Another Green 'Stimulied' Company Goes Bankrupt

[Kathianne]

But not before giving out bonuses to execs:

http://www.michigancapitolconfidential.com/17686


A123 Files for Bankruptcy (http://www.michigancapitolconfidential.com/17686) Yet another failure of central planning
By Jarrett Skorup (http://www.michigancapitolconfidential.com/bio.aspx?ID=581) | Oct. 16, 2012

Electric car battery-maker A123 Systems has filed for bankruptcy (http://www.bloomberg.com/news/2012-10-16/electric-car-battery-maker-a123-systems-files-bankruptcy.html?cmpid=yhoo), according to Bloomberg News.


The company was promoted heavily (http://www.michigancapitolconfidential.com/16737) by President Barack Obama and Michigan politicians and received hundreds of millions of dollars through federal “stimulus” and Michigan Economic Development Corp. programs. Earlier this year, Michigan Capitol Confidential uncovered a video (http://www.michigancapitolconfidential.com/17636) of these politicians promising “hundreds” and “thousands” of jobs – the video was eventually taken down by the MEDC but saved by CapCon.


Despite known financial trouble, just a few months ago A123 awarded sweetened severance packages (http://www.michigancapitolconfidential.com/16965) to its top executives. From CapCon:



Vice President and General Manager of Energy Solutions Group Robert Johnson, for example, would see his severance increase an extra $200,000 from the agreement, boosting it from $400,000 to $600,000. Johnson’s base salary is $400,000 (http://sec.gov/Archives/edgar/data/1167178/000110465912009687/a12-5013_18k.htm) this year, up 21 percent from his 2011 base salary of $331,250. That raise is consistent with a pattern of large pay increases (http://www.michigancapitolconfidential.com/16500) top executives at A123 Systems have received.

In sum: The president of the United States, Michigan’s former governor, the state’s two U.S. senators and the U.S. Secretary of Energy promised thousands of jobs from a company that in a mere two years went bankrupt. Despite a bankruptcy or buyout predicted (http://nlpc.org/stories/2012/05/17/looks-subsidized-a123-execs-want-cash) by outside observers, the company continued to reward its top executives while laying off most of its workforce.


Taxpayers should not be surprised: This is only the latest example where political calculations trumped market ones. Only government bureaucrats spending other people’s money would think this was a good investment.
http://www.michigancapitolconfidential.com/media/images/common/ToolsPrint.gif (http://www.michigancapitolconfidential.com/article.aspx?ID=17686&print=yes)

[Tyr-Ziu Saxnot]

But not before giving out bonuses to execs:

http://www.michigancapitolconfidential.com/17686

Obama and crew paying back supporters with our tax money. Typical political cronyism. Typical obama/dem behaviour. An as usual nothing will ever be done about it!-Tyr

[aboutime]

Obama and crew paying back supporters with our tax money. Typical political cronyism. Typical obama/dem behaviour. An as usual nothing will ever be done about it!-Tyr


Agreed Tyr. Nothing will be done about it. But we can do what needs to be done to prevent more of it. On November 6th, and during the following CONGRESSIONAL election cycles.

By the way. If you happened to hear about Bill Clinton, telling everyone that Obama looked like he wanted to cry.

Mark my words. Today, and on November 7th. Will be the start of the next Hillary Clinton campaign season for 2016.

All of this Obama stupidity, and lying seems to have all been part of a larger plan, directed, and produced by Bubba Clinton as he has been pretending to Endorse Obama....while holding CROSSED FINGERS behind his back.

I know it sounds CRAZY. But everyone should now remember. The CLINTON'S are not giving up anything. And Obama really was THAT BUMP IN THE ROAD.

[fj1200]

But not before giving out bonuses to execs:

http://www.michigancapitolconfidential.com/17686

It's not uncommon for firms to offer executives retention plans so that they stay while go through bankruptcy/reorganization. It keeps them from jumping ship at the first opportunity.

[aboutime]

It's not uncommon for firms to offer executives retention plans so that they stay while go through bankruptcy/reorganization. It keeps them from jumping ship at the first opportunity.



It all boils down to nothing more than Common Sense. Obama helped those on Wall Street, who were about to lose their positions, to get STIMULUS funds. But not one Obama follower pressed Mister Obama for such things. Even as he played both sides against the middle in calling Wall Street Execs Dangerous, Dirty, Money Hungry animals...up until he remembered....they donated Big Bucks to him.

[Robert A Whit]

It's not uncommon for firms to offer executives retention plans so that they stay while go through bankruptcy/reorganization. It keeps them from jumping ship at the first opportunity.

Compare this to driving a race car. If you know the car is going to crash in a wreck, is that when you offer the driver a huge increase in wages?

Those managers drove the company into the ditch. To vote them to receive more cash is to reward failure.

[aboutime]

It all boils down to nothing more than Common Sense. Obama helped those on Wall Street, who were about to lose their positions, to get STIMULUS funds. But not one Obama follower pressed Mister Obama for such things. Even as he played both sides against the middle in calling Wall Street Execs Dangerous, Dirty, Money Hungry animals...up until he remembered....they donated Big Bucks to him.

A friend of mine sent this to me today. Take a look, please....

http://www.youtube.com/watch?v=n5NbvAmk8KA&feature=colike

[fj1200]

It all boils down to nothing more than Common Sense. Obama helped those on Wall Street, who were about to lose their positions, to get STIMULUS funds. But not one Obama follower pressed Mister Obama for such things. Even as he played both sides against the middle in calling Wall Street Execs Dangerous, Dirty, Money Hungry animals...up until he remembered....they donated Big Bucks to him.

Well the OP example is what is common practice in bankruptcy. Ensuring those with experience in running the firm stay there until it winds down. Failure of BO and MI politicians and their policies are different IMO.


Compare this to driving a race car. If you know the car is going to crash in a wreck, is that when you offer the driver a huge increase in wages?

Those managers drove the company into the ditch. To vote them to receive more cash is to reward failure.

While that may be a pertinent example in some cases, in many cases bankruptcy is caused by situations outside the control of management. If the plan was approved post-bankruptcy then it was approved by the court and possibly the creditors in what they hope maximizes the value that may come from the dissolution/reorganization.

The failure here is government granting loans and guarantees and not leaving it up to the private sector to properly allocate capital resources. But you could be exactly right if this:

Despite a bankruptcy or buyout predicted (http://nlpc.org/stories/2012/05/17/looks-subsidized-a123-execs-want-cash) by outside observers, the company continued to reward its top executives while laying off most of its workforce.
is true. Hopefully the bankruptcy court has some leeway in reigning these types of things in.