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A123 Files for Bankruptcy; Yet another failure of central planning
Topic Started: Oct 18 2012, 01:11 AM (348 Views)
Berton
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A123 Files for Bankruptcy

Yet another failure of central planning


Electric car battery-maker A123 Systems has filed for bankruptcy, according to Bloomberg News.

The company was promoted heavily by President Barack Obama and Michigan politicians and received hundreds of millions of dollars through federal “stimulus” and Michigan Economic Development Corp. programs. Earlier this year, Michigan Capitol Confidential uncovered a video of these politicians promising “hundreds” and “thousands” of jobs – the video was eventually taken down by the MEDC but saved by CapCon.

Despite known financial trouble, just a few months ago A123 awarded sweetened severance packages to its top executives. From CapCon:

Vice President and General Manager of Energy Solutions Group Robert Johnson, for example, would see his severance increase an extra $200,000 from the agreement, boosting it from $400,000 to $600,000. Johnson’s base salary is $400,000 this year, up 21 percent from his 2011 base salary of $331,250. That raise is consistent with a pattern of large pay increases top executives at A123 Systems have received.

In sum: The president of the United States, Michigan’s former governor, the state’s two U.S. senators and the U.S. Secretary of Energy promised thousands of jobs from a company that in a mere two years went bankrupt. Despite a bankruptcy or buyout predicted by outside observers, the company continued to reward its top executives while laying off most of its workforce.

Taxpayers should not be surprised: This is only the latest example where political calculations trumped market ones. Only government bureaucrats spending other people’s money would think this was a good investment.



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That's too bad, they have very promising technology,. I saw this on TV the other night.



The problem with new tech is it is very expensive to get off the ground and get to the point where it is profitable. Look at how expensive calculators, computers and TV's were when they first appeared. However we need to invest in it. Sooner of later we will need it.
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Neutral
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What's too bad is that Obie threw more taxpayer money away.
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Berton
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More wasted stimulus money along with Michigan tax payer money.


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Oct 18 2012, 01:53 AM
What's too bad is that Obie threw more taxpayer money away.
NO, he has the foresight to realize that investing in this stuff is the future. Not all of it will succeed. With your attitude we would still be scraping out a living in the dirt in Europe.
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Pat
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I'm not sure what happened in that company, I was invested in Tesla motors and a a battery start up. Extremely speculative. This is what I hope. Rather than a liquidation, I hope the operations are picked up by a competitor.
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Brewster
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Clueless Bertie again.

Read the truth on the other thread, Bertie.

No money was wasted - it was used to build plants, which have now been purchased by Johnson Controls, a stronger American company, who will undoubtedly make even better use of them.

A company went under, the production goes on. Not one taxpayer penny lost.
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Brewster
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Pat, sorry, typing at same time. Your answer is above.
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Berton
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Extremely speculative and done with taxpayer money.

All the while:
Quote:
 
Vice President and General Manager of Energy Solutions Group Robert Johnson, for example, would see his severance increase an extra $200,000 from the agreement, boosting it from $400,000 to $600,000. Johnson’s base salary is $400,000 this year, up 21 percent from his 2011 base salary of $331,250. That raise is consistent with a pattern of large pay increases top executives at A123 Systems have received.


I think a similar thing happened at Solyndra didn't it?



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Neutral
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Obie should not be investing OUR money in any speculative companies. How many is this and how much money has he thrown away?
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