Don't Believe Fox's Hype: Ener1 Enjoys Bipartisan Support And Is Not "Another Solyndra"January 31, 2012 1:43 PM EST ››› LESLIE ROSENBERG & CHELSEA RUDMAN
Fox Hypes Ener1 Bankruptcy Filings As "Another Solyndra" For Obama
Kilmeade: "This Sounds Like Solyndra"; Varney: "It's A Major Embarrassment For The President's Green Energy Policy." On the January 27 edition of Fox News' Fox & Friends, the co-hosts discussed Ener1's bankruptcy with guest and Fox Business host Stuart Varney. Co-host Brian Kilmeade said to Varney, "This sounds like Solyndra," and Varney replied, "It's another major embarrassment for the president's green energy policy." From the broadcast:
KILMEADE: Ener1 was given millions in stimulus dollars -- now it's bankrupt. The company's CEO citing insufficient customer demand. Stuart Varney is here. Stuart, this sounds like Solyndra.
VARNEY: It's another major embarrassment for the president's green energy policy. Solyndra, Beacon Power, and now Ener1. And by the way, Vice President Biden, in that same speech, went on later to refer to it as "Enron 1." ... So an embarrassment for President Obama's green energy policy, another couple of gaffes from Vice President Biden. The place is bankrupt.
VARNEY: Well, look, Ener1 is a child of the stimulus program. It got $118 million in grants, not loans, grants, to go forward. It is now bankrupt. It was supposed to employ 1,400 people by 2013. It doesn't. It employs 350.
VARNEY: It's another example of the government picking winners with our money. Unfortunately, they're losers, and we lose our money. [Fox News, Fox & Friends, 1/27/12]
MacCallum Calls Ener1 "Another Solyndra." On the January 27 edition of America's Newsroom, co-host Martha MacCallum introduced a segment on Ener1 by saying, "So it looks like we may have another Solyndra on our hands." She then discussed the company's bankruptcy with Varney. From the show:
MacCALLUM: So it looks like we may have another Solyndra on our hands. A third American energy company filing for bankruptcy after getting federally-backed funds from the Energy Department through the White House. Now, this time it is called Ener1, the parent company of an electric car battery maker. Seems that electric car battery sales have not been so hot. They received a $118 million grant back in 2009. Just last year, Vice President Biden praised the company when he was there touring their facility.
VARNEY: Well, obviously, this was an embarrassment for Vice President Biden. Not just [calling the company "Enron 1"] but promoting a company which got government money which went bankrupt within a year. It's also a very big disappointment for President Obama's green energy policy. As you said there, Martha, Ener1 makes batteries for plug-in cars. Very little demand for those batteries. The company is now bankrupt. It got a $118 million grant, not a loan -- it got a grant of $118 million. Spent about $55 million of it, and now it is in Chapter 11. It's not going away completely. It'll stay in business, protected from its creditors. This thing is not going to expand, and a lot of money, taxpayer money, is gone.
MacCALLUM: That's an unfortunate growing list of those energy companies. [Fox News, America's Newsroom, 1/27/12]
Fox's Kelly: Ener1 Bankruptcy Is Part Of "The High-Profile Failure Of A Couple Of [Green Technology] Firms, One Of Which ... Is Called Solyndra." On the January 27 edition of Fox News' America Live, host Megyn Kelly led a segment about Ener1's bankruptcy by saying, "This is the latest controversy over federal efforts to fund green technology companies, and the high-profile failure of a couple of these firms, one of which, of course you've heard of, is called Solyndra." From the broadcast:
KELLY: Well, the White House is taking questions today about an electric car battery company that just filed for bankruptcy after it got more than a hundred million dollars of taxpayer money. This is the latest controversy over federal efforts to fund green technology companies, and the high-profile failure of a couple of these firms, one of which, of course you've heard of, called Solyndra. Trace Gallagher is here with more on the latest company. Trace?
TRACE GALLAGHER (Fox News correspondent): Megyn, this is called Ener1, and as you said, this a company that makes electric batteries for electric cars. The Department of Energy gave Ener1 a $118 million grant. And depending on how this Chapter 11 bankruptcy restructuring goes, taxpayers could get some of that money back, could get it all back, then again they may lose that money. Critics are saying this kind of points to whether or not the Obama administration is doing its homework when it comes to investing in these types of companies. At the State of the Union address last year, the president pointed out this country [sic] as exactly the type that we should be investing in. One day after that speech, almost exactly one year ago today, the vice president visited the Ener1 plant in Greenfield, Indiana. The vice president was there, again, touting Ener1. [Fox News, America Live, 1/27/12]
Bolling: Ener1 Is "The Latest Green Mistake By The Obama Administration" And "Is Being Called Solyndra Two Or Is It Solyndra Three"? On the January 27 broadcast of Fox News' The Five, co-host Eric Bolling began the show by airing a clip of Obama admitting in an ABC interview that he makes mistakes, then went on to attack Obama for the bankruptcy of Ener1:
BOLLING: The top story tonight: the mistake maker-in-chief, President Obama and I can finally agree on something. Take a listen.
[begin video clip]
DIANE SAWYER (host, ABC's World News): You don't second guess yourself?
OBAMA: I second guess myself constantly. Look, I make a mistake, you know, every hour, every day. You know, there are always things that you're learning on the job, and I have no doubt that I'm a better president now than the day I took office, just because, you get more experience.
[end video clip]
BOLLING: I wonder if this is what the president was talking about.
BOLLING: That was VP Biden at Ener1. One year ago, the latest green mistake by the Obama administration, this one is being called Solyndra two or is it Solyndra three, whatever. The problem is when Obama makes a mistake, it costs taxpayers billions. [Fox News, The Five, 1/27/12, via Nexis]
But Experts Say Ener1 Is "No Solyndra" ...
Battery Industry Expert: "Ener1 Is No Solyndra." In a January 28 post on the blog The Energy Collective, James Greenberger, executive director of a trade association for advanced batteries, wrote that "the near future" "of Ener1 ... looks far different than that of Solyndra following its bankruptcy" and concluded, "This is no failure." From Greenberger's post:
This past Thursday the bad news coming out of Ener1 seemed to culminate in the filing of a Chapter 11 bankruptcy petition in the United States Bankruptcy Court in the Southern District of New York.
What was announced on Thursday was, however, not the worst (unless you happened to be a common stockholder of Ener1) and may even be grounds for some optimism. The filing on Thursday was a "prepack", indicating that the major creditors of Ener1 have gotten together and agreed on a plan for Ener1 going forward. Those creditors, including Liberty Harbor Special Investments of New York, Itochu Corp. of Tokyo and Goldman Sach's Palmetto State Credit Union of Florida, will exchange their debt for all of the stock of Ener1. Trade creditors and employees will be paid in full. Operations at EnerDel in Indianapolis will continue. And most important, and most intriguingly, $81 million of new money will be invested in Ener1, according to the company's press release.
The future, or at least the near future, of Ener1, therefore, looks far different than that of Solyndra following its bankruptcy. Operations at EnerDel will continue. The technology and know-how that the $110 million DOE stimulus grants funded appears to remain intact. The market has not rejected that technology.
By all accounts [Ener1's] technology and knowledge base appears secure and about to be doubled-down upon by $81 million of new investment. This is no failure. [The Energy Collective, 1/28/12, emphasis added]
CNNMoney: "Unlike Bankrupt Solyndra ... Ener1 Promised Its Business Will Proceed As Usual." A January 26 CNNMoney article stated that "[u]nlike bankrupt Solynda ... Ener1 promised its business will proceed as usual." It went on to note, "The company said the 'voluntarily initiated' bankruptcy filing won't impact any of its subsidiaries, including EnerDel," the division that received a government grant. From the article:
Electric car battery maker Ener1 filed for bankruptcy Thursday, three years after receiving a $118.5 million grant from the U.S. government.
Ener1 (HEVV), which makes a variety of energy storage devices under different subsidiaries, is the parent company of EnerDel, the car battery division that received the government grant to help build a manufacturing plant in Indianapolis.
Unlike bankrupt Solyndra, the advanced solar panel maker that became a lightning rod for critics of Obama's stimulus spending when it closed its factory and liquidated, Ener1 promised its business will proceed as usual.
The company said the "voluntarily initiated" bankruptcy filing won't impact any of its subsidiaries, including EnerDel.
"The restructuring will not adversely impact their employees, customers and suppliers," the company said in a press release, noting there will be no layoffs as a result of the action.
The company blamed the bankruptcy on a slower than expected demand for electric vehicles.
Analysts have also said any electric car battery maker faces stiff competition from Asian firms, which are largely considered to be well ahead of the curve due to their long experience making batteries for electronics. Ener1 was thought to offer one of the best chances for an American company to compete in this field.
The company said that's still the case, and that the restructuring will allow it to reduce its debt and free up $81 million for capital spending. [CNNMoney.com, 1/26/12]
Reuters: Ener1 "Expects To Emerge From Chapter 11 Within 45 Days ... [Ener1 Says] No Jobs [Will] Be Lost Because Of The Filing." From a January 26 Reuters article:
Ener1 has $73.9 million of assets and $90.5 million of debts, according to its bankruptcy petition.
It filed a "prepackaged" reorganization plan that it said has support from enough creditors, and expects to emerge from Chapter 11 within 45 days.
It said the plan would slash long-term debt, provide up to $81 million of new equity financing, and allow it to honor its commitments, which it said include the provision of backup storage systems for the 2014 Winter Olympics.
Unsecured creditors would be paid in full, but holders of its 186.9 million shares would receive nothing, Ener1 said. No jobs would be lost because of the filing, it added.
Jen Stutsman, an Energy Department spokeswoman, called the bankruptcy "unfortunate," but said the proposed equity infusion "demonstrates that the technology has merit." [Reuters, 1/26/12]
Grist's David Roberts: "Substantively, Ener1's Restructuring Means Very Little." From a January 27 post on Grist:
You'll recall that ever since the Solyndra faux scandal, the right has been on the hunt for a "new Solyndra," another company that received help from the Dept. of Energy and subsequently went under. For a while the New Solyndra was going to be Fisker Automotive, for a while SunPower, but those attempts sank like a stone.
The latest candidate is lithium battery company Ener1, Inc., which just declared Chapter 11 bankruptcy as part of a long-term debt restructuring deal. Ener1′s subsidiary EnerDel received a $118.5 million grant as part of the stimulus bill. Rep. Cliff Stearns, the GOP's Solyndra point man, has a characteristically melodramatic statement out on it.
Substantively, Ener1′s restructuring means very little. As DOE spokesperson Damien LaVera pointed out, "This is one of 30 new advanced battery and electric vehicle component plants that the administration has invested in across the country." What matters is the success of the broad portfolio, and more important, the success of the industries and innovations the support is meant to stimulate. Of course there will be failures and setbacks along the way. In fact, Congress itself expected the DOE loan guarantee program to have a much higher failure rate than it has actually had; it set aside $2.4 billion in anticipation. That's the nature of supporting cutting-edge companies. [Grist, 1/27/12]
Green Car Reports: "Ener1 Files For Bankruptcy, But Isn't Dead." A January 30 post on High Gear Media's Green Car Reports site analyzed Ener1's financial history, then concluded that "unlike Solyndra and some other much-publicized green energy firms, Ener1's story doesn't look like it will end just yet." From the post:
But the real story of what happened to Ener1 goes beyond political posturing and back to the firm's connections with Norwegian electric automaker Think, maker of the diminutive two-seat Think City.
When Ener1 became the official supplier of battery packs to Think Global, Think had already been bankrupt twice before.
Shortly after Ener1 became official battery supplier for the Think, it was hit with the news that Think was in dire financial crisis. To help out and secure its own future, Ener1 helped provide the majority of funds in a $5.69 million bridge loan to Think.
For better or worse, Ener1 became an investor in a firm whose business it relied on to survive, a symbiotic relationship which would eventually prove catastrophic.
By the time Think entered its third bankruptcy in June last year, Ener1 owned 48 percent of the firm, and was forced to write off over $73 million in losses and accounts receivable against Think.
At that point, Ener1's house of cards started to fall down, with its shares entering free-fall as the stock market reacted to its Think-inherited debt.
But unlike Solyndra and some other much-publicized green energy firms, Ener1's story doesn't look like it will end just yet.
According to TheEnergyCollective, Ener1's Chapter 11 paperwork included details of how major creditors of Ener1 are already planning to write-off Ener1's debts against them in exchange for Ener1 shares.
At that point, trade creditors and employees will be paid, Ener1's EnerDel facility in Indianapolis will continue to operate, and an additional $81 million of private investment will be given to the company.
Ener1 may have inherited Think's debt, but it appears it has also inherited its abilities to rise again from the ashes of insolvency. [Green Car Reports, 1/30/12]
... And Fox Erased Ener1's GOP Support, Including That Of Gov. Mitch Daniels ...
Ener1 Press Release Notes "Bipartisan Cooperation By Senators Lugar and Bayh, and Gov. Daniels." In its August 2010 press release announcing the $118 million grant from the Energy Department, Ener1 credited GOP Gov. Mitch Daniels of Indiana for helping to secure its funding, along with then-Sen. Evan Bayh (D-IN) and Sen. Dick Lugar (R-IN):
Economic growth is not a Democratic or Republican issue. This effort has been a model of bi-partisan cooperation by Senators Richard Lugar and Evan Bayh, and by Governor Mitch Daniels," [EnerDel CEO Ulrik] Grape said. "Their support has been tremendously important." [Ener1 Press Release, 8/5/10]
USA Today: Former Ener1 CEO Said That "No Single Individual Has Been More Important To Us Than Gov. Mitch Daniels." A January 27 USA Today article, titled, "Obama critic backed bankrupt clean energy firm," noted that Daniels had "championed" Ener1 and quoted a former Ener1 CEO as saying, "No single individual has been more important to us than Gov. Mitch Daniels." From the article:
Daniels, a former budget director in the George W. Bush administration, has backed Ener1 for several years. Ener1 has also received support from Sens. Richard Lugar, a Republican, and former Sen. Evan Bayh, a Democrat, who wrote a joint letter to Energy Sec. Stephen Chu in June 2009 backing the DOE grant.
Daniels, however, has stood out among lawmakers in his backing of the company.
"No single individual has been more important to us than Gov. Mitch Daniels, our advocate in chief in Washington and on missions abroad," said former Ener1 CEO Charles Gassenheimer at a 2010 event to announce the joint venture with the Chinese auto parts company.
Jake Oakman, a spokesman for Daniels, said on Friday that the governor had no comment about the bankruptcy. [USA Today, 1/27/12]
Grist: "Latest Clean Energy Faux Scandal Engulfs GOP Spokesman Mitch Daniels" And Other GOP IN Politicians. The January 27 Grist post described the support for Ener1 and its EnerDel division from several GOP Indiana politicians, including Daniels, Lugar, and Rep. Dan Burton. From the post:
In a shocking turn of events, Republicans have turned on the very man they chose to speak for them this week in response to Obama's State of the Union address -- Indiana Gov. Mitch Daniels. He is taking a drubbing in the conservosphere, but what's most peculiar about the scandal that threatens to engulf him is that Republicans don't seem aware that they're attacking him.
Sen. Richard Lugar (R-Ind.) was a key advocate for EnerDel. He visited its factory in 2008 and said, "Fostering research for advanced batteries should receive high priority as part of our nation's effort to develop a diversity of energy sources." Here he is acknowledging the risks but saying that companies like EnerDel represent the future:
Lugar and Sen. Evan Bayh (D-Ind.) sent a letter to energy secretary Steven Chu in 2009 that cites EnerDel's application for a loan under the Energy Independence and Security Act of 2007, as well as its more recent application for funding under the stimulus bill, and says, "We add our individual voices to urge its favorable consideration." Egg on their face!
Of course everyone knows Lugar's a big RINO. What's perhaps more surprising is the heretofore undetected socialism hiding in the heart of hyper-conservative Rep. Dan Burton (R-Ind.), who in 2007 called EnerDel "the wave of the future ... cutting edge technology [that] will help relieve our dependency on foreign oil." Here he is bragging on the company's DOE partnership. Whoopsy.
Hm ... anyone else? Oh yes, here's one. In 2008, the "Indiana Economic Development Corporation offered EnerDel up to $7.125 million in performance-based tax credits and up to $58,000 in training grants." Those tax credits were unveiled by none other than Indiana Gov. Mitch Daniels ...
Fox News is not going to be happy about this. [Grist, 1/27/12]
HuffPo: Daniels' Administration Granted Ener1 Over $7 Million In Tax Credits And "Praised It Effusively." In a January 26 article, The Huffington Post reported that Ener1 received "extensive aid" from Daniels, noting that his administration "granted the firm ... more than $7 million in tax credits." From the article:
Ener1 got a $118 million grant from the federal government in 2009. But it also got extensive aid from the Indiana Republican governor who delivered the GOP response to Obama's Tuesday address -- Gov. Mitch Daniels.
Daniels' administration granted the firm, which makes its batteries in Indiana, more than $7 million in tax credits, and praised it effusively.
"Eight hundred fifty jobs of any kind is great news," Daniels said at the time, in August 2008. "When those jobs are in a technology of tomorrow, like electric cars, it offers the prospect of even bigger news to follow. Indiana has what it takes to lead this automotive revolution and today is step one." [Huffington Post, 1/26/12]
Bloomberg Businessweek: "Ener1's Grant Application Received Bipartisan Support From Indiana Lawmakers" And Ener1 Received Millions In Grants "Under The George W. Bush Administration." A January 26 Bloomberg Businessweek article noted that the Ener1 grants received "bipartisan support from Indiana lawmakers" and went on to state that "the company got a $6.5 million Energy Department advanced-battery grant and a $4 million Defense Department research and development contract under the George W. Bush administration." [Bloomberg Businessweek, 1/26/12]
... Whom Fox Figures Fawned Over After His SOTU Response
Chris Wallace On Daniels: "A Star Is Born." During Fox Broadcasting's January 24 State of the Union coverage, Fox News Sunday host Chris Wallace said that Daniels' response to President Obama's address was a "strong speech" and that "some of these responses from Republicans and Democrats fall flat; some of them, like [Daniels'], you'd say a star is born." Wallace concluded: "I think some people are going to be looking at that speech and saying, 'Why isn't he running for president?' " [Fox Broadcasting Co.'s State of the Union coverage, 1/24/12, via Media Matters]
For more examples of Fox figures fawning over Daniels, SEE HERE.