By on August 10, 2012

In his 2012 State of the Union address, President Barack Obama said this to critics of his lavish green technology initiative:

“I will not cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment here. “

Instead, battery manufacturers first get financed by double-green government handouts, then they are ceded. Says Reuters:

“A123 Systems Inc on Wednesday became the second U.S. government-backed battery maker this year to go overseas for a lifeline – and it turned to China. Auto parts supplier Wanxiang Group will take a controlling interest and invest $450 million in the Massachusetts-based battery maker, which faced running out of cash by the year-end.

Earlier this year, Ener1 Inc, another battery maker that received a government green technology grant, emerged from Chapter 11 bankruptcy under the control of Russian investor Boris Zingarevich. New York-based Ener1 is also a joint-venture partner in China with a Wanxiang subsidiary.”

Reuters says the government-supported boondoggle that is now handed to the Chinese for further exploitation was a pipe dream at best, or a giant lie at worst:

“ A123 promised to create 38,000 U.S. jobs, including 5,900 at its own plants. A123 said on Thursday it has 1,300 workers.

Theodore O’Neill, a former equities analyst with Wunderlich Securities, said A123 “built a factory that’s big enough to meet demand that’s probably not going to materialize until 2020 … They built it much larger than the market turned out to need.”  

In what appears to be the Fast And Furious of government boondoggles, the battery industry is first propped up with government money, then the technology is sold to China.

What’s more, the enemy already seems to have lost interest in the game. Shortly after the state of the union address, it was reported that China will “put an end to blind expansion in industries such as solar energy and wind power” and instead focus on old standbys such as nuclear and shale gas.”

Batteries of course are agnostic to where the juice comes from.  Obama’s adversaries are less cavalier.  “Once again it appears the Department of Energy and the Obama administration have failed to secure sensitive taxpayer-funded intellectual property from being transferred to a foreign adversary, which raises serious national security issues,” said    Rep. Cliff Stearns. Stearns is a Florida Republican and chairman of the House Energy and Commerce Committee’s Subcommittee on Oversight and Investigations.

 

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39 Comments on ““I will not cede the wind or solar or battery industry to China.” Ooops. Never Mind...”


  • avatar
    oboylepr

    What would Mitt Romney do I wonder?

    • 0 avatar
      dolorean

      Whatever he’s told by Karl Rove or the Koch brothers to say and do at the moment.

    • 0 avatar

      Mitt Romney would do what gordon Gekko did to Blue Star Airlines.

      I am an Obama supporter, but to tell ya the truth, I feel the Presidency has become too activist in ways the constitution NEVER intended. We shouldn’t be blaming any president for the economy. The blame should be on congress. We shouldn’t blame the financial collapse on Bush – we should blame it on the congress since Reagan’s administration (blame the wars on Bush and the continuation/escalation on Obama) Congress controls the purse and they should have passed laws to keep mortgages safe and low in fraud.

      • 0 avatar

        Instead of making mortgages safer – they ‘ve been doing just the opposite since Reagan’s presidency. Deregulating and allowing mortgage companies to be even more risky in the name of profit. The movie “Too Big to Fail” lays it out perfectly. Also blame the Federal Reserve for creating a risky credit situation and keeping interest rates artificially low.

    • 0 avatar
      jimmyy

      If I was Romney, I would be practical. First, I would skip wind and solar. They are not pratical.

      But, I would invest a small amount in battery and hybrid technology, but I would make sure that investment paid off. I would watch the spending closly to make sure it was not wasted.

      Perhaps such an investment would help GM, Ford, and Chrysler narrow the huge lead Toyota has on hybrid systems.

      For now, I would skip tha attempt for an all electric car battery. The technology is just not there.

      • 0 avatar
        dolorean

        “If I was Romney, I would be practical. First, I would skip wind and solar. They are not pratical.”

        You gotta get away from Wall Street and NewsCorp media more often. Wind is definitely practical and is making huge strides out in the mid-west. Drive I-70 through Kansas now and you’ll see more wind turbines than sunflowers. Iowa now receives nearly 30% of its energy from wind. Solar, for the individual, is also practical. As an example, a solar powered water heater is not terrifically expensive. Certainly cheaper than heating oil in the long run.

        “Perhaps such an investment would help GM, Ford, and Chrysler narrow the huge lead Toyota has on hybrid systems.”

        You mean like an investment in American Tesla, whom Toyota is already borrowing technology from?

  • avatar
    Advance_92

    If China really is the enemy and adversary we’re making it out to be here I think it’s safe to say we’ve already lost.

    Are they going to sell electric cars here now or is this more a political rant?

    • 0 avatar
      Robert Schwartz

      Don’t worry. Nobody is going to sell BEVs to anyone.

      • 0 avatar
        Luke42

        My local Chevy dealer claims to have sold about a dozen Volts, out here in flyover country.

        The Volt is a nice car, too. Given what I value in a vehicle, I would choose a Volt over a similarly priced BMW or Mercedes every day of the week. After a recent job-change, I can realistically pay for a vehicle in this price range — but, thankfully, I live in a part of the midwest where buying high-end vehicles isn’t mandatory for successful people.

    • 0 avatar
      highdesertcat

      China is indeed an enemy when it comes to its national philosophy and its government-adherence to the Communist principles. And we may have to battle them at some point in the future.

      But the Chinese PEOPLE and Businesses are not our enemies because they are no different in their hopes and dreams, wants and needs, than the rest of us.

      America was the Great Enabler that elevated China from a predominantly agrarian society to the industrial powerhouse it is today.

      It was America that sponsored China into the WTO. It was America that was China’s best customer for its products. And it was America that gave away all its own secrets to China and sold them our harbors and ports. The Europeans didn’t and the other Asians couldn’t.

      So now China has evolved to the point that they are beating us at our own game, on our own turf. Ever since the days of Bill Clinton it was our own national economic policy that got us into deep kim-chee. Our own economic and tax policies that made it more advantageous to outsource than to produce in America.

      Obama talked a great game but in the end he couldn’t make it happen. And that’s why, once again, it all revolves around politics.

      If Obama’s national economic policy is working for you, be sure to vote in November to re-elect him for four more years.

      But even if it isn’t working for you, brace yourself for four more years of Obama v2. No self-respecting Independent is going to choose between Obama and Romney. One is as bad as the other! So we’ll let the Dems and Repubs sort it out on Election day.

      • 0 avatar
        BugBehr

        You’re quite vague. What “economic policies”? You do realize that under Clinton, our government actually had a budget surplus in god knows how many years?

        It’s also quite high-minded of you to postulate that Americans will try to impress their concept of freedom onto other governments… I mean, it’s not like America’s done it before. /endsarcasm

      • 0 avatar
        highdesertcat

        BugBehr, your sarcasm did bring on a smile.

        Having served with the air force in Europe, Japan and Okinawa, Turkey, South Korea and Viet Nam, I saw firsthand how “Americans will try to impress their concept of freedom onto other governments” and other peoples.

        It’s not as bad as it sounds, but it doesn’t always work, to wit Iraq and Afghanistan. It is indeed high-minded for Americans to think that they can convert these sub-human species to American values. That’s why our boys and girls over there continue to be killed and maimed.

        And re Clinton; I did pretty well when Clinton was in the White House. But today’s national economic policies courtesy of Obama and his advisors have me thinking that I actually did better during the Carter presidency, when I was still working.

        I always believed that Carter was the worst president during my lifetime so far. I have to admit, Obama is even worse than Carter was. At least for me, and I no longer have to work.

        Forcing his ideals and policies on the American people have cost many of them dearly, and the wind, solar and battery industry debacle is just barely scratching the surface when it comes to failed Obama policies. The Green and Environmentalist Far Left policies do not seem to work very well for the majority.

        So I guess it all depends on which end of the welfare line a person is at. If they are on the receiving end of the Obama welfare “spreading America’s wealth around” queue raking in the dough as in “money for nothin’”, life is pretty good.

        But if you are unemployed and about to lose everything you busted your gut for, or are employed and paying those taxes that allow others to get their “money for nothin’”, then things may not look so rosy.

        It seems clear to me that what Obama cares about more than anything else in spite of his dismal economic track record, is keeping his own job.

        That said, he’ll get to keep his job for a second term. No doubt about it.

  • avatar
    dejal1

    Rep. Stearns has a point. What collateral does the US ask for when handing out a loan?

    This isn’t a Bush did it to, but I’d be surprised if previous adminstrations demanded something in return for the loans. Governments usually stop at jobs for what the company getting the loan provides.

    • 0 avatar
      jimmyy

      This is a great idea. Stock ownership for any government investment. Taking this idea further, all those low interest rate loans being handed out by the energy department should require an equity stake in the firm. For example, if the government got an equity stake in Ford in return for the low interest rate loans, I would feel some form capitalism has returned to America. While I would prefer the energy department’s loan program be terminated, compared to the free handouts occuring now, I feel we would be better off with a government equity stake that woud be sold off after a time. But, the equity stake woud need to be sold off. I would not want a permanent government ownership of our companies. For example, if equity shareholders knew Ford wanted a low interest rate loan government handout from the energy department, they would push back because of the equity dilution.

  • avatar
    el scotto

    Collateral? You don’t need any collateral when the government is hoping to change a market by itself. The fact 3 billion dollars were pissed away is NOT the administrations fault; it’s all those people who weren’t early adopters of this great new thing.

  • avatar
    GS650G

    From $30 a share to .50 a pop. What a waste. The Chinese got quite a bargain. Thanks Barry!

  • avatar
    Mzdaspd304

    So really are we to blame Obama for giving them grant money from U.S. taxpayers or mad at the companies who just screwed the tax payers big time.

    That’s like being mad at a financial advisor for picking out mutual funds for you but the funds tank because of what the fund manager did…doesn’t seem really all that fair to be mad at the advisor does it?

    • 0 avatar
      jkross22

      Mzda, the financial advisor’s job is to know who the fund manager is, know what their record is, and map a client’s risk/reward desires to the investment. If the financial advisor didn’t know a fund manager left and went elsewhere, he wasn’t doing his job. He wasn’t doing his job if he left the money in the fund while it spiraled downward like A123 stock did.

      Where is the accountability? Are we surprised at the end result of government handouts with no oversite? Piss poor leadership.

      Stop making excuses. I don’t know if Obama is to blame, but if he is not, who will be fired for wasting money like this? Just let me know when and who it is, and I’ll take it all back.

      • 0 avatar
        Mzdaspd304

        I’m not making excuses for anyone. Oh, if you are a FA who is rep for multiple mutual fund vendors when combined makes up for hundreds if not thousands of MF’s you can sell, it is impossible to “know” each fund manager of these MF’s. You’re guess as good as anyone else looking of a stat sheet of a specific fund manager.

        You borrow money from your parents and you stiff them. Should you be in trouble for stiffing your parents or should your parents be in trouble for not assesing your ‘risk’ that you might not pay it back?

      • 0 avatar
        jkross22

        “You borrow money from your parents and you stiff them. Should you be in trouble for stiffing your parents or should your parents be in trouble for not assesing your ‘risk’ that you might not pay it back?”

        Yes, you should and yes, they should. This garbage of zero accountability is how we got in this mess. Bailouts, whether at the federal, state, county, city or local level rewards bad behavior.

        “You’re guess as good as anyone else looking of a stat sheet of a specific fund manager.”

        No, it’s not. You are hiring a professional who needs to know who these people are. Sounds like you have low expectations of others. If a guy changing your oil forgets to re-fill the engine with fresh oil, and as a result, your engine seizes, should you hold that person accountable? After all, it was just a mistake.

      • 0 avatar
        Mzdaspd304

        “Yes, you should and yes, they should. This garbage of zero accountability is how we got in this mess. Bailouts, whether at the federal, state, county, city or local level rewards bad behavior.”

        To an extent you are right so but then by your logic: Either A.) we flip a coin whatever side it lands on, that person is “fired.” Or B.) You chastise everyone that is involved. Which in this situation would be pretty much removing everyone that holds a gov’t office in D.C…Every senator, every house member….The point is that there are too many people involved to “fire” so you say screw it, fire the president he is supposed to be in charge? Now, you just took the personal accountability (which you seem staunchly for) of many and pawned it on one person…I think not. My department should be able to embezzle millions from our company, walk away scott free, (because there is just too many of us to fire all at once) and tell them its our managers fault for not keeping an eye on us, fire him instead.

        In a situation like this you can’t make a win-win or lose-lose situation. The president, with the approval of others made a bad investment decision. Shame on him, I agree, but as soon as the money left the presidents hands and went into the hands of the company, the ball is in their court. They have two options, shaft the tax payers (better R&D and sell out) or use it for the economic benefit of the U.S.. They chose to shaft the tax payers. They are the ones who should be chastised. It is the end user who knowingly was doing the wrong thing and did it anyway.

        “No, it’s not. You are hiring a professional who needs to know who these people are. Sounds like you have low expectations of others.”

        Well..No not really… Think about massive investment firms. Wells-Fargo, Edward Jones, etc…These companies have tens of thousands of FA’s selling tens of thousands of MF’s daily and you are to tell me that EVERY FA “knows” EVERY fund manager? I think not. Yet these companies are still successful….

        I dare you to go your FA and ask him who the fund manager is on each of the mutual funds that you have picked out on your 401k and I can almost promise you that he will have no effin clue who it is without looking up everything about the guy.

      • 0 avatar
        jkross22

        Mzda,

        My point is that whether it’s the guy changing the oil in your car, your FA or absentee parenting yielding the expected result, we ought to think differently about accountability. If your FA can’t answer basic questions about the funds they recommend, it’s time to find someone else.

        “The president, with the approval of others made a bad investment decision. Shame on him, I agree, but as soon as the money left the presidents hands and went into the hands of the company, the ball is in their court.”

        Tell me, how many times does the president, or parent or mechanic get to make bad decisions and not be held accountable?

    • 0 avatar
      Mark MacInnis

      A professional VC person (i.e., one NOT doing this for political purposes) would have been more likely to be able to foresee that the loan guarantees would not be sufficient to prevent the companies from going belly up.

      So, not only did the taxpayer subsidize these companies with money borrowed from China, the firms used the money to do more R&D to improve their product with the borrowed money. Which we then sold the companies and their U.S.-paid-for-technology back to the Chinese for pennies on the dollar. China ends up with the technology, no US-owned competitors, and the US taxpayer OWING THEM for the money plus interest that we paid for the technology in the first place.

      Yesterday, Obama actually said, “We need to bail out ALL industries like we bailed out the Auto industry.”

      No wonder the Chinese laugh at Obama, laugh at the US and look forward (shortly) for the day when they can, first, sail into Taiwan harbor and take over without the U.S. so much as looking up from “American Idol” on our Chinese-made big screens to notice, and second, effectively ‘own’ the United States economy, lock, stock and Treasury Department.

      This is what Obama hath wrought.

      And still much of America, including many of the B&B, want this man re-elected.

      Inconceivable. Sad. Tragic. Astounding. (This is what happens when we let uneducated people, interested only in “what’s in it for me?” vote.)

      • 0 avatar
        jkross22

        ““We need to bail out ALL industries like we bailed out the Auto industry.””

        This kind of talk is appealing to the masses who are either too dumb, ignorant or lazy to figure out what this means and why it’s important. But, don’t forget it was GWB that got this ball rolling – this can’t be hung on Obama alone. Both sides are cashing big checks to keep perpetuating this foolishness. Obama and his team of crack economists and forward thinkers (aka those bought by industry) are simply making the hamster wheel go faster while it’s their turn.

        The other side of rented politicians is just waiting their turn in line to fleece more money out of us ATM’s with legs.

      • 0 avatar
        Mzdaspd304

        (This is what happens when we let uneducated people, interested only in “what’s in it for me?” vote.)

        So by your logic: Anyone who votes blue is uneducated. Anyone red – the superior educated elite. Got it.

      • 0 avatar
        dima

        Mzda, how did you come to the conclusion that anyone who votes blue is uneducated. Anyone red – the superior educated elite. I did not see him spelling this out. Why would you assume this? From what I see both parties exercise crony capitalism.

  • avatar
    Geekcarlover

    What? A technology developed here in the US can be reproduced (copied) in China, and then sold for a lower price on the world market!?! Who could ever have seen that coming?

    • 0 avatar
      dima

      Well what do you expect when major companies are rushing to open up R&D centers in China. From theirs point of view thay can have 5 engeneers for the price of one, great savings, but it open up leacks of IP’s.

  • avatar
    cheezeweggie

    With the petty red vs blue politics and the two-paragraph write ups on junkyard cars this blog is turning into a pile of garbage.

    • 0 avatar
      jdevault

      Agree. Between the rehash of Daily Caller conspiracy theories and the latest from noted bipartisan Darrel Issa the site is definitely becoming ideological rather than car focused. I’ll miss reviews by Baruth,Steve Lang and Karesh.

    • 0 avatar
      Duncan

      I don’t think TTAC has a daily limit on the number of postings. One politically charged post doesn’t trash a review. That being said – what’s the deal with the lack of Karesh reviews? He used to be so much more prolific. I hope his tempo picks up, I really like his style.

      Also, I doubt Bertel is trying to push a political agenda. I imagine his occasional highly charged post makes business sense for TTAC and provides a little personal amusement. If you don’t like reading about politics and junkyard cars, don’t click the articles that have pictures of President Obama or rusting old cars. While I wouldn’t go as far as to praise the layout of this site, I certainly don’t find it difficult to read the articles I find interesting and avoid the ones in which I have no interest.

  • avatar
    Wheatridger

    The biggest problem with the economic politics of renewable energy is that government support is so inconsistent. When administrations and Congresses change hands, incentives are turned on suddenly and shut off just as quickly. This has led to a second boon and bust cycle in the solar industry. Yes, we backed US solar manufacturers, but China beat our support many times over and won the race. With the panel market under control they’re reverting to old Soviet-era power schemes under the banner of “new energy,” as if there’s anything new about water power.

    There are better ways to encourage cleaner, sustainable solutions. Here in Colorado about a decade ago, we passed a law demanding 20% of our electricity come from solar and wind. We’ve since met that goal and increased it to 30% by 2020. One windy day recently, more than 50% of the power into our grid was renewable. Subsidies come from the private energy corporation that avoids the need to build new fossil fuel plants.

    The most simple, fair and consistent way to encourage the change would be a carbon tax, but not even the so-called Socialist n the White House will touch that live wire.

    • 0 avatar
      shaker

      That’s the closest thing to a “right answer” that I’ve seen in this thread.

      Obama’s “pipe dream”; spending Apollo-program levels of money to jump-start the alternate energy industry, and to move us away from the previous century’s model has been opposed at almost every turn, so funding is inconsistent, and likely insufficient to get the job done.
      So, when people whine about the Chinese stepping in, well, we could have kept that from happening with additional funding, but powerful political (and big oil) forces are aligned against this.

      Once again, our national security will suffer for it.

      Money spent by taxpayers NOW to develop an alternate energy infrastructure will allow us to keep a decent standard of living and provide us some “insulation” against the whims of the oil and gas peddlers, which now have us believing that we must trade clean water and air for our “freedom”, while their idea of “freedom” is to drill millions of holes in the USA and squeeze it dry, making profit all the while, and hiding behind the “but it creates jobs” defense.

      Alternative energy will create jobs far into the future, long after oil and gas starts to decline as a viable fuel source – don’t let the pursuit of today’s profit delay the move towards true freedom – the freedom from fossil fuels.

      Edit: Check this video to see the terrible future that awaits us when EV’s are more common.

      http://green.autoblog.com/2012/08/09/watch-audis-r8-e-tron-quickly-and-quietly-round-the-ring-in-8/#continued

      This would have been considered impossible 15 years ago.

  • avatar
    oldyak

    Let the Chinese have them…and loose billions of dollars propping them up.
    Good deal for the U.S.
    Bad for the Chi-Coms.
    Get a Kroger card and get a discount on your gas!
    The government doesn’t control Kroger,nor do the Chi-Coms.
    I really wish battery prices would come down though..I need a new one for my son`s 1993 Lumina.

    • 0 avatar
      Luke42

      A123 has a real product, and a good product that’s been on the market for a while. The Chinese will make a ton of money selling us A123 cells over the next couple of decades.

      • 0 avatar
        Duncan

        Agreed. Lithium battery technology sure appears to have legs. If A123 can drive down costs (lower cost hazmat disposal would have a big impact) they’ll have a huge market.

        There are a lot of applications for advanced battery technology outside of BEVs.

  • avatar
    Herm

    I can just see the articles 20 years from now when most cars are electric and there are NO battery manufacturers in the US.


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