A123 Systems, an electric vehicle battery maker has filed for bankruptcy Tuesday. It has received $249 million in federal stimulus funds. The Chapter 11 filing of the company gave Mitt Romney another weapon against President Barack Obama’s green energy subsidies.
The company filed for bankruptcy a day after it announced that it can’t make debt payment. It is selling its automotive assets to Johnson controls, a competitor based in Milwaukee. The deal would allow it to continue the operations of two factories in Detroit.
Electric vehicle sales have been sluggish and this is why A123 Systems struggled to stay afloat. The rechargeable lithium-ion battery manufacturer took a hit when the batteries it supplied for electric car manufacturer Fisker Automative’s luxury plug-in Karma stopped running during a test drive by consumer Reports. This prompted a recall on the batteries. In August, the company announced a deal with Chinese auto parts maker Wanxiang Group but it didn’t materialize.
During the first presidential debate last October 3, Romney attacked President Obama’s green energy programs. He called four stimulus funds recipients losers. These are Solyndra, EV car maker Tesla Motors, Fisker, and auto battery manufacturer Ener1.
Last Tuesday, the Romney campaign spokeswoman Andrea Saul calledA123 Systems’ bankruptcy another failure for President Obama’s disastrous gamble on government-led growth that doesn’t work. The Department of Energy said that the investments had bipartisan support. It said that a May 2009 letter to Energy Secretary Steven Chu was signed by Democratic and GOP members of Michigan’s congressional delegation in favor of giving grants to A123 and other companies.
