As Energy Secretary Ernest Moniz announced last week a renewed push to provide $16 billion in taxpayer-backed loans for “clean” technology vehicles, more bad news emerged from another stimulus-funded electric vehicle company over the weekend.
Smith Electric Vehicles, the truck company that was supposed to “make it” because electrification made so much sense for short, urban delivery routes, halted production at the end of 2013. A quarterly report at Recovery.gov attributed the stoppage to “the company’s tight cash flow situation.”
Last year at this time NLPC reviewed 2012 as “The Year of Taxpayer ‘Green’ Waste,” and that description applied to 2013 as well. But additional trends of government opaqueness and inattention to safety and security – often related to stimulus-funded programs and their corporate beneficiaries – were also revealed.
Smith’s selling point for its step vans was that, unlike electric automobiles, delivery routes in urban areas did not require a long range between refueling (or, recharging). Frequent stops and short distances alleviated the “range anxiety” that accompanies cars like the Nissan Leaf. Frito-Lay, Coca-Cola and Staples were cited as early adopters of the truck demonstration project, which was launched with the help of $32 million in taxpayer funds.
The past year was a dismal one for the passé idea that government would use taxpayer dollars responsibly, and that was nowhere more evident than with President Obama’s initiatives to promote “clean” energy technology companies and projects with so-called “stimulus” funds and other public money. NLPC reported extensively on some of the most egregious examples.
The little-reported bankruptcy of a relatively small electric vehicle battery manufacturer last month illustrates the many problems with President Obama’s green energy stimulus program, and why the more appropriate location for the ramblin’, gamblin’ White House might be Las Vegas.
Taxpayer stimulus waster A123 Systems has not only declared financial bankruptcy – its executives also seem to be driving toward moral bankruptcy as well.
CEO David Vieau and his lieutenants, after receiving well over $279 million in Recovery Act funds and at least $135 million from Michigan taxpayers, have run the company into the ground. Yet they have asked a bankruptcy court judge for his blessing to receive up to $4.2 million in executive and retention bonuses to see through the company’s takeover, likely by Johnson Controls.
As Bloomberg reported today, stimulus-funded electric vehicle battery maker A123 Systems filed bankruptcy in federal court after failing to make a debt payment that was due. Milwaukee Business Times has reported that Johnson Controls will purchase the “automotive business assets” of A123 for $125 million, and that A123 will receive from Johnson $72.5 million in “debtor in possession” financing to continue operating during the sale process.
Regular readers won’t be surprised, as the company’s gradual sink to its current depths – despite receiving hundreds of millions of dollars from taxpayers – has been covered by NLPC since late last year. A review:
Contrary to the excuses that Nissan has supplied about the loss of capacity for owners of the all-electric Leaf in the desert Southwest – especially super-hot Phoenix – a tightly-controlled test of a dozen of the vehicles showed that all of them experienced reduced range. Even a month-old Leaf could not recharge to 100 percent.
The Kansas City Starreported last week that Smith cut its production expectations and warning it is running low on cash, citing filings with the Securities and Exchange Commission. The company announced nearly a year ago it would seek $125 million through an IPO, but now says it hopes to raise about $76 million at a stock price of $16 to $18, according to a Kansas City Business Journalreport.