Taxpayers Lose Another $118.5 Million As Next Obama Stimulus Pet Project Files For Bankruptcy
Remember that one keyword that oddly enough never made it's way into the president's largely recycled SOTU address - "Solyndra"? It is about to make a double or nothing repeat appearance, now that Ener1, another company that was backed by Obama, this time a electric car battery-maker, has filed for bankruptcy. Net result: taxpayers lose $118.5 million. The irony is that while Solyndra may have been missing from the SOTU, Ener1 made an indirect appearance: "In three years, our partnership with the private sector has already positioned America to be the world’s leading manufacturer of high-tech batteries." Uh, no. Actually, the correct phrasing is: "...positioned America to be the world's leading manufacturer of insolvent, bloated subsidized entities that are proof central planning at any level does not work but we can keep doing the same idiocy over and over hoping the final result will actually be different eventually." We can't wait to find out just which of Obama's handlers was may have been responsible for this latest gross capital misallocation. In the meantime, the 1,700 jobs "created" with the fake creation of Ener1, have just been lost. Yet nothing, nothing, compares to the irony from the statement issued by the CEO when the company proudly received taxpayer funding on its merry way to insolvency: ""These government incentives will provide a powerful stimulus to a vital industry and help ensure that the batteries eventually powering millions of cars around the world carry the stamp 'Made in the USA'." Brilliant - and no, they are laughing with us, not at us.
From The Hill:
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 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.
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.
We are extremely confident that the company's primary investors and lenders are also delighted to have just wiped out $120 million in costless equity value and to have complete control over the company at this point.
And some hilarious selections from the company's then proud announcement of procuring US taxpayer funding that as of today is no more:
The White House today announced that Indiana-based automotive lithium-ion battery maker EnerDel, Inc., will receive $118.5 million in federal grant funding under the stimulus package passed last spring. The funds will help double the company's U.S. production capacity, creating approximately 1,700 new jobs in the state. Word came in separate speeches by President Obama in Elkhart, Indiana, and Vice President Joe Biden in Detroit, Michigan.
EnerDel, the lithium-ion battery subsidiary of Ener1, Inc. (Nasdaq: HEV - News), is one of nine companies selected to receive funds for cell, battery and materials manufacturing grants in a broadly subscribed solicitation managed by the U.S. Department of Energy (DOE). EnerDel received the full amount it requested. In all, 48 companies in the electric and hybrid vehicle sector received a total of $2.4 billion in awards today.
"This is about planting the roots of a critical industry firmly in American soil," said Ener1 Chairman and CEO Charles Gassenheimer. "The economic benefits associated with this government investment will stretch far beyond the battery industry. Carmakers in North America, foreign and domestic, are counting on advanced battery systems to power an entire new generation of electric and plug-in hybrid vehicles."
The grants will work together with the applied for long-term, low-interest loans under DOE's Advanced Technology Vehicle Manufacturing program (ATVM), in unleashing private capital flows to companies in this sector. EnerDel is in advanced stages of discussions with DOE regarding its ATVM application.
"These government incentives will provide a powerful stimulus to a vital industry and help ensure that the batteries eventually powering millions of cars around the world carry the stamp 'Made in the USA,' Gassenheimer said. [ZH: too fucking rich]
EnerDel is the first and so far only company in the industry to have built facilities in the United States to produce automotive lithium-ion batteries on a commercial scale, and recently unveiled one of the most advanced battery cell production lines in the world at its plant in Indiana. The company also recently announced partnership projects with Volvo and Nissan, as well as with plug-in and electric vehicle makers Fisker and Think Global.
"We are in a race today that will decide who will make the technology to power future generations of fuel-efficient vehicles around the world," said EnerDel CEO Ulrik Grape. "Korea, Japan and China are doing everything they can to win it, but with these new resources, the Obama administration is helping America's best, most innovative players move ahead of the pack."
"Economic growth is not a Democratic or Republican issue. This effort has been a model of bi-partisan cooperation by Senators Richard Lugar and Evan Bayh, and by Governor Mitch Daniels," Grape said. "Their support has been tremendously important."
The funds will help EnerDel in mass producing a high-quality automotive product with a wide range of engineering capabilities for multiple automotive requirements, including high-speed, automated production lines for cell electrode manufacturing, and lean-manufacturing techniques for battery assembly.
Good work US taxpayer - through your selfless loss of money you have managed to splatter yet another egg of infinite humiliation on the face of the world's most incompetent central planning administration, which would make even Stalin green with envy.
And, heeeeeere's Joe Biden. One wonders if his favorite advisors Jon Corzine was responsible for this brilliant investment idea.
At least the propaganda video has dramatic music. How much did that cost taxpayers?
And here is the now former Board of Directors. To our huge surprise the company is headed by former GM execs, with the non-exec chairman having worked at not one but two bankrupt companies including Remy. Well, make that 3.
Thomas J. Snyder
Non-Executive Chairman of the Board
With an in-depth background in both the automotive industry and the energy sector, Thomas J. Snyder brings a wealth of pertinent experience to the board of Ener1, chairing the Nominating and Corporate Governance committee. He currently serves as the President of Ivy Tech Community College of Indiana, a leading midwestern educational institution with an enrollment of more than 100,000 students. Prior to that, he served as the President and Chief Executive Officer of Remy International in Anderson, Indiana, and most recently as the Chairman of the Flagship Energy Systems Center (FESC) in Anderson. FESC is Indiana's first energy-focused center of excellence working on leading technologies, including hybrid systems, lithium-ion batteries, solid oxide fuel cells and alternative fuels.
Following a distinguished career at General Motors, Mr. Snyder spent 11 years with Delco Remy International, where he established a new business model and diversified the company from a captive General Motors supplier to a global leader in truck, off road and aftermarket products, increasing the company sales from $500 million to over $1.2 billion and worldwide employment from 1,500 to 6,000. While at Delco Remy, Mr. Snyder also led their management buyout from General Motors in 1994.
Mr. Snyder graduated from Kettering University, formerly General Motors Institute, in 1967, with a degree in Mechanical Engineering and also holds an MBA from Indiana University. He is a member of the Executive Committee of the Indiana State Chamber of Commerce, a member of the Executive Council of the Saint Theodore Guerin High School in Noblesville, a Board member of the Paramount Theatre restoration in Anderson, Indiana and a past member of the prestigious World Economic Forum in Davos, Switzerland.
Kenneth R. Baker
Kenneth R. Baker is a long-time automotive industry executive with a focus on the development of alternative energy. Mr. Baker has most recently served as President, Chief Executive Officer and member of the Board of Trustees of the Altarum Institute, a leading nonprofit research organization recognized for advanced informatics/decision support applied to the areas of national defense, healthcare, homeland security and the environment. Previously, he served as the Vice Chairman and Chief Operating Officer of Energy Conversion Devices.
Mr. Baker also served as an executive at General Motors for more than 30 years until his retirement in 1999, after which his achievements included serving as Vice President of Global Research and Development and as Program Manager of GM Electric Vehicles. He was also the first Chairman of the United States Advanced Battery Consortium, the public/private partnership that has partially funded EnerDel's lithium-ion battery development.
In addition to his membership on Ener1’s Board and Chair of the Compensation committee, he currently serves in the following capacities: member of the Board of Directors and the audit and compensation committees of Millennium Cell, Inc.; member of the Board of Directors and the audit committee of AeroVironment, Inc.; serves on the Board of Directors of the National Coalition for Advanced Manufacturing; serves on the Board of Governors of Cranbrook Science Institute; and serves on the Board of Trustees of the Center for Automotive Research. Mr. Baker graduated with a BS in Mechanical Engineering from Clarkson University.
As a Senior Managing Director at FTI Consulting, Inc., Elliot Fuhr specializes in assisting senior management and boards of directors in the areas of performance improvement, financial and operational restructuring, mergers and acquisitions, divestitures, business planning and rapid implementation projects. His broad industry experience includes engagements with automotive, apparel, retail, technology, manufacturing, services, chemical, and oil and gas companies. Elliot has led or is leading several FTI firm-wide initiatives, including Business Quality, Learning and Education, Business Performance Improvement and Key Client programs. He has more than 24 years of experience in consulting and restructuring businesses and was previously a partner at PricewaterhouseCoopers, LLC in the Business Recovery Services division. In addition, he has held several chemical engineering positions at Exxon.
As an energy entrepreneur for more than three decades, Mr. James pioneered the unregulated marketing and trading of crude oil and petroleum products, natural gas, and electricity as chairman and CEO of Citizens Corporation. Building on that success, he expanded into oil exploration and energy conservation. He created Citizens Lehman Power, a joint venture between Lehman Brothers and Citizens that was the nation’s first electricity trading and asset acquisition/restructuring company and successfully sold it to The Energy Group Plc.
Prior to co-founding RockPort Capital Partners in 2000, where he currently serves as the managing general partner, Mr. James was non-executive chairman of Citizens Power and a member of the executive committee of Peabody Energy, and was instrumental in the LBO of Peabody and Citizens from The Energy Group in 1998. Mr. James currently serves on the board of directors of Peabody Energy Corporation and MicroSeismic, Inc.
He is co-founder and member of the advisory board of the Center for Regenerative Medicine at Massachusetts General Hospital, and co-founder and member of the Defense Venture Catalyst Initiative. Mr. James is an alumnus and member of the advisory board of the National Peace Corps Association (Kenya) and also serves as director and former acting chairman of the African Wildlife Foundation, trustee of the Cape Ann Museum, and governor of the Colby College Museum. Mr. James is a graduate of Colorado College with a bachelor’s degree in history.
With nearly 30 years of experience in the fields of aerospace, defense, information technology, electronics and Asian business management, Mr. Kasagawa has extensive experience in the area of new product development and marketing strategies for emerging markets.
Mr. Kasagawa currently serves as chief operating officer of the aerospace and industrial systems division of ITOCHU Corporation. He leads a 1,000-person business unit that provides aerospace and defense solutions to the Japanese government and industrial customers, as well as machinery and equipment to industrial customers around the world.
Since joining ITOCHU Corporation in 1981, Mr. Kasagawa has held various management positions primarily in the aerospace and defense segment, including 10 years of assignments in the United States. During his tenure at ITOCHU, he has served three years in his current role and four years as general manager of the aerospace department.
Mr. Kasagawa graduated from the University of Tokyo with a degree in engineering with an emphasis in naval architecture and holds a master’s degree in business administration from Cornell University. He has served on the board of directors of Ishikawa Seisakusho, Ltd., a Japanese machinery and defense equipment manufacturer. He has also been a member of the advisory committee of Satellite Positioning and Application Center of Japan since 2007.
Nora Brownell was the founding partner of ESPY Energy Solutions, LLC, a woman-owned independent energy consulting company, which provides strategic planning, marketing, business, regulatory and technical expertise to energy utilities, energy equipment manufacturing and supplying companies and financial institutions evaluating investments in the energy sector. Prior to founding ESPY in 2009,
Ms. Brownell spent three years as the sole proprietor of BC Consulting, an energy consulting company.
Ms. Brownell served for five years as a commissioner of the Federal Energy Regulatory Commission. As commissioner, she was an advocate for the development of regional transmission organizations, markets for wholesale power and national energy infrastructure development. Prior to her appointment to the Federal Energy Regulatory Commission, Ms. Brownell served one year as president of the National Association of Regulatory Utility Commissioners and five years as commissioner of the Pennsylvania Public Utility Commission. From 1992 through 1996, she served as the senior vice president for Meridian Bancorp, Inc.’s corporate affairs unit.
Ms. Brownell is a visiting scholar at Vermont Law School and a guest lecturer at the University of Idaho. She has also previously lectured at New York University Law School. She is a member of the board of directors of Oncor, Inc., Comverge, Inc., and Spectra Energy Partners. Ms. Brownell also serves as an emeritus member of the GridWise Architecture Council and serves on the advisory board of Starwood Energy Fund. Ms. Brownell attended Syracuse University.