Posted on 05/30/2012 5:05:20 AM PDT by MichCapCon
One of the showcase companies of the green energy movement propped up by the federal stimulus questioned in recent filings with the Securities and Exchange Commission whether it can survive with its mounting debt and problems with defective batteries.
Yet, even with its struggles, its top executives were awarded sweetened severance packages that would give them an extra six-figures in payout if they lose their jobs.
A123 Systems, which opened a Livonia lithium-ion battery plant that is to supply electric cars, has an accumulated deficit of $774 million, according to SEC filings, and stated in its quarterly report that its finances "raise substantial doubt on the Company’s ability to continue as a going concern."
The company laid off 125 workers at its Michigan plants in November 2011 and announced it was closing its factory in Korea in February.
A123 Systems, which received $249.1 million from President Barack Obama’s American Recovery and Reinvestment Act, also stated in its SEC filing on May 15 that it is counting on $100 million from the state of Michigan to help keep it going.
The Michigan Economic Development Corp. said A123 Systems hasn't received any state money from them yet. But A123 Systems stated it expects to receive $100 million for its $200 million in expenses when it meets its filing requirements for the tax year ending Dec. 31, 2012.
One of A123's top customers, Fisker Automotive, had its own $529 million Department of Energy loan reworked after missing deadlines in February. But that didn't stop A123's Board of Directors Compensation Committee from approving increased severance deals with four of its top executives from 12 months base pay to 18 months base pay.
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.
"It looks extremely shaky and extremely shady the way the executives are being taken care of here," said Paul Chesser, associate fellow of the National Legal and Policy Center, who first reported on the executive deals.
Even with the dire quarterly report, the Department of Energy said A123 Systems has long-term potential.
"The Energy Department's investments in alternative vehicle technologies and battery manufacturing and facilities like A123 are an important part of the United States' efforts to lead the global auto industry and reduce America's dependence on foreign oil," said DOE Spokeswoman Jen Stutsman, in an email. "The market for electrified vehicles is expected to triple by 2017, which is why automakers in every part of the world are racing to introduce new models of hybrid and electric vehicles. The investments being made today will help ensure that the jobs that support this rapidly growing industry are created here in the United States."
A123 Spokesman Dan Borgasano said the company was the first non-Chinese battery firm to form a joint venture with a Chinese automaker. He said A123 Systems and China’s largest automaker SAIC are working on a business plan for a jointly developed battery manufacturing facility in China.
"Leading industry analysts agree that A123 is a top-five player in the global automotive lithium-ion battery space,” Borgasano said. "For example, consultancy Roland Berger says A123 will have 11 percent market share in what it predicts will be a $9 billion global market by 2015."
Borgasano said the company wouldn't comment on its financial situation or the compensation of its executives.
A123 Systems has had problems with the batteries it makes at the Livonia plant. Some of the batteries were found to be defective and it cost the company $51.6 million to replace them. One A123 Systems car battery died while being tested by Consumer Reports.
As of its last financial statement, A123 Systems said it had a net loss of $125 million with revenue of $10.8 million for the quarter ending March 31, 2012.
A123 Systems is also facing a lawsuit by people who invested in it between Feb. 28, 2011 and March 23, 2012, due to a claim the company didn't inform the investors of the problems with the defective batteries at the Livonia plant.
The company has failed to live up to its expectations set forth by Gov. Jennifer Granholm and other high ranking politicians of creating thousands of jobs when it was launched in 2010.
“Most Hybrid Owners Choosing Not to Rebuy Hybrids”
http://www.freerepublic.com/focus/f-chat/2883806/posts
Obviously UNEXPECTED by the so-called experts...
But remember folks, hussein is the "great uniter" and "he's for the little guy, promotes the middle class" yadda yadda. ;-/
Stupid comes in any color you want as long as its green.
If anyone wants to be added to the Michigan Cap Con ping list, let me know.
Check this one out.
The people voted against zoning for wind farms by more than 61-39 so the township is transferring 4000 acres to a neighboring township that is already zoned for windmills.
http://www.michigancapitolconfidential.com/16975
Odungo...Raser Technologies. In 2010, the Obama administration gave Raser a $33 million taxpayer funded...
filed for bankruptcy protection in 2012
Abound Solar, Inc. The Obama administration gave Abound Solar a $400 million... the company halted production and laid off 180 employees.
Beacon Power. The Obama administration gave Beacon a $43 million loan In the fall of 2011, Beacon received a delisting notice from Nasdaq and filed for bankruptcy.
SunPower got a $1.2 billion loanguarantee from the Obama administration and as of January, the company owed more than it was worth
Brightsource got a $1.6 billion loan guarantee and posted a string of net losses totaling $177 million
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