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In fact, the political sniping has already begun, according to a New York Times article. Republican presidential candidate Mitt Romney has criticized the president for his support of green energy programs consistently. Reacting to the A123 news this week, Romney press secretary Andrea Saul was quoted as saying "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."
A123 was awarded a $249 million stimulus grant, and has used about $132 million of that amount, according to a DOE official quoted in the article. At the time the grants were awarded and long after, A123 was considered one of the most promising grant recipients. The DOE official said the money was not wasted as a result of the bankruptcy because the two factories will be sold to Johnson Controls, another U.S. battery maker. That deal is valued at about $125 million.
Smart Grid News reported in July on A123's precarious position. The company said at the time it had enough money to keep operating for about five months. A deal announced in August to sell a majority interest to China's largest car parts maker was expected to help the company stay afloat, but A123 chose not to go through with it.
And the battery maker has been in trouble for some time. While the year started off well enough, A123 had to recall batteries it had built for Fisker Automotive, an expensive situation followed by more losses. Some industry observers pointed to production overcapacity and its inability to come up with a diversification plan to develop a serious presence in the energy storage market.
One reason the A123 bankruptcy is predicted to become an election issue is the precedent set when solar panel maker Solyndra filed for bankruptcy in September 2011. The Solyndra failure and its $535 million in DOE loan guarantees are still finding their way into political debates and criticisms of the administration's energy policies. And incidentally, Solyndra filed suit last week against several Chinese solar companies, asking for $1.5 billion in to cover business losses it claims it incurred as a result of an illegal conspiracy by the Chinese companies.
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