An employee checks on battery cells at the grand opening of A123 Systems in Livonia, Mich., in September 2010. (Photo: Mandi Wright, Detroit Free Press)
An electric vehicle battery maker
that was awarded $249 million in federal stimulus funds filed for
Chapter 11 reorganization on Tuesday, giving GOP presidential candidate
Mitt Romney potential ammunition to attack President Obama's
The Waltham, Mass.-based company, A123
Systems, filed for bankruptcy court protection in Wilmington, Del., a
day after it said it would be unable to make a debt payment. It's
selling its automotive assets to a competitor, Milwaukee-based
auto-parts maker Johnson Controls, which may enable it to continue
operating two factories in the Detroit suburbs of Livonia and Romulus.
electric vehicle sales remain sluggish, the rechargeable lithium-ion
battery manufacturer has struggled. It took a hit when the batteries it
supplied for electric car maker Fisker Automotive's luxury plug-in Karma
stopped running during a Consumer Reports test drive, prompting a
recall. In August, it announced an investment deal with Chinese auto
parts maker Wanxiang Group, but the deal collapsed.
Its Chapter 11
filing will likely spur further GOP criticism, which escalated once
solar panel manufacturer Solyndra filed for Chapter 11 protection in
Sept. 2011 after receiving more than $500 million in federal loan
guarantees. On Wednesday, a court will evaluate Solyndra's
In the first presidential debate Oct. 3,
Romney attacked Obama's green-energy programs. He called four aid
recipients "losers," including Solyndra, Fisker, EV car maker Tesla
Motors and auto battery manufacturer Ener1.
"You don't just pick the winners and losers, you pick the losers," Romney told Obama in a sharp exchange.
Tuesday, Romney campaign spokeswoman Andrea Saul called A123's
bankruptcy "yet another failure for the president's disastrous strategy
of gambling away billions of taxpayer dollars on a strategy of
government-led growth that simply does not work."
of Energy said those investments have had bipartisan support. It
pointed to a May 2009 letter to Energy Secretary Steven Chu, signed by
GOP and Democratic members of Michigan's congressional delegation, in
favor of the grants to A123 and three other companies.
promising technology has a long history of bipartisan support," DOE
spokesman Dan Leistikow wrote on the agency's website. He said it
received a $6 million grant from the Bush administration in 2007 and has
used about half - or $132 million - of its 2009 grant.
of DOE investments, amounting to $2 billion in EV-related grants to 29
companies across 20 states since 2009, he said, the cost of a battery
with a 100-mile range has been halved - to $17,000 - and is expected to
drop to $10,000 by 2015. One other recipient, Ener1, has filed for
bankruptcy protection; it did so in January but continues operating.
an emerging industry, it's very common to see some firms consolidate
with others as the industry grows and matures," Lestikow said, adding
that A123's sale to Johnson Controls means its manufacturing facilities
and technology will remain "a vital part" of America's advanced battery
Given the bipartisan support for A123's grant, "it's
disingenuous" for Republicans to blame Obama for the company's problems,
says Richard Caperton, an energy expert at the Center for American
Progress, a Washington-based think tank founded by President Bill
Clinton's former chief of staff John Podesta. Despite A123, he said
"the long-term viability of the advanced battery industry looks just