1 CEO Alex Sorokin said in a news release. “We are extremely pleased to have the strong support of our primary investors and lenders to substantially reduce the company’s debt.

    The company said it hopes the plan will “support continued operation of Ener1’s subsidiaries and help ensure that the restructuring will not adversely impact their employees, customers and suppliers.”

    The Energy Department in 2009 approved a $118.5 million stimulus grant for EnerDel, a subsidiary of the company that develops lithium-ion batteries used in electric vehicles. The grant was part of a broader program aimed at promoting the development of electric-vehicle battery technology.President Obama touted the program in his State of the Union address this year.
    “In three years, our partnership with the private sector has already positioned America to be the world’s leading manufacturer of high-tech batteries,” he said.

    At the time, EnerDel said the grant would help the company double its production capacity and create 1,700 jobs. But the company has faced major financial problems in recent months.

    Ener1’s decision to file for bankruptcy will likely draw the attention of House Republicans, who are investigating the bankruptcy of Solyndra, the solar panel maker that received a $535 million Energy Department loan guarantee in 2009.

    The GOP has pummeled the White House over Solyndra, raising broader concerns about the administration’s investments in clean-energy companies.

    The Energy Department did not immediately respond to a request for comment on the Ener1 bankruptcy.

    Obama-backed electric car battery-maker files for bankruptcy - The Hill's E2-Wire

    More evidence that the DOE should not be blowing taxpayer money just because the investment has the potential to be "green". When will the government learn it can't sustain a capital-destructive industry by mis-allocating taxpayer money for good intentions? Two board members, including the Chairman, were former GM executives. I'm interested to see if company officials were former campaign donors like the previous disaster.

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    Re: Obama-backed electric car battery-maker files for bankruptcy

    Wait. Batteries are a "capital-destroying" industry?
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    Re: Obama-backed electric car battery-maker files for bankruptcy

    Seems to be contagious.

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    Re: Obama-backed electric car battery-maker files for bankruptcy

    Quote Originally Posted by Deuce View Post
    Wait. Batteries are a "capital-destroying" industry?
    No they are not, but Government (Taxpayers cash) injected into non proven viable firms simply because some noodle-head has the idea that this is the way to go, is a stupid waste of valuable Taxpayer resourses.

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    Re: Obama-backed electric car battery-maker files for bankruptcy

    It's weird we have to keep explaining to you guys that not every investment is going to be a winner. That's how the market works. If a company were a sure thing to be wildly profitable, there wouldn't be any point in the government investing in it, private investors would already be doing that. The whole goal with this thing is to try to push innovation along faster than the market would on its own. So if none of the companies we were investing in were going bankrupt you would know we were not really hitting the right mark. We need to aim right at the bleeding edge to try to tip companies from the "won't make it" category over into the "will make it category".
    Last edited by teamosil; 01-26-12 at 03:05 PM.

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    Re: Obama-backed electric car battery-maker files for bankruptcy

    seems clean energy companies are to obama as haliburton was to bush,nothing but a bunch of backscratching to pay government money to someone who doesnt deserve it.

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    Re: Obama-backed electric car battery-maker files for bankruptcy

    Quote Originally Posted by teamosil View Post
    It's weird we have to keep explaining to you guys that not every investment is going to be a winner. That's how to market works. If a company were a sure thing to be wildly profitable, there wouldn't be any point in the government investing in it, private investors would already be doing that. The whole goal with this thing is to try to push innovation along faster than the market would on its own. So if none of the companies we were investing in were going bankrupt you would know we were not really hitting the right mark. We need to aim right at the bleeding edge to try to tip companies from the "won't make it" category over into the "will make it category".
    This isn't an example of the market. It's the government trying to pick who will succeed and fail and they are doing a pretty lousy job of that.

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    Re: Obama-backed electric car battery-maker files for bankruptcy

    Quote Originally Posted by teamosil View Post
    It's weird we have to keep explaining to you guys that not every investment is going to be a winner. That's how the market works. If a company were a sure thing to be wildly profitable, there wouldn't be any point in the government investing in it, private investors would already be doing that. The whole goal with this thing is to try to push innovation along faster than the market would on its own. So if none of the companies we were investing in were going bankrupt you would know we were not really hitting the right mark. We need to aim right at the bleeding edge to try to tip companies from the "won't make it" category over into the "will make it category".
    If the government has to invest in it because the private investors won't..... That tells me all I need to know about the viability of the business and how much of a waste of taxpayers dollars it is.
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    Re: Obama-backed electric car battery-maker files for bankruptcy

    Quote Originally Posted by 1Perry View Post
    This isn't an example of the market. It's the government trying to pick who will succeed and fail and they are doing a pretty lousy job of that.
    No, that isn't what the government is doing.
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    Quote Originally Posted by Lutherf View Post
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    Re: Obama-backed electric car battery-maker files for bankruptcy

    Quote Originally Posted by 1Perry View Post
    This isn't an example of the market. It's the government trying to pick who will succeed and fail and they are doing a pretty lousy job of that.
    You don't understand. The government isn't just trying to pick winners. They aren't trying to make money by investing in the stock market or something. They're trying to increase and speed up the development of green technology.

    Are you familiar with the concept of a positive externality? When an economic endeavor would create positive externalities, then the role of government is to help companies capture some of those externalities. That's what they're doing here, not day trading.

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