2/24/2012

Another Recovery Act Environmental "Success Story" goes bankrupt

At least the Obama administration was able to fund big salary increases for these executives. Another Recovery Act success story?

In the nine months since David Prystash was named Chief Financial Officer of A123 Systems — the battery manufacturer that received $390.1 million in federal and state subsidies — the company has laid off 125 employees and had a net loss of $172 million through the first three quarters of 2011. . . .

this month A123’s Compensation Committee approved a $30,000 raise for Prystash . . . . Prystash wasn’t the only executive to see a big raise this month. Robert Johnson, vice president of the energy solutions group, got a 20.7 percent pay increase going from $331,250 to $400,000, while Jason Forcier, vice president of the automotive solutions group, saw his pay increase from $331,250 to $350,000. Prystash’s raise was 8.5 percent, going from $350,000 to $380,000. . . .

When A123 Systems announced it was opening its lithium-ion battery manufacturing plant in Livonia in September 2010, then Gov. Jennifer Granholm wrote about it on the Huffington Post calling it “a Recovery Act success story.”

But there have been troubles for A123 Systems in the 17 months since then despite a lot of state and federal aid to prop it up.

The state of Michigan gave it a $100 million MEGA tax credit that is contingent on the company creating 300 jobs by the end of 2016. A123 Systems also received another $41 million in tax breaks and subsidies from the state. The Department of Energy awarded A123 Systems a $249.1 million grant. . . .


More on the waste and corruption involved in the process:

Other Solyndras are coming to light, the latest being Sapphire Energy. Its pond-scum-based biofuel still costs over $26 a gallon, but that doesn't matter when your executives give almost solely to Democrats.

The Washington Free Beacon reports that after $104.5 million in stimulus and other Energy and Agriculture Department funds for a New Mexico facility, it can boast just 36 new jobs. UC Berkeley's Energy Biosciences Institute says it'll take a decade before we know if algae-based fuel can compete with gas.

The Washington Post recently found "$3.9 billion in federal grants and financing flowed to 21 companies backed by firms with connections to five Obama administration staffers and advisers." . . .

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