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News & Politics News & Politics

Obama Admin Gave Electric Car Battery Maker $1 Million The Day It Filed For Bankruptcy…

Posted by on Nov. 17, 2012 at 8:02 AM
  • 43 Replies

 (WZ)

Only in Obamaland.

(Reuters) – The Obama administration provided struggling battery maker A123 Systems Inc with nearly $1 million on the day it filed for bankruptcy, the company told lawmakers investigating its government grant.

The company, which makes lithium ion batteries for electric cars, filed for Chapter 11 bankruptcy protection last month after a rescue deal with Chinese auto parts supplier Wanxiang Group fell apart.

That same day, October 16, A123 received a $946,830 payment as part of its $249 million clean energy grant from the Energy Department, the company said in a letter, obtained by Reuters, to Republican Senators John Thune and Chuck Grassley.

In the letter, dated November 14, A123 said the October payment was the most recent disbursement it had received from the government, with an additional $115.8 million still outstanding on the grant.

Thune and Grassley have pressed the Energy Department for more details about its funding of A123 as the company has faltered.

“The Department of Energy needs to answer for why it appears to put federal grants on auto-pilot to the detriment of U.S. taxpayers,” Senators Thune and Grassley said in a statement. “This can’t stand.”

by on Nov. 17, 2012 at 8:02 AM
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Replies (1-10):
imamomzilla
by on Nov. 17, 2012 at 8:02 AM

 Ugh

MomTiara19
by Silver Member on Nov. 17, 2012 at 8:07 AM

Obama wants America to be more independent(just like when he saved the American Auto industry in Ohio~they are thriving economically) and have our cars run on electric batteries and less on gas.This really became apparant during the Sandy storm when people were almost killing each other waiting in long lines for gas.This will be huge for our economy growth.

gsprofval
by Gold Member on Nov. 17, 2012 at 10:12 AM
1 mom liked this

Is this the company owned by S. Korea that hasn't produced one battery for sale, but employees get paid for sitting around all day?

The electric batties are for the Chevy Volt; only the government, i.e. odumba, has bought any of the Volts to the tune of $90,000 each.

Carpy
by Platinum Member on Nov. 17, 2012 at 10:29 AM
1 mom liked this

More money down the toilet.

rocketracer
by Gold Member on Nov. 17, 2012 at 10:38 AM
1 mom liked this

In my area the Chevy Volts are so cheap to lease....no money down, about $200 or less/mo to lease...GM isn't making any money on them, but that's probably the goal.... 

Quoting gsprofval:

Is this the company owned by S. Korea that hasn't produced one battery for sale, but employees get paid for sitting around all day?

The electric batties are for the Chevy Volt; only the government, i.e. odumba, has bought any of the Volts to the tune of $90,000 each.


gsprofval
by Gold Member on Nov. 17, 2012 at 2:18 PM
1 mom liked this

The Volts sell for $30,000 but cost GM $90,000 to make--pretty dumb move, GM and obama.

Quoting rocketracer:

In my area the Chevy Volts are so cheap to lease....no money down, about $200 or less/mo to lease...GM isn't making any money on them, but that's probably the goal.... 

Quoting gsprofval:

Is this the company owned by S. Korea that hasn't produced one battery for sale, but employees get paid for sitting around all day?

The electric batties are for the Chevy Volt; only the government, i.e. odumba, has bought any of the Volts to the tune of $90,000 each.

 


UpSheRises
by on Nov. 17, 2012 at 2:38 PM

Auto-pilot? It's called a payment schedule and is a part of the contractual agreement.

shimamab
by on Nov. 17, 2012 at 2:49 PM
2 moms liked this
From Forbes:

Bob Lutz, Contributor
I'm a car guy, and that's (mostly) what I write about.

I was surprised to read Ben Klayman’s piece on alleged astronomical per-unit losses on the Chevrolet “Volt.” Ben is usually a solid professional who checks his facts.
The statement that GM “loses” over $40K per Volt is preposterous. What the “analyst” in whom poor Ben Klayman placed his faith has done is to divide the total development cost and plant investment by the number of Volts produced thus far. That’s like saying that a real estate company that puts up a $10 million building and has rental income of one million the first year is “losing” 9 million dollars, or several hundred thousand per renter.
Listen, Ben and Micheline: that’s not how car business cost accounting works.
Let me provide a look at how a car company tracks profitability of a product program: measured are material cost and labor, and these are deducted from the selling price. The positive difference is called “gross margin.” Then, one allocates per-unit “fixed cost” (advertising, general overhead, etc.) plus per-unit depreciation and amortization of the initial investment, based on the TOTAL NUMBER TO BE PRODUCED OVER THE LIFETIME of the product. If the margin, after all deductions, is still positive, then we call it a “fully accounted profit,” and the car is a winner.
The Volt “variable cost” (labor and materials, without revealing any confidential GM information), looks very roughly like this: A Li-Ion battery today runs about $350 per KWh. The Volt’s is 16KWh, so that’s roughly $6000. Add $4,000 for the battery pack structure, the cooling, the high-voltage wiring, the motor and the power electronics. So, that’s the electric portion. Add about 20 hours of assembly labor which we’ll round to a very generous $1000. The dealer net price is, say, $37,000. We now have $26,000 left for the rest of the car, which, cost-wise, is about equal to a Chevy “Cruze” which sells for around $22,000 retail! (And the Volt has no costly conventional transmission.) Thus, the “Volt”, by my estimate, is either close to “variable break-even” or may be on the cusp of a positive gross margin. Deduct the per-unit allocation for all fixed cost, depreciation and amortization and it is, surely, still “under water”….but not by much, and less and less so as the volume builds and other, higher-margin GM cars, like the Cadillac ELR, piggy-back off of the Volt’s initial investment.
Maybe the Volt, a first-generation technology masterpiece and the most-awarded car in automotive history, will never make a really decent profit.
But succeeding generations of the same technology will. Meanwhile, the happy Volt buyers (most satisfied owners of any nameplate in the market) are getting more that they paid for. (Is that so bad?)
We won’t even factor in the profound halo effect the introduction of the Volt has had on GM’s reputation as a leader in environmental automotive technology; it’s priceless, and could never have been achieved without it.
So, once again, the knee-jerk Volt bashers, devoid of any real knowledge, have had their usual joyous verbal catharsis, but the car doesn’t care: The volumes are building globally and it’s doing exactly what it was designed to do.


Quoting gsprofval:

The Volts sell for $30,000 but cost GM $90,000 to make--pretty dumb move, GM and obama.


Quoting rocketracer:


In my area the Chevy Volts are so cheap to lease....no money down, about $200 or less/mo to lease...GM isn't making any money on them, but that's probably the goal.... 


Quoting gsprofval:


Is this the company owned by S. Korea that hasn't produced one battery for sale, but employees get paid for sitting around all day?


The electric batties are for the Chevy Volt; only the government, i.e. odumba, has bought any of the Volts to the tune of $90,000 each.


 



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Simmeringhearts
by on Nov. 17, 2012 at 2:59 PM
1 mom liked this

Ok, granted I live in Iowa. But, I have a tv. I thought there were gas lines because the electricity wasn't on and the gas stations couldn't pump the gas.

Quoting MomTiara19:

Obama wants America to be more independent(just like when he saved the American Auto industry in Ohio~they are thriving economically) and have our cars run on electric batteries and less on gas.This really became apparant during the Sandy storm when people were almost killing each other waiting in long lines for gas.This will be huge for our economy growth.


Billiejeens
by Ruby Member on Nov. 17, 2012 at 3:58 PM
2 moms liked this


Quoting MomTiara19:

Obama wants America to be more independent(just like when he saved the American Auto industry in Ohio~they are thriving economically) and have our cars run on electric batteries and less on gas.This really became apparant during the Sandy storm when people were almost killing each other waiting in long lines for gas.This will be huge for our economy growth.

What is wrong with you?

There is no growth, they don't make anything.

They take your tax money (well probably not yours) and don't do anything.

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