Tags: Michigan | firm | stimulus | wasted

$250 M in Stimulus Created Just 400 Jobs at Bankrupt Co.

Wednesday, 31 Oct 2012 10:33 AM

An electric car battery-making company that received a quarter billion stimulus dollars created just 400 jobs instead of the thousands that were promised, The Washington Times reports.

Massachusetts-based battery maker A123 Systems was touted by President Barack Obama when he cited the failed business in July 2011, “There’s A123, a clean-energy manufacturer in Michigan that just hired its 1,000th worker as demand has soared for its vehicle components.”

The company created just seven jobs in its last quarterly report and
408 total since it received a $249 million grant in December 2009 through Obama’s stimulus program, of which the company received about
$129 million before it went bankrupt this month, according to the Times.

A123 joins the list of other failed stimulus program businesses such as solar panel manufacturer Solyndra LLC, causing some head-scratching on Capitol Hill as to whether enough research was done prior to awarding to grant.

“A123 has been struggling for some time. Was the company struggling when the Energy Department decided to award it a federal grant? Did the Energy Department perform enough due diligence before making this award?” Sens. Chuck Grassley of Iowa and John Thune of South Dakota asked during a recent questioning of Energy Department officials.

Thune called the A123 debacle “another example of President Obama gambling with taxpayer dollars and picking winners and losers in the green energy world,” the Times reported.

A123 is seeking emergency approval to tap a $50 million loan provided by a Chinese auto parts maker to fund its Chapter 11 case, according to The Wall Street Journal.

Lawyers for the business said Sunday in a bankruptcy court filing that Wanxiang Group Corp. will provide the debtor-in-possession financing.

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