published Monday, January 2nd, 2012

The 'green car' money pit

What is America getting in return for the $80 billion that the Obama administration has showered on "green energy" projects that supposedly will reduce "global warming"?

Well, in lots of instances we know exactly what we're getting -- and we'd just as soon have that $80 billion back. The most notable failure of a heavily subsidized green energy effort in recent months was Solyndra, a California-based solar panel manufacturer. Taxpayers are on the hook for the half-billion-dollar federal loan Solyndra got -- before it declared bankruptcy.

And The Washington Post recently rounded up some facts about the $5 billion that the federal government has used to prop up the production and sale of electric cars. It's not a pretty picture.

"[A]nalysts say the risk is rising that taxpayers in many cases will not see a return on their money soon, if ever," the newspaper reported. "Instead, they warn that some federally subsidized companies could be forced to shut down in coming months. ... Obama predicted in 2008 that green cars would create thousands of new U.S. jobs as demand soared. But in recent months, production lines and sales expectations have been dramatically scaled back."

Here are some of the unhappy tidings:

• The Obama administration wants to put 1 million electric vehicles on the road by 2015. But actual sales of the top seven electric vehicle brands this year are about 17,000 -- only one-fifth of 1 percent of total domestic car sales for 2011!

• Johnson Controls, which makes high-tech car batteries, got a nearly $300 million federal "stimulus" grant. But because of low demand, the company "opted to build one factory instead of two ... and that one is now operating at half capacity," the Post reported. An official at the company admitted, "We'll have to wait a long time to see if [federal funding] was a good investment or not."

• Massively subsidized A123 Systems, which makes car batteries in Michigan, has fewer than 700 employees after recent layoffs. Obama had predicted the company would create 3,000 jobs with government funding, and others predicted A123 Systems would have 5,000 jobs. But even before the layoffs, it had at most 1,000 employees.

• EnerDel, a battery manufacturer that got a nearly $120 million grant from Washington, is hurting because its main customer, an electric-car maker named Think, has gone belly-up.

• Aptera, a California company that builds electric cars, is shutting down, because it says a $150 million lifeline from the federal government came too late. But why should it ever have been taxpayers' responsibility to ensure the company's success with federal dollars?

• Sales of General Motors' subsidized Chevy Volt, an electric car, are expected to fall far below this year's goal of 10,000.

It is not particularly surprising that investors at a number of the subsidized car companies are also big campaign donors to President Obama.

But it is surprising that in spite of the failure of unconstitutional subsidies to create strong markets for electric cars, some in Washington insist on continuing the subsidies.

Wouldn't it be wise in 2012 to elect members of Congress and a president who believe that wasteful subsidies should be cut -- not continued?

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conservative said...

The key words in this article are "failure" and " wasteful" and "subsidies". They are all interrelated and should come to mind whenever Lieberals and Socialists speak, write and act.

January 2, 2012 at 9:48 a.m.

China is putting 5 to 10 times as much money into electric car development than the US.

Do you want them to get ahead with the technology?

I would get into the discussion about how conservatives are guilty of their own waste, fraud and subsidies, but then again, if you were honest with yourself, you'd know about them already.

January 2, 2012 at 10:55 a.m.
BigRidgePatriot said...

happywithnewbulbs said... "I would get into the discussion about how conservatives are guilty of their own waste"

I think you are confusing the national Republican machine with (fiscal) conservatives. There has been a severe shortage of conservatives in Washington for decades now. Ron Paul is the ONLY truly fiscally conservative candidate out there.

January 2, 2012 at 12:42 p.m.

Hence the guilt. That and simple human imperfection. Mistakes, happen, things go wrong. Nobody is immune. Even an investment in cffins is not a safe bet.

Do me a favor though, and don't break off a part of a sentence like that. Blockquote

January 2, 2012 at 1:09 p.m.
rick1 said...

happywithnewbulbs said "China is putting 5 to 10 times as much money into electric car development than the US."

"Do you want them to get ahead with the technology?"

These MIT professors Thomas H. Lee, Ben Ball, Jr., and Richard Tabors said it best with regard to government investment in energy, "the experience of the 1970s and 1980s taught us that if a technology is commercially viable, then government support is not needed, and if a technology is not commercially viable, no amount of government support will make it so."

Also Obama gave a $528 million susidy to Fisker to produce an electric car, which will be produced in Finland. So our tax dollars are creating jobs over seas. Weren't the liberals blaming Bush when corporations outsourced jobs to other countries. Now Obama is giving tax payer money to companies in other countries to create green jobs in their country.

January 2, 2012 at 1:10 p.m.

Uh, no, you are mistaken on the facts of the Fisker cas. That company is actually refurbishing a US facility, the Finnish production is of their first generation car, the second generation car for which they got the loan will be made in the US. There is also design work that was done in the US, and many of the parts in their first generation car are made in the US. This is really just making something out of nothing.

And I'm sure some other academics have come to a completely opposite conclusion to the ones you named. But I'll leave the exercise of finding a soundbite to somebody else.

January 2, 2012 at 1:36 p.m.
rick1 said...

happywithnewbulbs: It’s been two years since Fisker bought that plant. Fisker might create manufacturing jobs in this country but if sales don’t support the business for the first model, they will not be buildin the second model and those U.S. jobs will never occur.

After what happened with Solyandra I'm sure more academics and taxpayers agree with Lee, Ball and Tabors. Govt. needs to let the free market work on its own, if there is a demand for the product people will buy it. Take a look at the Chevy Volt, even with all of the government subsidies, and tax incentives people still are not buying this vehicle.

January 2, 2012 at 2:05 p.m.

It does take some time to get a manufacturing plant up to production, what's the problem? You expect them to wave a magic wand and crank out vehicles in a heartbeat? You want them to sit around and do nothing, not even produce some models to get things in order? Your demands seem excessive to me.

And hypocritical, you cannot object to government spending being used for business at all while simultaneously criticizing a company for making the best business choices available to it. Which are in full compliance with their contract for the loan, so stop making up false arguments against companies, when your objections are invalid since the reality is, what you presume is happening is not, and the loans already covered the due diligence aspect of fostering employment in the US.

Me? I disagree with you about letting the free market work on its own. That only works if all the actors have equal power, which is explicitly not the case. And while the government could focus on correcting problems afterwards, I prefer a forward looking approach be part of it. It is why I have a government, to think forward, and in terms that are reflective of my concerns as a citizen, not in terms of who holds the most stock.

And sometimes that may not come out perfectly, sometimes it may falter, but what won't? It's not like every car model ever made was perfect. The Volt may not be selling as well as hoped, but is it a bad car? Or the Leaf, Prius, the i? Even the worries about a battery fire make me laugh. If you get in a car accident, which would you rather have, a fire at the site, or a fire that would give you time to take the vehicle to a shop, get the battery tested and replaced?

BTW, if the government weren't subsidizing fossil fuels and the road system, you can bet that automobiles would not be attractive at all. Yet you only complain about the pittance for electric vehicle development while ignoring the billions spent elsewhere. Stop being so myopic, and at least live up to your claimed principles.

I still leave finding some soundbite from some other academics to somebody else, but you know the thing about Solyndra? The only people getting upset over it are the ones who had some political hay to get out of it. Much like the Tucker business. They ignore serious malfeasance just to drag somebody else down who isn't in line with their agenda. Much like how Reagan's administration killed everything they could which didn't go along with what they wanted, but poured billions into their own pet projects.

You might genuinely be willing to go with what you claim to represent. I doubt it, but you might. I can give no such credit that the politicians raising that banner are true believers.

January 3, 2012 at 1:42 a.m.
collin said...

Well as part of the greener campaign the government has done lots of things and one of them is the fuel efficiency campaign for vehicles. The engagement of the electric vehicles are truly a great help simply because they used power instead of fuel. On the other hand, the automotive industry is now coming with advanced stuff such as replacement [URL=http://www.partstrain.com/ShopByDepartment/Alternator]alternator[/URL], suspension and engine in connivance with the campaign.

April 16, 2012 at 7:16 p.m.
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