Job stats elu­sive in lat­est Obama en­ergy stim­u­lus fail­ure

The Washington Times Weekly - - Politics - BY JIM MCELHATTON

Bat­tery maker A123 Sys­tems vowed thou­sands of new jobs when it re­ceived a nearly quar­ter-bil­lion-dol­lar stim­u­lus grant in late 2009, but fed­eral job­track­ing fig­ures show only a few hun­dred po­si­tions were cre­ated be­fore the com­pany joined a grow­ing list of fed­er­ally backed en­ergy busi­nesses that ended in bank­ruptcy.

The lat­est quar­terly re­port on file with a fed­eral stim­u­lus track­ing data­base shows just seven po­si­tions cre­ated through the grant from April to June this year. Pre­vi­ous quar­ters’ job re­ports con­tained any­where from a hand­ful of po­si­tions cre­ated to more than 100 new jobs.

But even when the quar­terly re­ports are com­bined, a to­tal of 408 new po­si­tions were re­ported un­der the stim­u­lus pro­gram since 2009, amount­ing to more than $300,000 spent for each new job re­ported.

“A123 has been strug­gling for some time. Was the com­pany strug­gling when the En­ergy Depart­ment de­cided to award it a fed­eral grant? Did the En­ergy Depart­ment per­form enough due dili­gence be­fore mak­ing this award?” Repub­li­can Sens. Chuck Grass­ley of Iowa and John Thune of South Dakota said when they re­cently pressed En­ergy Depart­ment of­fi­cials to ex­plain the se­lec­tion process.

The com­pany’s bank­ruptcy has spawned re­newed scru­tiny on the En­ergy Depart­ment af­ter it backed sev­eral other busi­nesses now in­volved in high­pro­file bank­rupt­cies, in­clud­ing Solyn­dra LLC, the Cal­i­for­ni­abased so­lar panel man­u­fac­turer that went broke af­ter burn­ing through a half-bil­lion dol­lars in fed­eral money.

En­ergy Depart­ment of­fi­cials say the job cre­ation num­bers are mis­lead­ing, not­ing that the jobs ver­i­fied by The Wash­ing­ton Times through the gov­ern­ment data­base don’t in­clude many other po­si­tions that were cre­ated but not re­ported on the fed­eral Re­cov­ery.gov track­ing web­site.

“Re­cov­ery.gov re­flects a small por­tion of the to­tal em­ploy­ees work­ing on our projects — serv­ing as a quar­terly snap­shot of only those work­ers paid di­rectly with En­ergy Depart­ment funds,” depart­ment spokes­woman Jen Stutsman wrote in an email.

“A123’s man­u­fac­tur­ing fa­cil­i­ties are em­ploy­ing hun­dreds of work­ers on site in Michi­gan — plus work­ers up and down the sup­ply chain — build­ing ad­vanced bat­ter­ies here in the U.S.”

The Mas­sachusetts-based bat­tery maker re­ceived a $249 mil­lion grant in De­cem­ber 2009 through Pres­i­dent Obama’s stim­u­lus pro­gram, of which the com­pany re­ceived about $129 mil­lion be­fore it went bank­rupt this month. Like all other re­cip­i­ents of stim­u­lus loans or grants, A123 Sys­tems was re­quired to re­port job cre­ation sta­tis­tics to Re­cov­ery.gov.

Of­fi­cials also say the grant was used for man­u­fac­tur­ing equip­ment, so the jobs re­ported in­cluded work­ers re­spon­si­ble for in­stalling the fac­tory equip­ment, but not those who would later use that equip­ment dur­ing the assem­bly process.

The com­pany de­clined to dis­cuss how it re­ported jobs through the stim­u­lus pro­gram.

The last quar­terly re­port on file, from March to June 2012, lists seven jobs cre­ated, but it also hinted at other chal­lenges, with the com­pany ac­knowl­edg­ing “op­er­a­tional chal­lenges and qual­ity as­sur­ance is­sues.”

In a quar­terly re­port re­leased months ear­lier, the com­pany cited a weak­en­ing mar­ket and other fac­tors for “neg­a­tively im­pacted” pro­duc­tion lev­els.

The lan­guage con­tained in the stim­u­lus re­ports stands in sharp con­trast to the op­ti­mistic talk of com­pany of­fi­cials less than two years ear­lier.

“Over the next sev­eral years, we ex­pect to cre­ate thou­sands of jobs in Greater Detroit and plan to continue our ex­pan­sion in the area as we do our part in help­ing the U.S. emerge as a global leader in the pro­duc­tion of ad­vanced lithium ion bat­ter­ies,” com­pany Pres­i­dent David Vieau said af­ter the com­pany opened a fac­tory in Livo­nia, Mich., in the fall of 2010.

The com­pany’s seem­ingly bright prospects also got the at­ten­tion of the White House.

“There’s A123, a clean-en­ergy man­u­fac­turer in Michi­gan that just hired its 1,000th worker as de­mand has soared for its ve­hi­cle com­po­nents,” the pres­i­dent said in July 2011.

Last month, Mr. Grass­ley and Mr. Thune pressed En­ergy Depart­ment of­fi­cials to ex­plain whether the depart­ment per­formed “due dili­gence” be­fore award­ing the com­pany so much money.

“The bank­ruptcy raises the prospect that tax­pay­ers will get lit­tle or no re­turn on their in­vest­ment in A123 and will lose mil­lions of dol­lars,” they wrote, adding that the “ad­min­is­tra­tion needs to an­swer for this. The tax­pay­ers shouldn’t have to sub­si­dize poor in­vest­ments in failed en­ergy com­pa­nies.”

Mr. Thune called the A123 stim­u­lus pack­age “an­other ex­am­ple of Pres­i­dent Obama gam­bling with tax­payer dol­lars and pick­ing win­ners and losers in the green en­ergy world.”

“There were clear warn­ing signs that A123 was hav­ing fi­nan­cial prob­lems even as the ad­min­is­tra­tion con­tin­ued pour­ing mil­lions of tax­payer dol­lars into this fail­ing com­pany,” he said.

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