Barack Obama came into office promising to change the face of America’s energy future with the use of Cleantech. He told us that we would be on the cutting of new energy technology, dubbed Cleantech by the media.
Then the Obama administration went out and committed $150 billion in loans, grants and tax breaks to the new technology. Many of the company names may not be familiar to most Americans: Abound Energy, Beacon Power, Fisker, V.P.G., Range Fuels, Ener1, A123 and ECOtality.
However, these companies received an ocean of cash from our government in the hope that they could benefit the American people. But instead of a brave new world of clean energy technology the American taxpayers got a bunch of bankruptcies scattered across the energy technology landscape.
We had Solyndra, the text book case on how not to build a company. Solyndra received over half a billion dollars in loans for a product that was undercut by Chinese competition in short order. They were soon in bankruptcy.
Other technology companies like LG Chem built facilities and ramped up production when there was no market for their products. The plant was built with $151 million from the stimulus to make batteries for electric cars that people never bought.
The American taxpayers gave half a billion in loan guarantees to Fisker, an electric car startup who promised to build their plant in Delaware. The plant was never built and Fisker is now bankrupt.
We all know that new technology investments can be risky and problematic. How many times did Thomas Edison fail to make a working light bulb? Edison tried over 10,000 different substances in making the filament of an incandescent lightbulb until he found one material that worked and was economical.
The Obama Cleantech failures are understandable in the light of progress but a different picture has emerged as people have dug deeper into the companies that were involved.
Many of the investors who were involved were Obama campaign contributors. They traded campaign contributions for government subsidies, loans and grants. Solyndra was a prime example. We’ve written about it here, here and here.
They essentially took the money and ran. And if they couldn’t run they got huge tax write-offs for their personal losses. Meanwhile, the government continues to dole out cash in a hope that something positive will come out of the avalanche of cash.
Well, some benefit seems to have come out of the Energy Department’s largesse. With the increasing availability of natural gas, more and more Cleantech companies went bankrupt where they bought up by the opportunistic Chinese at fire sale prices.
One such company is Wanxiang and its opportunistic CEO Pin Ni. They were able to buy six Cleantech companies so far, including A123, an electric car battery startup that lost over 130 million tax dollars.
Wanxiang currently has 27 plants in 13 states and some 6,000 American workers. Pin Ni says every third car made in the U.S. has Wanxiang parts.
So what’s wrong with a Chinese company, or any foreign company, taking advantage of an opportunity that the American taxpayers originally financed and employing thousands of American workers? You decide.