Electric-Car Firm That Got Biden Visit, $118M in Stimulus, Files for Bankruptcy
By Fred Lucas
http://cnsnews.com/news/article/electric-car-firm-got-biden-visit-118m-stimulus-files-bankruptcy Vice President Joe Biden viewed an electric car that used Ener1 batteries as he toured the Ener1 battery factory in Greenfield, Ind., on Jan. 26, 2011. (White House photo/David Lienemann)
(CNSNews.com) - Ener1--a company that manufactures batteries for electric cars, and that received $118.5 million in federal stimulus money, and that Vice President Joe Biden visited last year the day after President Obama’s State of the Union Address—announced today that it has filed for Chapter 11 bankruptcy protection.
In last year’s State of the Union Address, delivered Jan. 25, 2011, President Obama set a national goal of having a million electric vehicles on the road in the United States by 2015—a goal that would be achieved, Obama said, by taking money out of the oil industry and “investing” it in new technology.
“With more research and incentives, we can break our dependence on oil with biofuels and become the first country to have a million electric vehicles on the road by 2015,” said Obama.
“We need to get behind this innovation,” he said. “And to help pay for it, I'm asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. I don't know if you've noticed, but they're doing just fine on their own. So instead of subsidizing yesterday's energy, let's invest in tomorrow's.”
The next day, Biden visited the Ener1 plant in Greenfield, Ind.—which the White House said at the time had received a $118.5 million grant from the Department of Energy and was the type of investment the president was talking about in his State of the Union.
Brian Levine, deputy domestic policy adviser to Biden, wrote an article about Biden’s visit to Ener1 on the White House webpage for the White House Middle Class Task Force, which Biden leads. The article was headlined “Our Plan to Put One Million Advanced Technology Vehicles on America’s Roads.”
“Last night, President Obama set a goal of making the United States the first country in the world to put one million advanced technology vehicles on the road,” Levine wrote. “This goal is part of the President’s plan to rebuild our economy by investing in innovation to create the jobs and industries of the future.
“Today, Vice President Biden visited Ener1, Inc., a manufacturer of advanced batteries for electric vehicles, in Greenfield, Indiana to announce our plan to reach this one million vehicle goal by 2015,” wrote Levine. “The facility that the Vice President visited would not exist if not for a $118.5 million grant from the Department of Energy, which was part of a $2.4 billion Recovery Act investment in electric vehicles. Ener1 added 120 jobs across the company in 2010 and the future looks bright. They expect to expand the manufacturing and assembly operation in Greenfield from 80 workers today to over a thousand by the start of 2013.”
At the Ener1 plant, Biden made a gaffe, mistakenly referring to Ener1—as Enron1.
“Well, ladies and gentlemen, here at Ener1, we’re going to harness electricity and bring it to the world like Edison did more than a century ago,” said Biden. “We're going to reshape the way Americans drive, the way Americans consume, the way Americans power their lives. And in turn, we're going to reshape America itself. We may not make battery power so cheap that only the rich can afford to drive their cars on imported oil, but—but--with Enron1 (sic) leading the way, we're certainly going to come pretty close.”
Ener1 produces advanced lithium-ion battery systems for electric vehicles.
On Thursday, the company put out a statement announcing that it was filing for Chanter 11 bankruptcy protection in the U.S. Bankruptcy Court in the Southern District of New York.
Ener1, the statement said, "announced that it has reached agreement with its primary investors and lenders on a restructuring plan that will significantly reduce its debt and provide up to $81 million to recapitalize the Company to support its long-term business objectives and strategic plan. To implement this restructuring plan, the Company has voluntarily initiated a 'pre-packaged' Chapter 11 case in U.S. Bankruptcy Court in the Southern District of New York, in which it is requesting that the Court confirm a pre-packaged Plan of Reorganization to implement the restructuring."
The Ener1 Chapter 11 filing came a year to the day after Vice President Biden visited the companies Greenfield plant—and a year to the day after Biden’s aide wrote on the White House website: “They expect to expand the manufacturing and assembly operation in Greenfield from 80 workers today to over a thousand by the start of 2013.”
The Obama administration has previously come under fire for a $535 million loan the Energy Department made to Solyndra, a California-based solar panel company. Solyndra filed for Chapter 11 bankruptcy protection last fall.
In his visit to Ener1 last year, Vice President Biden said that in order to reach the president’s goal of one million “advanced-technology vehicles” by 2015, the administration was not only subsidizing companies like Ener1 but wanted to give a $7,500 rebate to people who purchased an electric car like those that would be powered by Ener1 batteries.
“As the president said last night, by 2015 we we will be the first nation in the world to have a million advanced-technology vehicles on the road, a million,” said Biden.
“So, folks, here's how we're going to do it. Here's how we're going to meet that goal,” said Biden. “It's not enough just to make these batteries. That alone, all by itself, will not get us there. We have to do three more things. We have to convince people at the threshold of this new automobile breakthrough, the new investment. We've got to convince them at the threshold to take a chance, to invest in these vehicles.”
“In order to spur this, to increase the number of people that are using the automobiles run by the batteries you are producing, to increase demand,” said Biden, “we proposed changing what is now an existing tax credit of $7,500 that if you buy an automobile like this to an immediate rebate. You get a check for $7,500--just like the cash for clunkers program. You don't have to wait. You don't have to wait till tax time to get the extra money to pay for that vehicle.”
