The ‘Taxpayer Subsidized Clean Energy Company Losing Money and Laying Off Workers While Execs Get Raises’ Story of the Day
**Written by Doug Powers
In 2010, Michigan Governor/Obama economic advisor Jennifer Granholm called A123 Systems a Recovery Act success story (the key to being able to proclaim anything an unqualified “success story” is to do so before it’s had time to fail). The company and the government predicted that 3,000 more jobs would be added as clean tech reached critical mass.
So far A123 Systems’ pattern is starting to look all too familiar to anyone paying close attention to recipients of “clean energy” subsidies:
In the nine months since David Prystash was named Chief Financial Officer of A123 Systems — the battery manufacturer that received $390.1 million in federal and state subsidies — the company has laid off 125 employees and had a net loss of $172 million through the first three quarters of 2011.
A123 Systems also learned earlier this month that the company that was to be the main purchaser of its batteries — Fisker Automotive — had its federal funding cut off for missing milestones and had to lay off its own employees. A123 Systems had invested $23 million into Fisker.
Yet, this month A123’s Compensation Committee approved a $30,000 raise for Prystash just days after Fisker Automotive announced the U.S. Energy Department had cut off what was left of its $528.7 million loan it had previously received.
Prystash wasn’t the only executive to see a big raise this month. Robert Johnson, vice president of the energy solutions group, got a 20.7 percent pay increase going from $331,250 to $400,000, while Jason Forcier, vice president of the automotive solutions group, saw his pay increase from $331,250 to $350,000. Prystash’s raise was 8.5 percent, going from $350,000 to $380,000.
“It looks highly suspicious,” said Paul Chesser, associate fellow for the National Legal & Policy Center. “It looks like they are trying to pad their top people’s wallets in case something really bad happens.”
Speaking of padding, last summer, Senator Debbie Stabenow visited an A123 factory in Michigan and announced that she would be seeking $2 billion more in taxpayer dollars for “battery research”:
Great idea! If taxpayers pump money in faster than supported companies lose it, they’ll be able to avoid layoffs, hire extra workers, and Granholm, Stabenow and the Obama administration can declare the project a rousing success — again. That way it doesn’t matter if there’s actual consumer demand for the product. It’s econ-101.
It probably doesn’t help these battery manufacturers have confidence in the future of their product to have President Obama out there promoting algae as the car fuel of the future. I suspect some wildly expensive factory retrofittings are on the way.
(h/t Washington Examiner)
**Written by Doug Powers
Twitter @ThePowersThatBeblog comments powered by Disqus
October 2, 2014 09:23 PM by Doug Powers
September 30, 2014 09:20 PM by Doug Powers
September 30, 2014 08:46 AM by Doug Powers
September 23, 2014 12:11 PM by Doug Powers
September 23, 2014 09:34 AM by Doug Powers