Romney Didn't Pounce on the A123 Bankruptcy During the Debate. Here's Why.
In the first Presidential debate, Mitt Romney named both Fisker Automotive and Tesla Motors as green tech companies that President Obama had foolishly poured hundreds of millions of the taxpayers’ money. He pounced on Solyndra’s bankruptcy as proof the clean energy strategy wasn’t working. Given that, Romney would seem to have been handed a golden opportunity when, on the very morning of the second debate, Obama’s favorite battery company, A123, said it was filing for bankruptcy.
An Opportunity Missed?
Bloggers here and here touted the filing as ammunition for Romney. But the Republican hopeful didn’t mention A123 during the Long Island fisticuffs, or repeat his highly specific green tech attacks—despite Obama’s giving him repeated openings. What happened? My reading of the situation is that A123, as tempting as it might be as a target, cuts both ways politically.
A123 built two battery factories in Michigan with federal help, but they’re not being shut down. Instead, A123’s assets are being sold to battery giant Johnson Controls—an American company!—for $125 million. That follows A123’s flirtation with China’s Wanxiang Group, which had wanted to buy up to 80 percent of the company. One reason that deal—subject to approval from American regulators—soured was political objections from the likes of Senator Charles Grassley (R-IA). But even Grassley saw “something positive” in A123 going to Johnson Controls.
A Statement Instead
Conservative blogger Michelle Malkin urged Romney to hit hard on A123 in a tweet, and environmental site Grist seemed to think a mention of A123 was an inevitability. "During tonight’s second presidential debate, you will hear mention of A123. There’s no question of that," it said.
Romney held his fire, though he didn't totally ignore what happened at A123. His aide Andrea Saul described it in a statement as "yet another failure for the President's disastrous strategy of gambling away billions of taxpayer dollars on a strategy of government-led growth that simply doesn't work." But that statement, besides repeating the word "strategy" twice, wasn't heard by many millions during the debate. They did talk about the auto industry bailout, and here's video on that:
A123 got a $249.2 million grant from Obama, and drew down $132 million of it. But, clouding the picture, Republicans have given A123 money, too. George W. Bush awarded the company $6 million. And Romney’s home state of Massachusetts poneyed up a $5 million loan to the local company. Romney wasn’t personally involved in that deal, but as the Boston Globe points out, “[A] few weeks after taking office in 2003, Romney announced $9 million in grants for alternative energy companies, including Lowell solar cell maker Konarka Technologies Inc., which went bankrupt earlier this year.” Shades of Solyndra!
In total, Obama’s Department of Energy (DOE) made $2 billion in battery-related grants to 29 companies in 20 states, and most of them are doing well. Romney adds up Obama’s renewable energy awards as $90 billion. In the first debate he pointed to Obama’s next-generation energy loans and said that “about half of those companies have gone out of business,” which is quite an exaggeration. According to Annenberg’s FactCheck.org, only three of the 26 companies receiving loan guarantees in the program cited by Romney have filed for bankruptcy. The $90 billion includes a lot of things not related to solar and wind, including transit and grid-related investments—only $21 billion went for renewables.
Energy Department Worried
The DOE is quite concerned about A123 becoming a political football and sent me an email detailing that the company had received bipartisan kudos, including letters of support from Republicans, and adding that the firm’s nanotech-enhanced batteries won’t go out of production. Johnson Controls, the
DOE said, “is providing the funding needed to continue operations. In other words, the factories are going to keep producing batteries.”
One of A123’s customers, Smith Electric Vehicles, told me yesterday that it considers the switch to JCI a net positive.
In Tuesday’s debate, Obama took the offensive on energy, after sitting back and taking it on the chin in the first one. “We’ve got to control our own energy,” he said. “Now, not only oil and natural gas, which we've been investing in; but also, we’ve got to make sure we’re building the energy source of the future, not just thinking about next year, but 10 years from now, 20 years from now. That’s why we’ve invested in solar and wind and biofuels, energy-efficient cars….”
Romney didn’t jump on that, though he certainly could have. Instead, he hit hard on drilling for oil and gas, and digging coal in an effort to achieve “North America energy independence within eight years.” That rallying cry works great in politics, but it’s notoriously hard to achieve. Despite drilling most of our available reserves, we still import more than eight million barrels of oil a day and, like it our not, our top five trading partners still include both Saudi Arabia and Venezuela.
Given that the U.S. has only three percent of the world’s oil reserves, it would seem that our best hope for achieving gasoline dependence would be reducing demand for the stuff, but conservation doesn’t figure into Romney’s energy plan.
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