Obama-backed car battery company files for bankruptcy protection
By Carol D. Leonnig,
Ener1, an electric car battery company that the Obama administration awarded a $118 million stimulus grant to expand its operations, filed for Chapter 11 bankruptcy protection Thursday after being unable to repay pressing debts.
The news comes one year after Vice President Biden visited the company’s new battery plant in Indiana to highlight its progress with federal funds.
Ener1 is the third company to seek bankruptcy protection among those the Energy Department backed as part of the president’s signature program to invest in clean energy. Solyndra, a California solar-panel maker, and Beacon Power, a Massachusetts energy-storage firm, entered bankruptcy court proceedings in the fall, after having received taxpayer-guaranteed loans of $535 million and $43 million, respectively.
One of Ener1’s key struggles has been its reliance on one financially troubled customer, Think. The Norwegian carmaker filed for bankruptcy protection in June 2010.
In his State of the Union address Tuesday, President Obama foreshadowed the bad news by saying that he remained proud of his administration’s $80 billion commitment to clean-energy projects and companies, despite periodic failures.
“Some technologies don’t pan out; some companies fail,” Obama said. “But I will not walk away from the promise of clean energy.”
House Energy and Commerce subcommittee Chairman Cliff Stearns (R-Fla.), who has led the congressional investigation into Solyndra’s loan, called Ener1 part of the “growing list of failed companies that went belly up” with taxpayer money.
“Sadly, the Department of Energy’s jobs record seems to grow worse by the day . . . and it is American taxpayers who are paying the price,” he said.
Ener1’s application for stimulus money had bipartisan support among Indiana lawmakers. The company received $10.5 million in grants and contracts under the George W. Bush administration.
An Energy Department spokeswoman said that the $55 million provided to the company so far continues to support a “cutting-edge battery-manufacturing plant” and that the company does “not expect to reduce employment at the site.”
“While it’s unfortunate that Ener1, the parent company, has entered a restructuring process, the new infusion of $80 million in private capital demonstrates that the technology has merit,” said spokeswoman Jen Stutsman.
The White House once forecast that the Ener1 grant would help the company hire 1,400 workers by 2013. The company recently reported a workforce of 350.
Biden visited Ener1 the day after Obama’s 2011 State of the Union promise that his administration would help put 1 million electric vehicles on the nation’s roads by 2015.
The Ener1 grant, among $2.4 billion in federal awards to spur the electric car industry, was announced by Obama in August 2009 in Elkhart, Ind. In a September 2010 report, the White House featured subsidiary EnerDel as one of the “100 Recovery Act Projects that are Changing America.”
News researcher Lucy Shackelford contributed to this report.
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