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Friday
Jan272012

Another Obama-Backed Green Company Files for Bankruptcy

Comstock/Thinkstock(WASHINGTON) -- The parent company of an electric car battery maker that received more than $100 million in government funding from the Obama administration has filed for bankruptcy protection, the company announced Thursday.

Alex Sorokin, the CEO for lithium-ion battery manufacturer Ener1, said the company suffered when demand for the batteries dropped as fewer Americans than expected opted for electric cars.

"This was a difficult, but necessary, decision for our company," Sorokin said in a statement on its website. "We moved aggressively to reduce costs and shift focus when the marketplace did not evolve as quickly as anticipated. Our business plan was impacted when demand for lithium-ion batteries slowed due to lower-than-expected adoption for electric passenger vehicles."

EnerDel, a subsidiary of Ener1 dedicated to making batteries for electric cars, was awarded a $118 million grant from the Energy Department in 2009 as part of President Obama's taxpayer-funded economic stimulus package and green energy push. Ener1 said that the bankruptcy filing and newly announced company restructuring would allow its subsidiaries, including EnerDel, to "continue normal operation."

The filing came exactly a year after Vice President Joe Biden visited an Ener1 manufacturing plant in Indiana where he proclaimed the company was the "start" to reshaping the way Americans drive and "the way Americans power their lives."

"A year and a half ago, this administration made a judgment. We decided it's not sufficient to create new jobs -- we have to create whole new industries," Biden told the plant workers then. "We're back in the game." But much like another Obama-backed green venture, it's now game over for Ener1.

Ener1's financial collapse prompted a comparison to the doomed solar energy company Solyndra from Rep. Cliff Sterns, R.-Fla., who has been one of President Obama's most vocal critics concerning the green energy loan guarantee initiative. Solynda received more than half a billion dollars in taxpayer money as a loan guarantee from the Energy Department in 2009, two years before it collapsed in August 2011.

Like Biden at Ener1, President Obama toured a Solyndra plant in California in May 2010 where he touted its potential -- despite the fact that the company was already troubled, critics allege.

Solyndra is now the target of a federal criminal investigation aimed at determining whether the company was awarded the massive loan thanks to undue political influence -- prompted by a major Obama campaign funds "bundler" -- despite the Solyndra's mounting trouble behind the scenes at the time.

A spokesperson for the Energy Department did not immediately return requests for comment on this report.

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