Romney pounces as stimulus-backed auto battery-maker goes bankrupt

Mitt Romney heaped fresh criticism on the White House green energy agenda Tuesday after the bankruptcy of A123 Systems, a stimulus-backed manufacturer of electric car batteries that President Obama has personally touted.

The company, which won a $249 million Energy Department (DOE) grant for Michigan-based manufacturing in 2009, has an agreement to sell its automotive business to the company Johnson Controls, Inc.

A123’s Chapter 11 filing is fueling new GOP criticism of green energy ventures backed by the 2009 stimulus law. Republicans have repeatedly pointed to the collapse of Solyndra, a solar panel manufacturer that received a $535 million federal loan guarantee, as evidence the program isn't working.


“A123’s bankruptcy is 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,” said Andrea Saul, a spokeswoman for Mitt Romney.

A Republican National Committee spokesman called A123’s bankruptcy “another green energy bust for the Obama administration.”

However, in 2009, Republicans and Democrats alike in the Michigan delegation backed applications for stimulus grants for battery manufacturing in the Wolverine State, which could blunt criticism over A123’s bankruptcy.

Obama touted A123 in speeches in 2010 and 2011 in heralding the results of administration efforts to boost advanced battery manufacturing and other green vehicle technologies.

And in September 2010, Obama spoke by phone at an event to celebrate the opening of the company’s Livonia, Mich., battery plant.

DOE noted that the agreement with Johnson Controls, which is purchasing A123’s automotive technology and assets, will enable continued operations of A123’s stimulus-backed manufacturing.

“Today’s news means that A123’s manufacturing facilities and technology will continue to be a vital part of America’s advanced battery industry,” Dan Leistikow, who directs DOE’s public affairs office, wrote in a blog post Tuesday.

“In an emerging industry, it’s very common to see some firms consolidate with others as the industry grows and matures,” he wrote.

A123 received $132 million of the $249 million grant approved in 2009, according to DOE.

Johnson Controls heralded the deal. “We believe that A123’s automotive capabilities are a good complement to our existing portfolio and will further advance Johnson Controls' position as a market leader in this industry,” said Alex Molinaroli, president of Johnson Controls Power Solutions, in a statement.

Wisconsin-based Johnson Controls has agreed to provide $72.5 million in financing that will help A123 operate during the transaction, according to A123.

Massachusetts-based A123, in addition to electric car batteries, has energy storage product lines for information technology, the power grid and other areas. The company said Tuesday that it is in “active discussions regarding strategic alternatives” for its grid, commercial, government and other operations.

A123’s Chapter 11 filing with the federal bankruptcy court in Delaware lists $459.8 million in assets and $376 million in debt as of Aug. 31, according to Bloomberg.

Leistikow, in his blog post, said Obama administration's support for the advanced battery and electric car development has been a success. He noted that A123 Systems received $6 million in 2007 from the Bush administration.

“Under this Administration, the Department of Energy, with strong bipartisan support, awarded $2 billion in grants to 29 companies to build or retool 45 manufacturing facilities spread across 20 states to build advanced batteries, engines, drive trains and other key components for electric vehicles,” he wrote.

Leistikow said more than 30 such plants are now in operation, employing thousands of U.S. workers. 

— This story was updated at 1:55 p.m.