U.S. Gov Gave A123 Systems $1M Grant the Day It Filed for Bankruptcy
November 19, 2012 10:05 AM
comment(s) - last by
Republican Senators want to know why the Energy Department continues to fund failing companies
A123 Systems is the provider for the battery packs used in several electric and hybrid vehicles on the U.S. market today, including the Fisker Karma. A123 produces lithium-ion batteries and was the recipient of multiple federal grants from the U.S. government.
A123 Systems filed for
Chapter 11 bankruptcy
protection on October 16 after a deal with a Chinese auto parts company that would have rescued it collapsed.
The same day the company filed for bankruptcy protection, it received a payment of $946,830 from the U.S. government as a part of its $249 million Department of Energy grant for developing clean energy technology.
The grant has an outstanding balance of $115.8 million, and A123 is still eligible for the remainder of its grant funds if it decides to update or expand its manufacturing capacity.
Republican Senators John Thune and Chuck Grassley have been vocal in opposing any federal grant money being giving to A123 and have pressed the Department of Energy to explain why grant money has been continually given to the battery maker even as it has faltered and filed for bankruptcy protection.
A spokesman for the Energy Department, Bill Gibbons, said, "The Energy Department takes its responsibility to be good stewards of the taxpayers' money very seriously."
This article is over a month old, voting and posting comments is disabled
RE: Wait a second.
11/19/2012 11:46:36 AM
In the automakers' case, when you have a massive pile of debt such as pensions to pay, bankruptcy makes sense since you can get out of paying back all that debt. It also allows you to reform and continue operating as a business.
A123 wasn't trying to continue operating as a company. For a while it's been looking to sell itself to the highest bidder. Basically their executives were looking to dissolve the company, take their money, and run.
"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation
Official: A123 Systems Files for Bankruptcy
October 16, 2012, 4:44 PM
Study Predicts Self-Driving Vehicles Could Rake in Billions
March 6, 2015, 8:34 AM
Dual-Motor Tesla Model S P85D's "Insane Mode" Shocks Passengers
January 28, 2015, 11:18 PM
2016 Cadillac CTS-V Packs 640 hp Punch with 200 mph Reach
January 23, 2015, 3:25 PM
BMW Testing Tech to Allow Users to Auto-Park, Summon Cars Via Smartwatch
December 16, 2014, 9:30 AM
Lamborghini Offers Up $6,000 Leather-Bound Android Smartphone
December 12, 2014, 3:12 PM
Quick Note: GM Teases Next Generation Chevrolet Volt
November 20, 2014, 3:26 PM
Most Popular Articles
America's Largest Cable Company, Comcast, Sees Internet Subscriptions Pass TV
May 4, 2015, 2:46 PM
The Pirate Bay Loses Its Iconic Swedish Dot SE Domains
May 20, 2015, 6:31 PM
Google Finally Fixes Maps Bug That Was Giving Racist, Profane Results
May 21, 2015, 1:43 PM
Can id Software's Doom Find Its Way Out of a 7+ Year Development Hell?
May 19, 2015, 7:38 PM
Chromebooks Expected to See Sales Grow 26 Percent to 7.3 Million Units This Year
May 22, 2015, 1:26 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2015 DailyTech LLC. -
Terms, Conditions & Privacy Information