Seeking Alpha

A123 Systems (AONE) received a $946,830 grant payment from the government on the day it filed...

A123 Systems (AONE) received a $946,830 grant payment from the government on the day it filed for Chapter 11 last month. The money, which was was part of $115.8M in funds that the electric-car battery producer has received, will add fuel to criticism about the government's support of green-energy programs. What won't help is that a court has approved bonuses of up to $4.2M for 10 employees who have stayed on while A123's assets are sold.
From other sites
Comments (23)
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    Axions shareholders are holding their jaws right now !!!

     

    That company just can't catch a break..
    18 Nov 2012, 05:26 AM Reply Like
  • Simon S
    , contributor
    Comments (45) | Send Message
     
    $4.2 M in bonuses to the ones who ran this company to the ground is beyond absurd. That's $420K average per person. I am sure they can find an outside firm to dispose of the assets for a fraction of that amount and they will not have the same incentive to workout a sweetheart deal for themselves with the company buying the assets
    18 Nov 2012, 10:44 AM Reply Like
  • jawbone79
    , contributor
    Comment (1) | Send Message
     
    Simon- you are so right . The whole board and all the officers should have been canned a long time ago. But as usual the people who do not deserve any reward/bonus are going to make out like bandits while everyone else is going to get the shaft.
    19 Nov 2012, 01:57 AM Reply Like
  • JohnInMA
    , contributor
    Comments (45) | Send Message
     
    It's easy to suspect the grant had a long promise date, and was simply delayed through bureaucracy. Add to that the fact that a sub-million disbursement is not likely as well-tracked, and you have this inexplicable situation.
    18 Nov 2012, 10:58 AM Reply Like
  • Teutonic Knight
    , contributor
    Comments (2061) | Send Message
     
    Socialism at its Best! 'It will end when it ran out of other people's money'.

     

    I don't believe George Westinghouse, Thomas Edison, and Elihu Thomson received such handouts. America industrial leadership is history.
    18 Nov 2012, 11:32 AM Reply Like
  • serio7
    , contributor
    Comments (2) | Send Message
     
    History shows that almost all great technological advancements were made by visionaries who cared more about their passions than they did about the financial benefits they might receive. I believe in the future of battery power, but we may have to wait for the next Nikola Tesla.
    18 Nov 2012, 01:51 PM Reply Like
  • davidbdc
    , contributor
    Comments (3165) | Send Message
     
    I'm sure all these folks are politically "connected", and they are "entitled" to a 500K payday for showing buyers around the business they ran into the ground.

     

    Of course they will probably have to hire a few consultants (ie friends/relatives of federal government bureaucrats) to actually tell folks what the different assets really are, since its likely these executives don't actually know much at all about the business and spent their time smoozing politicians to get government money!
    18 Nov 2012, 12:48 PM Reply Like
  • AllStreets
    , contributor
    Comments (1082) | Send Message
     
    According to a report I saw Friday or Saturday on a cable news channel (was it CNN?) the $1MM payment was made under contractual terms of the original grant for work that had already been performed and would have been collected by the creditors committee in any event.
    18 Nov 2012, 01:20 PM Reply Like
  • Vaun
    , contributor
    Comments (320) | Send Message
     
    If that's accurate it changes then the headline is misleading and this is purely political.
    18 Nov 2012, 09:36 PM Reply Like
  • JohnInMA
    , contributor
    Comments (45) | Send Message
     
    More good news. AONE may not be done attempting to get money from the federal gov't. According to the Detroit Free Press, they may ask for more of what was already granted. Terrific!!
    http://tinyurl.com/bex...
    18 Nov 2012, 01:20 PM Reply Like
  • warrenrial
    , contributor
    Comments (559) | Send Message
     
    The tax payer gets ripped off again, our government at work.
    18 Nov 2012, 01:36 PM Reply Like
  • deercreekvols
    , contributor
    Comments (5689) | Send Message
     
    $115.8M for what?

     

    Taxpayer money used by a company that declares Chapter 11. Kind of sums up the Administration's idea of getting behind Green energy. $90B here, a few hundred million there.

     

    Is anybody out there?
    Does anybody care?
    18 Nov 2012, 04:16 PM Reply Like
  • WMARKW
    , contributor
    Comments (10447) | Send Message
     
    If you made this stuff up, put it into a book and tried to sell it, no one would buy it because it would be too unbelievable. Go figure.
    18 Nov 2012, 11:08 PM Reply Like
  • kvnm
    , contributor
    Comments (8) | Send Message
     
    It's mind blowing to think that people don't seem to understand the difference between a million and a billion, and that these astronomically large numbers are just thrown around by the bureaucrats.
    19 Nov 2012, 04:10 AM Reply Like
  • Big Time Trader
    , contributor
    Comment (1) | Send Message
     
    Just the first of the payments to reimburse those who donated to the obomination's fraudulent re-election. These pay-outs will continue until the pinhead in the white house runs out of the money he can squeeze out of the people that still have jobs. The gimmes are salivating at that very thought.
    18 Nov 2012, 04:23 PM Reply Like
  • Sammy Lee
    , contributor
    Comments (306) | Send Message
     
    I just want my Obama-phone.
    18 Nov 2012, 05:35 PM Reply Like
  • YellowLab1
    , contributor
    Comments (134) | Send Message
     
    Ever wake up and wonder "is this really happening in our country ?"

     

    Met a lovely Panamanian women at breakfast the other day who asked, "what has happened to your country ? You elect Chavez ? He's no different from Fidel in Cuba. Your country no longer wants to work. Just "give me free stuff.""
    18 Nov 2012, 06:22 PM Reply Like
  • Interesting Times
    , contributor
    Comments (11432) | Send Message
     
    I still can't believe what i can buy with my fiat money...Real S@it !!!
    18 Nov 2012, 07:14 PM Reply Like
  • kobalkid
    , contributor
    Comments (9) | Send Message
     
    I suspect it is hush money... these guys could probably embarass the administration or worse.
    18 Nov 2012, 07:53 PM Reply Like
  • warrenrial
    , contributor
    Comments (559) | Send Message
     
    Socialists are never embarrassed.
    18 Nov 2012, 08:45 PM Reply Like
  • Vaun
    , contributor
    Comments (320) | Send Message
     
    I wouldn't say run into the ground so much as never got off the ground... it was a start-up living off hype and potential for a decade. Investment in failures like this isn't necessarily a bad thing, 10 years and 115 million dollars should have taught us a lot about what works and what doesn't work in battery technology.

     

    Incidentally, we use A123 cells for a Solar Car program at my University (and we bought extras months ago with the suspicion that the company would be out of business soon). The project itself will probably never lead to a commercial solar powered vehicle, but projects like it do push the envelope for what can be done and challenge engineers to test their abilities. For a group of students to build a car that goes down the highway at 55-65 on 1500 watts (about 2 horsepower) is a fairly impressive, and common, engineering feat in the academic world. In the corporate world this would be seen as a sheer waste of capital as there is no way to quantify the returns. Had the market for electric vehicles developed we might be seeing a different story... didn't Henry Ford have to declare bankruptcy a few times?

     

    As far as politics go - Romney's comment on half of the programs going into bankruptcy was fact checked and found to be an exaggeration. It was around 8%. Investing in IPOs is risky business and we can debate whether the government should do so, but researching battery technology is a worthwhile investment in my mind. I may be a bit biased as I am studying Electrical Engineering.
    18 Nov 2012, 09:34 PM Reply Like
  • haleiwahu
    , contributor
    Comments (3542) | Send Message
     
    How does A-123 warrant their product when they are in bankruptcy and nobody is left to honor the warranty? Same with Ener1 or any other company.
    19 Nov 2012, 02:45 PM Reply Like
  • ithinksgreen
    , contributor
    Comments (2) | Send Message
     
    what would happen to stock? would share holders get anything at the end of this drama?
    3 Dec 2012, 02:35 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector