The 'green car' money pit

The 'green car' money pit

January 2nd, 2012 in Opinion Free Press

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?