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Wednesday, October 17, 2012

Op/Ed - The A123 Systems Story - A BIPARTISAN Case of Bailing Out Wall Street before Main Street

Image representing A123 Systems as depicted in...
Image via CrunchBase

A man that desired to be Governor of the Great State of Michigan and lost his election by 18 points to current Gov. Rick Snyder (R), Lansing Mayor Virg Bernero, first coined the phase "Main Street not Wall Street".

Virg Bernero: Main Street, not Wall Street from International Union, UAW on Vimeo.

The statement was empathizing funding allocated to "Bail-Out" companies traded on the New York Stock Exchange, should instead be used to bailout Middle and Lower class Americans.

As time has moved on from Mayor Bernero's candidacy for Michigan Governor, turns his statement made during his 2010 campaign was right on point.

Yet in retrospecting the fall of bankrupt company A123 Systems, this company was not just popped-up by President Barack Obama 2009 stimulus package alone.

A123 Systems Inc.'s newly minted shares jumped 50% in their stock market debut on Thursday as Wall Street placed its bets behind the government-subsidized maker of lithium-ion batteries for the growing electric car market.
A123 Systems' (US:AONE) IPO closed at $20.29 a share, up $6.79 over its offering price of $13.50 a share. The stock first crossed the tape at $17 a share and rose. 
The company priced 28.1 million shares, raising $378 million for its debut on the Nasdaq. The Watertown, Mass.-based firm went public above its already-increased range of $10 to $11.50 a share. 
In another bullish move, the size of the initial public offering was increased by 2.4 million shares from its earlier level of 25.7 million shares. 
Analyst John Fitzgibbon of said A123 drew interest from IPO investors as a way to tap into new technology, while two real estate investment trusts that also went public on Thursday from Apollo Group and Colony Financial mostly drew a cold shoulder.  
"It's an exotic industry," Fitzgibbon said of A123's green technology luster. "It's a momentum sector play...You can expect to see more of these."
Hindsight is 20/20 and let's hope we don't see more of A123 systems Wall Street Government Bailouts turn bust, you think.

This is why giving Government Grants to over-hyped companies instead of Bailing Out American CItizens and particular American HOMEOWNERS from the games played by big business or AMERICAN student loan recipients, is rarely a good thing. 

Despite what you might hear in the media, A123 System Governmental Grant had BIPARTISAN support, not just singletary party agreement from Democrats and President Obama. 

"The U.S. Department of Energy awarded a $249-million grant to A123 in August 2009 with promises of 5,900 jobs, mostly in Michigan. 
The Michigan Economic Development Corp. also awarded A123 more than $125 million in a variety of tax credits, grants and incentives in 2008 and 2009. The U.S. grant and Michigan incentives drew bipartisan support when they originally were approved."  
Democrats responded that during his 2002-06 term as governor of Massachusetts, Romney also provided support to emerging technology firms and some of the investments did not pay off. 
Meanwhile, the Department of Energy pointed out that A123's investment had bipartisan support from Michigan lawmakers, including incumbent Democratic Sen. Debbie Stabenow and her Republican challenger, Pete Hoekstra.  
"Johnson Controls' investment in A123 will help ensure that the U.S. remains competitive in this growing global sector," said former Democratic Michigan Gov. Jennifer Granholm, who promoted battery tax incentives as a way to boost the Michigan economy.
And speaking of that Bipartisan support....

Mr. Secretary, establishing a North American battery center of gravity in Michigan will significantly improve the federal government's ability to more swiftly meet its ambitious vehicle electrification goals, and will pay dividends across the industrial Midwest through development of a strong supply chain. 
As the Department begins its review process, it is clear that our nation needs to 'get it right the first time' in deploying these recovery grant dollars.

Among the other names on that letter: Rep. Pete Hoekstra. It was really only three-odd years ago that "green energy" was a popular environmental wedge issue that both parties wanted a piece of. 
Using the now unheard term during election time of BIPARTISANSHIP, seven Republican Representatives agreed with allocating a$249 MILLION dollar grant now bankrupt A123 Systems, along with nine Democrats. 

In summary, Mr. Secretary, establishing a North American battery center of gravity in Michigan will significantly improve the federal government's ability to more swiftly meet its ambitious vehicle electrification goals, and will pay dividends across the industrial Midwest through development of a strong supply chain.  
The Michigan Delegation Senator Carl Levin - Democrat 
Senator Debbie Stabenow - Democrat 
Congressman John D. Dingell - Democrat 
Congressman John Conyers - Democrat 
Congressman Fred Upton - Republican  
Congressman Dale Kildee - Democrat 
Congressman Sandy Levin - Democrat 
Congressman Vern Ehlers - Republican 
Congressman Pete Hoekstra - Republican  
Congressman Bart Stupak - Democrat 
Congressman David Camp - Republican  
Congresswoman Carolyn Cheeks Kilpatrick - Democrat (No longer in office) 
Congressman Thaddeus McCotter - Republican (Now Resigned)  
Congresswoman Candice Miller - Republican  
Congressman Mike Rogers - Republican  
Congressman Gary Peters - Democrat 
Congressman Mark Schauer - Democrat (No longer in office)
Can we for ONCE BAILOUT the MIDDLE or LOWER CLASS Americans, before these "popped-up" companies similar to A123 Systems, ever? 

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