Sunday, January 29, 2012

Another Solyndra? Ener1 Bankruptcy Is Latest Obama Green Jobs Flop

Ener1 Bankruptcy Is Latest Obama Green Jobs Flop

President Obama's green jobs effort has suffered two more black eyes, as one federally backed company filed for bankruptcy and another laid off two-thirds of its workforce.
Ener1, which got a $118 million federal matching grant to develop electric car batteries, filed for Chapter 11 on Thursday. The Indiana-based company has been in dire condition, having been delisted from Nasdaq last November.
Meanwhile, solar panel maker Amonix laid off 200 people on Wednesday. It had received a $6 million tax credit in 2009 to build its Las Vegas facility.
Vice President Joe Biden tours Ener1 in Greenfield, Ind., on Jan. 26, 2011. The lithium-ion battery-maker, which got a $118 million federal matching...
Vice President Joe Biden tours Ener1 in Greenfield, Ind., on Jan. 26, 2011. The lithium-ion battery-maker, which got a $118 million federal matching... View Enlarged Image
They are the latest embarrassments in the White House's efforts to boost the green technology industry. Loan recipients have gone bankrupt, green jobs numbers have stalled and sales of electric cars have been sluggish.
Much like defunct Solyndra, Ener1 was once a White House darling. Vice President Joe Biden toured Ener1's Indiana facility last year. The administration put it as No. 67 on its list of "100 Recovery Act projects that are changing America."
The Day Before Yesterday
Two days before in his State of the Union address, President Obama took credit for the electric battery industry's success.
"In three years, our partnership with the private sector has already positioned America to be the world's leading manufacturer of high-tech batteries," he said. "Because of federal investments, renewable energy use has nearly doubled, and thousands of Americans have jobs because of it."
Left unsaid was that the president had originally promised the green energy investments would create five million jobs, not thousands. The silver lining for the administration was that Ener1's filing hasn't led to any layoffs at its EnerDel unit. At least not yet.
"The restructuring is not expected to impact EnerDel's oper ations and the company has made clear that they do not expect to reduce employment at the site," said Jen Stutsman, spokesperson for the Energy Department.
Ener1 was less optimistic, saying in a statement that while it had no plans to cut jobs, it would "make adjustments to the workforce as appropriate."
The administration awarded a matching grant to the lithium-ion battery company in August 2009. This was under the Recovery Act, aka the stimulus bill. Ener1 has drawn on $55 million of the available $118 million to date, according to the DOE. Its most recent SEC filing put its workforce at 769 people.
Electric Car Sales Stalled
The electric car industry has not taken off despite generous administration incentives. GM's (GM) Chevy Volt missed its 10,000 sales mark for 2011, selling 7,671. Nissan's (NSANY) Leaf also fell just short in its goal of 10,000 in sales, with 9,674.
"Development of this market has been slower than the industry originally anticipated," said Ener1 spokesman Brian Sinderson in an email, citing intense global competition.
Sales have not been helped by the National Highway Traffic Safety Administration's investigation into the Volt after its batteries caught fire in government crash tests.
Mariana Gerzanych, CEO of 350Green, which installs public charging infrastructure for electric cars, says the industry needs federal investment to get off the ground, but says the administration's random approach is creating its own problems.
"Investors won't come on board because they don't know what the policies will be" from year to year, she said. She thinks the administration has played favorites too.
Not Backing Down
The administration stood by the investment Thursday.
"While it's unfortunate that Ener1, the parent company, has entered a restructuring process, the new infusion of $80 million in private capital demonstrates that the technology has merit," Stutsman said.
The administration has continued to fund green energy companies. It doled out more than $7.5 billion in loans last fall while conceding it expected them to create only about 338 permanent jobs. That's about $20.7 million per job.
House Energy and Commerce Committee Chairman Cliff Stearns, R-Fla., said in a statement that the filing underscores the failure of the White House's green jobs push.
"Sadly, the Department of Energy's jobs record seems to grow worse by the day ... and it is American taxpayers who are paying the price," he said.
Stearns has also questioned the timing of the announcement, noting it came just after the State of the Union address. Emails publicly released in the Solyndra bankruptcy indicate that DOE officials pressured the company to delay bad news until after the 2010 election.
Solyndra is still winding its way through bankruptcy courts. The company filed for bankruptcy last year, having burned through more than $327 million in federal loans which are now unlikely to be repaid.
Last October, Beacon Power, recipient of a $43 million federal loan, filed for bankruptcy and was delisted from Nasdaq.
Also Thursday, FirstEnergy announced it was closing six coal-fired power plants, four in Ohio, the others in Maryland and Pennsylvania, due to new Environmental Protection Agency rules.
The closures will affect 500 workers.

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