One-hundred-and-twenty-five “jobs of the future” disappeared last month.
Despite millions in federal and state subsidies — $375 million to be exact — one of the icons of America’s new Midwest “Green Belt” industry, A123 Systems, sent pink slips to dozens of Michigan employees. Call them the “jobless of the future.” The celebrated battery maker’s struggle also exposes the green industry’s House of Cards. That is, without perpetual subsides for its chief product, electric cars, the whole industry will collapse.
A123′s has suffered as its subsidized client, electric automaker Fisker Automotive, has stumbled. Itself the recipient of $530 million in federal subsides, Fisker has struggled to get its business — $100,000 luxury sedans for the rich — off the ground.
To meet Fisker’s sales goals of 10,000-20,000 units a year, Washington has constructed an industry financed by a web of interlocking subsidies from $7,500 tax breaks for buyers to guarantees of government purchase to free battery chargers.
“I certainly believe there will be consolidation over time,” A123 CEO David Vieau told AnnArbor.com in explaining why jobs are disappearing in an industry that is supposed to be leading America out of the Great Recession. “That’s happened with every new technology I’ve experienced in the last 40 years.”
No it hasn’t.
“Every new technology” like cell phones, and personal computers, and PDAs didn’t get billions in federal stimulus dollars after Washington Masters of the Universe anointed them the Jobs of the Future.
No, these industries developed core customers, and solid business models, and attracted billions in private capital as a result. By contrast, Obama & Co. have decreed an artificial market based on a dream and thrown money at chosen firms like A1243 to service it. Lacking any market perspective, Washington’s venture splurge has created a glut of battery manufacturers chasing too few electrical customers with too many batteries.
“This is important not just because of what you guys are doing at your plant, but all across America, because this is about the birth of an entire new industry in America — an industry that’s going to be central to the next generation of cars,” The One told Vieau at the White House in 2010.
Talk about your messiah complex. How could a guy with a legal degree and a career in social activism — who, as far as business experience goes, hasn’t run so much as a candy store — know what the next generation of cars will look like?
“Investors recently have shown little faith in the company,” reports Ann Arboe.com of the private equity companies with a little more experience in such things. A123 stock debuted at $13.40 a share in its Sept. 29, 2009, IPO. It has since declined a whopping 93 percent, to an all-time low of $2.01 on Nov. 25, 2011. This is where American taxpayer dollars have gone to “stimulate” the American economy.
Obama’s job predictions have been no better than his stock picking. In 2010, he promised that A123 would create 3,000 jobs in Michigan alone. His Michigan ally, another lawyer and then-governor Jennifer Granholm, put the figure at 5,000.
They have been spectacularly wrong. Today, A123′s personnel count has fallen from a high of 1,000 to about 700.
A123′s Vieau is better at selling pols than product. His company has yet to make a dime. But neither have other bankrupt Michigan recipients of green stimulus like Fisher Coachworks and RASCO and Evergreen — not to mention national embarrassments like Solyndra.