A123 Systems Bankruptcy Is an Opportunity for Obama to Stand Up for Clean Energy Investments

By Stephen Lacey

 Reposted in full with permission from Climate Progress:

This morning brought a piece of news that some in the press will label an “October surprise” for the Obama campaign.

A123 Systems, a manufacturer of lithium ion batteries used for electric vehicles and grid storage, has filed for bankruptcy protection and reached an agreement to sell two U.S. manufacturing plants to competitor Johnson Controls. The company received $129 million in grants to build its facilities.

Let the political messaging begin.

Journalists will likely paint this another “blow to the White House” over its support for clean energy. The pundits at Fox News are probably busy rehearsing their “crony capitalism” lines with zombie-like discipline. And Mitt Romney is doubtless penciling in a new zinger on “picking winners and losers” for tonight’s presidential debate.

Actually, it’s a good opportunity for Obama to stand up and defend federal investments in clean energy.

Today’s announcement, while certainly unfortunate for a once-promising American cleantech company, is neither a huge surprise, nor the loss of a taxpayer investment.

In fact, the only taxpayer funds provided to A123 Systems were for domestic manufacturing facilities — plants that have now been purchased by Johnson Controls, a leading company in the advanced automobile sector (Already, journalists are reporting that A123 Systems received $249 million in grants. Actually, the company only took down $129 million in grants for building its manufacturing facilities).

“Our interest in A123 Systems is consistent with our long-term growth strategies and overall commitment to the development of the advanced battery industry,” said Alex Molinaroli, president of Johnson Controls’ power solutions arm, in a statement.

So an American company purchases manufacturing facilities and other assets from another American company — keeping that advanced battery production in the U.S. — and explains that it’s “consistent with our long-term growth strategies.”

That’s quite an interesting story. But it doesn’t exactly make good election-year messaging.

Facts be damned, opponents are lining up to use A123 Systems as a weapon for attacking President Obama and Democrats for their support of clean energy.

“Obama/Stabenow choose badly with $ borrowed from China. A123 goes bankrupt and our kids are left holding the bag,” tweeted former Representative Pete Hoekstra (R-MI) this morning.

What Hoekstra doesn’t mention is that he co-signed a letter in 2009 requesting funds for a Michigan-based manufacturing facility proposed by A123 Systems. He, like virtually every other lawmaker across the political spectrum, explained that such investments are “vital home-grown technologies and job creation in a new industry essential to jump start the development of a U.S. manufacturing base.”

Hoekstra is one of dozens of Republican lawmakers — including Vice Presidential Candidate Paul Ryan — who asked for hundreds of millions of dollars in grants and loan guarantees for clean energy projects in their districts. But that was before it became a political strategy to exploit the failure of innovative companies in order to win an election.

The A123 issue could well come up in the presidential debate tonight between Obama and Romney.

In the last debate, Romney tried to claim that “nearly half” of clean energy companies supported by the stimulus package had gone bankrupt. That absurd claim was quickly debunked and the Romney campaign had to walk it back the next day, saying he was talking only about the loan guarantee program. In fact, out of the dozens of companies that received loan guarantees, only three have gone bankrupt.

Even if the attacks have already gotten absurdly out of proportion, this is still a legitimate story. In 2008, Obama made renewable energy a major part of his campaign. In 2009, he made it a major part of the stimulus package. So when a company fails after getting support from the Administration, it’s bound to be brought up.

But Obama should be able to defend his record. And sadly, he failed to do that in the last debate.

A123 Systems is one of 29 companies that have received funding in order to build dozens of manufacturing facilities throughout the U.S. for batteries, new types of engines, and a variety of other components to advanced vehicles.

In addition, since Obama came into office, we’ve seen

  • a doubling of non-hydro renewable electricity
  • tens of thousands of jobs supported in the sector
  • some of the biggest “first-of-a-kind” wind, solar, and biofuels facilities built
  • new efficiency standards for the automotive sector that will continue to spur new innovations in technology.

And let’s not forget: Romney was once an avid supporter of advanced vehicle manufacturing who called for “a joint public-private partnership to invest in new technology related to fuel efficiency as well as new sources of energy.”

Polls show the American people still want to see strong federal investments in clean energy technologies. When this issue inevitably comes up tonight, Obama should be able to look confidently at the American people and explain the why he believes they are economically and environmentally important — as well as put the record straight on the accomplishments we’ve made.