In the fall of 2009, Governor Deval Patrick joined chief executive David Vieau on a tour of what was perhaps Massachusetts’ hottest company: A123 Systems Inc.
The Waltham battery maker had just raised $380 million in an initial public offering as investors shrugged off the recession and drove the stock 50 percent above the company’s initial pricing. Nearly $400 million in government grants, loans, and tax incentives were already rolling into the company on the promise of a technology that could help transform the nation’s flailing auto industry into a leader in electric cars.
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Oh yes don't forget to give America one last parting shot. Make sure you sell A123 Systems Inc technology to the Chinese.
This is not an unexpected failure of A123 (or Solyndra) it's a natural and expected consequence of the way the US is doing the investment. Many startups fail, and venture capital firms are required to continue to invest over time or pull the plug. If the US is not going to continue the support (until the company is able to fund itself) then it is going to see a failure rate higher than venure firms rates. The Chinese, I believe, invest over time, and do what is required to keep the companies growing. I don't think there is a model for the US to follow that would be both effective and politically acceptable. Perhaps funding Research and early Development is all we can do.
Another example of Obama stimulus funding program. There are thousands examples of similar boondoogles in other industries. what a waste of taxpayer funds.
Not to mention the technology the Chinese got that WE paid for! Get Obama out of there!!
This is why all the talk about helping small business does not pan out. It is really talk baout helping VCs manage risk. The business plan was flawed to begin with and investors were looking for a safe bet. The venture capitalists flocked in because the they saw the government funding. But they VCs want quick returns so the business plan numbers have ot be inflated. IF the VCs had any appetite for risk, things would have gone slowly.
This article states: "Most notably, longtime investor North Bridge — which today employs Fulop and A123 board member Jeffrey McCarthy — sold all of its A123 stock by Sept. 10. Neither Fulop or McCarthy, who resigned from A123’s board earlier this month, responded to repeated requests for comment." Perhaps A123 top executives are mute because investors allege securities laws violations in a complaint filed in US District Court stating top officials have violated the Securities Exchange Act of 1934 by issuing allegedly false and misleading statements about the company. http://www.prlog.org/11888307-a123-systems-inc-nasdaqaone-investor-lawsuit-deadline-on-june-1.html Interestingly, the CFO of Flo-Design Wind Turbine Corp is Matthew Commons who worked for Enron and The NorthBridge Group, (same North Bridge investor in A123?). http://greenovationconference.com/conference-info/speaker_bios.cfm MA Executive Energy Secretary Ian Bowles served as Advisor to Flo-Design wind turbine that got a $3 million grant from Clean Energy Center (MACEC), with Ian Bowles as Founding Chairman of the MACEC. Flo-Design also received $8.3 in stimulus funding. Citizens' benefit by Flo-Design Wind Turbine is our opportunity to view a $11.3 million dollar publicly-funded view of an oversized room fan during a landing approach at Logan airport. Flodesign- http://bjdurk.newsvine.com/_news/2012/03/27/10889807-Massachusetts-green-bubble-alert-flodesign A123 Systems produced the battery used in 239 recalled Karma cars by Fisker made in Finland, (US jobs?). Not one $100,000 publicly-funded Karma car couldn't make it to the test site to be rated by Consumer Reports. Massachusetts Evergreen Solar, Beacon Power, Konarka Technologies, and now A123 Systems are bankrupt with socialized debt. Citizens borrowed the money, in effect, to invest in MA green bubbles companies bursting around us. Follow the money after A123 layoffs. "VP of Automotive Systems Jason Forcier saw his pay rise 32 percent from 2010, to $350,000." "Other SEC records show A123 VPs Johnson and Forcier each had a base salary of $265,000 in 2010, but received more than $744,000 and $739,000 in total compensation, respectively, with bonuses and stock options included. Johnson’s total remuneration in 2008 and 2009 was nearly $1.2 million and $800,000 respectively, while Forcier’s was more than $1.3 million in 2009, the year he was hired." http://nlpc.org/stories/2012/02/15/after-layoffs-big-exec-raises-taxpayer-funded-a123