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A Twisted Clean-Tech Tale: How A123 Wound Up In Bankruptcy

timothy posted about a year and a half ago | from the fallacies-on-display dept.

Businesses 164

curtwoodward writes "Advanced battery maker A123 Systems was supposed to be one of the marquee names of the U.S. cleantech manufacturing scene — it won hundreds of millions in federal grants, had operations around the globe, and supplied the luxury Fisker electric car. In 2009, as the economy sputtered, A123 registered the country's biggest IPO. Today, it's in bankruptcy court, with possible buyers submitting bids for its parts and pieces. How'd A123 fall so far, so fast? As losses mounted, its reliance on just two big customers came back to haunt the company — and a series of screwups at a Michigan plant delivered the final blow."

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Michigan (1)

willie3204 (444890) | about a year and a half ago | (#42205297)

This plant is right down the street from me. It will be sad to see it go out with such a whimper. Also didn't JCI buy a portion of their business??

Re:Michigan (4, Informative)

willie3204 (444890) | about a year and a half ago | (#42205321)

Oh perhaps the deal didnt go through just yet See here [detroitnews.com]

Re:Michigan (2)

curtwoodward (2147628) | about a year and a half ago | (#42206535)

Yeah, they're actually in the "auction" part of the bankruptcy today. JCI is the opening bidder - the "stalking horse" as it's colorfully named. Unsure when the other bids etc will be made public, but there is a hearing scheduled in court on Dec. 11.

Ooh ooh ooh! Me Obongo! (-1, Offtopic)

Anonymous Coward | about a year and a half ago | (#42205989)

Obongo's policies fail again. This is the "hope and change" you stupid fuckers voted in AGAIN?!?

Re:Ooh ooh ooh! Me Obongo! (-1)

Anonymous Coward | about a year and a half ago | (#42206649)

Who's more stupid, the fool or the fool who follows Romongoney? See what I did there. Clever bastard I am. With the name. I changed it to make it sound funny to a 6 year old. Romongoney!

Re:Ooh ooh ooh! Me Obongo! (-1)

Anonymous Coward | about a year and a half ago | (#42206701)

I didn't vote for Romney. He was worse than Obongo.

Re:Ooh ooh ooh! Me Obongo! (1)

Ifthir (1446587) | about a year and a half ago | (#42207379)

The difference is, it was during Obama's administration that A123 got 250$ million in federal funding. Gee, what a shock, yet another Michigan company losing nearly $1 billion, all while eating from the trough of taxpayer dollars.

Just another cautionary tale (5, Insightful)

Revotron (1115029) | about a year and a half ago | (#42205339)

Nothing good has ever come from the commander-in-chief tossing government money back to his buddies (and campaign donors) in industry. My statement applies to this president just as much as it does to those before him.

Re:Just another cautionary tale (5, Insightful)

mspohr (589790) | about a year and a half ago | (#42205415)

The government has been tossing taxpayer money to the oil industry, big agriculture, banks and everyone else who could buy themselves a politician or two since the beginning of time.
This particular failure sounds like a combination of bad management plus the fact that developing and scaling new technology is hard.

Re:Just another cautionary tale (3, Informative)

LehiNephi (695428) | about a year and a half ago | (#42205575)

For perspective, the tax breaks given to oil companies amounts to about $2.4 billion/year (in the form tax breaks which are similar to the same tax breaks that every other industry gets for investing in expansion). Loan guarantees like the one A123 got totalled $90 billion in the "stimulus" bill passed in 2009.

Government sticking its thumb on the scales of the economy is always a bad idea--whether it be bailing out banks or perpetual ethanol subsidies + ethanol mandates + import tariffs.

Re:Just another cautionary tale (0)

Anonymous Coward | about a year and a half ago | (#42205687)

Subsidizing corn like its not the most profitable crop in the country is pretty damn dumb, you have me there. But if i told you that you were the one to deliver the news to the farmers you would shrivel up like a raisin. Funny how that works, isn't it? Go back to cheering for the oil companies, they sure don't owe anything to help from their bought politicians...

Re:Just another cautionary tale (0)

Anonymous Coward | about a year and a half ago | (#42205859)

Do we still subsidize tobacco growers?

Re:Just another cautionary tale (1)

Anonymous Coward | about a year and a half ago | (#42207271)

Tobacco farmer here. Yes. It's the only reason I still grow it.

Re:Just another cautionary tale (5, Insightful)

mspohr (589790) | about a year and a half ago | (#42205769)

Just a few clarifications to your post.
Loan guarantees are not grants.
A123 received a $250 million loan guarantee, not $90 billion.
Government has a vital role to play in keeping the economy moving. This is done through tax incentives, loans, stimulus programs and grants.
The problem is that the wrong corporations capture these incentives. Obsolete industries and industries which are doing fine without incentives tend to capture most of them... (i.e. General Electric receives enough government incentives that they pay no taxes but they are a perfectly viable business to stand on their own.)

Re:Just another cautionary tale (3, Insightful)

Endovior (2450520) | about a year and a half ago | (#42205879)

Loan guarantees like the one A123 got totalled $90 billion in the "stimulus" bill passed in 2009. Government sticking its thumb on the scales of the economy is always a bad idea--whether it be bailing out banks or perpetual ethanol subsidies + ethanol mandates + import tariffs.

Just a few clarifications to your post. Loan guarantees are not grants. A123 received a $250 million loan guarantee, not $90 billion. Government has a vital role to play in keeping the economy moving. This is done through tax incentives, loans, stimulus programs and grants. The problem is that the wrong corporations capture these incentives. Obsolete industries and industries which are doing fine without incentives tend to capture most of them... (i.e. General Electric receives enough government incentives that they pay no taxes but they are a perfectly viable business to stand on their own.)

Read post more carefully before refuting, parent was quoting the total amount of 'stimulus' loan guarantees in that year, not the money given to A123 specifically. Now, you could argue that it'd work fine if it weren't for the 'wrong' corporations getting the money, but really... are there 'right' corporations that could be getting money? Someone has to pay the taxes in the first place, after all... and since when has robbing Peter to pay Paul ever resulted in net gains?

Re:Just another cautionary tale (0)

Anonymous Coward | about a year and a half ago | (#42205985)

and since when has robbing Peter to pay Paul ever resulted in net gains?

When Peter had billions in cash flow going unused except to pad the bank accounts of those already mega-rich, and Paul had a winning business idea but no funding since he wasn't part of the good old boy network. You may be too young to know the dangers of vast wealth accumulation, but pick up a history book some time and you will find out all about it. An economy that favors the big over the small never wins in the long run.

Re:Just another cautionary tale (3, Insightful)

Anonymous Coward | about a year and a half ago | (#42206323)

Oh god that's such bullshit.

If you can't get your fucking "winning business idea" funded, then your idea is not a "winning business idea."

Oil companies are not the only companies out there. If you have an amazing idea for clean energy, there are literally THOUSANDS of other investors you could court with pockets deep enough to help you realize your dream. Stop whining about "fat cats refusing to fund my ideas," and start coming up with ACTUAL WORKABLE BUSINESS MODELS.

Re:Just another cautionary tale (0)

Anonymous Coward | about a year and a half ago | (#42206625)

The thing is if it never gets funding, you'll never know...hypotheses will always abound but the proof of any pudding is reality.

witness angry birds and gangnam style.

Re:Just another cautionary tale (4, Informative)

aaarrrgggh (9205) | about a year and a half ago | (#42206697)

Wow. You are missing the whole concept of Risk and Return on Investment.

Simple example is a SBA loan for a small company to buy a building for their operations (or other capital investment). The bank would normally require 30% down payment to mitigate risks; the SBA loan basically provides a 40% guarantee so the business only needs to put down 10%. The SBA provides that guarantee to help small businesses grow in ways that would otherwise be impractical at best. In return, the small business (hopefully) can grow, hiring people and stimulating the economy. Risk for the SBA loan is first taken by the business, then the government, and then the lender. SBA loans have interest rates about 0.75% above what a well qualified homeowner could get, rather than the 7-10% that might otherwise be required.

The bank is going to need that 7-10% interest to absorb the risk of a 90% loan, which simply takes money away from the small business and their growth opportunities.

Re:Just another cautionary tale (2, Insightful)

Anonymous Coward | about a year and a half ago | (#42206373)

What part of simply not taking their money away is the government "favoring" business? If the government is favoring anyone, it's the people who they give handouts to.

Yes, big business also gets handouts. Those are wrong too. However, just because you're rich doesn't mean you got it from a government hand out, and it certainly doesn't mean that the government is "favoring" you by staying out of your way. That's like a mobster who isn't "protecting" you from anyone other than himself and his own thugs.

Re:Just another cautionary tale (2)

khallow (566160) | about a year and a half ago | (#42206615)

When Peter had billions in cash flow going unused except to pad the bank accounts of those already mega-rich, and Paul had a winning business idea but no funding since he wasn't part of the good old boy network. You may be too young to know the dangers of vast wealth accumulation, but pick up a history book some time and you will find out all about it. An economy that favors the big over the small never wins in the long run.

So to fix this alleged problem, you suggest government action? Here's a few of the problems I spot right now. First, the US government has no particular expertise in this area. The private market simply is far better for funding this sort of thing. Second, the mega-rich good old boys play this political game far better than Paul ever could. Third, the US government has driven wealth accumulation in numerous ways, such as regulations and bureaucratic mazes that favor big, established players, a huge revenue stream that can and is suborned by that good old boy network, and discouraging the use of US labor (by driving up the cost of it).

Re:Just another cautionary tale (0)

Anonymous Coward | about a year and a half ago | (#42207401)

Third, the US government has driven wealth accumulation in numerous ways, such as regulations and bureaucratic mazes that favor big, established players, a huge revenue stream that can and is suborned by that good old boy network, and discouraging the use of US labor (by driving up the cost of it).

So your complaint is basically "hey we are doing it this way already, surely it is the best way, better not change it!"

Good thinking.

Re:Just another cautionary tale (1, Insightful)

khallow (566160) | about a year and a half ago | (#42205959)

Loan guarantees are not grants.

Well, the previous poster did call it a loan guarantee. As to whether or not it is a "grant", it's indistinguishable from a grant to the people that received money from that loan that would otherwise not happen and the bank that made that loan who would otherwise have to deal with the default instead of a fairly risk-free investment. All of this happened at considerable taxpayer expense.

Government has a vital role to play in keeping the economy moving. This is done through tax incentives, loans, stimulus programs and grants. The problem is that the wrong corporations capture these incentives. Obsolete industries and industries which are doing fine without incentives tend to capture most of them... (i.e. General Electric receives enough government incentives that they pay no taxes but they are a perfectly viable business to stand on their own.)

The government that has the money to keep the economy moving, has the money to flush down sinkholes and does. It's almost like they have no incentive to actually keep the economy moving.

Re:Just another cautionary tale (1)

aaarrrgggh (9205) | about a year and a half ago | (#42206899)

From DOE's loan program page:

Credit subsidy cost is a reserve established by the U.S. government to cover the risk of estimated shortfalls in loan repayments. It was established by the Federal Credit Reform Act of 1990 (“FCRA”) and represents the net present value of the estimated long-term cost to the U.S. government of the loan guarantee. Credit subsidy cost is primarily influenced by two key variables:

        Probability of default; and
        The “recovery” after default.

These variables are used to “risk adjust” the borrower’s principal and interest payments to the government, and provide an estimate of payment shortfalls.

Section 1702(b) of Title XVII provides that DOE must receive either an appropriation for the credit subsidy cost of a loan guarantee or, in lieu of an appropriation, a cash payment of such cost directly from the applicant.

So, at least in theory, the loan guarantee program is self-funding, paid for by the loan applicants. The caveat is when the credit subsidy cost comes from a government appropriation; in that case the government is investing a very small percentage of the loan value into the default pool. I'm sure major defaults hit the budget, but I doubt this is anything compared to the guarantees provided for nuclear power.

Re:Just another cautionary tale (1)

khallow (566160) | about a year and a half ago | (#42207181)

If this program were really in effect, then the companies in question wouldn't have been able to afford a loan. What's painfully obvious here is that the government decided who the winners and losers would be and then understated the risk of default, either deliberately or through sheer incompetence.

As to the guarantees for nuclear power, I have no trouble getting rid of them. Go for it.

EXCUSE ME? (5, Insightful)

Anonymous Coward | about a year and a half ago | (#42206391)

Government has a vital role to play in keeping the economy moving. This is done through tax incentives, loans, stimulus programs and grants.

Yeah, by ripping off people by creating an A123 Systems, Solyndra, you NAME it, they keep the economy going! You know, the guys who just chew up money, give it to their buddies, and run off having raped everyone with a corporate scam. And by keeping the economy going, I mean inflating and taxing the US economy into asphyxiation to where PEOPLE HAVE NO MONEY TO BUY because they are paying for this corporate welfare garbage. Except that they aren't because the debt is GROWING AT ABOUT FOUR BILLION DOLLARS PER DAY.

FREE markets which are markets free from government meddling (this includes corporate welfare and tax breaks for the big businesses) allow the economy to work AS IT SHOULD. Consumer demand drives supply chains. Consumer demand is WHAT PEOPLE WANT. When people get what they want, you have a healthy economy.

You can put financial regulations and environmental protections in place against businesses all day long, but as soon as you try to force the market to do something, it will adapt. For instance, there is an anti-tobacco subsidy where the government pays you to not plant tobacco. You plant one acre to prove that you can plant tobacco, and the government gives you FREE MONEY to not plant tobacco on the rest of the land. It doesn't take but five seconds of thought to understand how not only does this increase the growth of tobacco but drains the coffers at the same time. This is one of the simplest examples. You end up with your controls both fostering corruption (great way to pay yourself or your buddies) and creating inefficiencies in the economy which will be bypassed as there is still demand for whatever the government was trying to kill and which will be abused because there is an artificial free supply of government-issued "incentive."

Mod parent up! (3, Insightful)

Anonymous Coward | about a year and a half ago | (#42207031)

I think I get where you're going with the "environmental regulations" argument though that can somewhat be argued the same way. If there is a way around a regulation, you'd better be sure the market will find it!

Look at it this way. We have a population of ~270 million "entities of self interest." They're all chipping away at whatever they can get a piece of. If the government is spending half the GDP on the weapons of war, well, where do you think all the jobs are going to be? Yeah. So everyone's getting a job with a government contractor making UAVs, analytics software for intercepted comms, etc. which have no use in the consumer market. Of course, since the tech is there, someone will make money now selling the equipment which ends up turning the police agencies para-military. Instead of this, couldn't have we just NOT gone into so much debt with these military contractors and let the economy do its thing? The guys running the NSA spy/data centers could have been employed by NVIDIA to design an even better GPU since the capital would have been free for your average Joe to buy more of their video cards. From there, your Lockheed guy might as well have been at a startup designing a new AI that could make use of all that power and actually contribute something progressive to mankind like autonomously surveying the canyons of Mars for mineral deposits or an asteroid for mining potential.

To add to the loan/subsidy issue, I will bring up student debt. A generation ago, no one had substantial student debt. If you wanted to work your way through university in the states, you actually could. Now with the government cramming Stafford and Parent Plus loans down everyone's throats, you're typically stuck with either taking the loan or going to work in the food service and paid nothing. When the students get this "free money" (money printed for free by the bankers and given to their friends so that they can charge you 9% interest) and have NO idea how much, say, $20k/semester actually means, they'll just take the loan! When the student isn't qualified for a loan, there is a "Parent Plus" loan which must be taken out in the parent's name despite the student of course being completely independent from his parents. (My dad was dead and I was not a taxable dependent as I was actually working while in school, and Georgia Tech still crammed this down my mom's throat in '08.) When this kind of thuggery happens, yeah, schools can charge WHATEVER THEY WANT, and those fees will be paid.

That's what happened in my case when I was in school.

And yep, I work for a government leech doing UAV stuff now. But it gets the student loans paid, so I can't complain. ;)

Re:Just another cautionary tale (2, Insightful)

Anonymous Coward | about a year and a half ago | (#42206467)

Loan guarantees are not grants.

When you hand them to companies in businesses that are too risky to actually obtain private financing, they might as well be grants.

Government has a vital role to play in keeping the economy moving.

That is an opinion. And an opinion that could quite possibly why we have the sort of problems we do. Big government breeds big business. Government bureaucracy and regulations are an added cost drag on the business of actually producing and selling products, and they force businesses into having to be larger in order to offset the massive overhead of accounting and regulatory compliance required by a government.

Think I am full of crap? Try as a small business to obtain a government contract outside of very, very small items if you don't have inside contacts. You'll double the size of your company overnight just hiring people to fill out paperwork.

Re:Just another cautionary tale (1)

curtwoodward (2147628) | about a year and a half ago | (#42206591)

The $250M was not a loan guarantee, it actually was a matching grant - for each dollar the company spent on certain qualifying expenses, the feds would match a dollar. A123 eventually drew about $130M of the nearly $250M that was authorized. Press release: http://ir.a123systems.com/releasedetail.cfm?ReleaseID=403090 [a123systems.com] The money was free in that sense, but came with strings - the factory that A123 built with help of that federal money means the U.S. government retains an interest and gets a say in what happens to the assets in bankruptcy.

Re:Just another cautionary tale (4, Insightful)

bill_mcgonigle (4333) | about a year and a half ago | (#42206609)

Government has a vital role to play in keeping the economy moving. This is done through tax incentives, loans, stimulus programs and grants.

That's their claim, but it's hogwash. Every dollar 'given' as stimulus has been taken from other people, either directly through taxes, or by devaluation of capital through inflation.

That capital is thus no longer available to its original (proper) owners, and so cannot be invested by them. The only remaining question is whether the government is more careful with how it invests other people's money than they are themselves.

To illustrate the point, may I present: A123 Systems.

Re:Just another cautionary tale (0)

Anonymous Coward | about a year and a half ago | (#42205973)

How much do middle east wars cost?

Re:Just another cautionary tale (2, Insightful)

jythie (914043) | about a year and a half ago | (#42206105)

Eh, it is an old debated topic. However, in general, a government doing some tipping is better then an economy left completely to its own devices. The general problem is, businesses do what is best for them and worst for everyone else.. when everyone is doing this things end up in pretty bad shape. You need a counter force in there that can look at the big picture and do what is best for the economy as a whole. I will not pretend governments are fantastic at it, but a sub par job still results in more stability and growth then none at all... or the more likely outcome is a cabal of businesses usually end up banding together and they end up preforming that role instead. While it can be argued the fed is in buisness's pocket, the election mechanism and institutional balance still provide some counter to what would otherwise be a purely business driven scale tipping.

Not at all better (3, Insightful)

SuperKendall (25149) | about a year and a half ago | (#42206201)

in general, a government doing some tipping is better then an economy left completely to its own devices

Totally false.

A123 being propped up by the government meant that other companies developing battery technology were less likely to work on similar problems because they had to get real money, which would have been also less easy to come by with A123 funded in that space.

Private investors are way more careful to invest in things that might work. They are obviously smarter at this because they are using real money, with real consequences for loss. Neither is true of government funds. The government stinks on ice at picking out winners in the market and in the end most of the money they give out is essentially a laundering operation to campaign donors.

Re:Not at all better (3, Insightful)

Anonymous Coward | about a year and a half ago | (#42206511)

You completely neglect the market forces at work in the 1800's before the trust busting days of the US government. The only force powerful enough to dislodge the rabidly growing trusts was the US government - and then it was only a matter of time. Free markets break down when there are monopolies, monopolies form and grow if allowed to, and monopolies eventually become inherently destructive. If it wasn't for the government, there wouldn't have been a Microsoft monopoly, because US Steel or Standard Oil or AT&T or one of the railroads would have owned them or shut them down.

To declare that a government has no place in the markets is just unicorn shit pie.

Re:Not at all better (2)

khallow (566160) | about a year and a half ago | (#42206837)

You completely neglect the market forces at work in the 1800's before the trust busting days of the US government.

And the markets. Those trusts were bleeding market share. It probably wouldn't have been fast enough for you since the process was happening over decades.

But let's suppose you are right. That still doesn't justify the vast majority of what the US does. A need to prevent monopolies doesn't lead to the government regulating so much of US society or shoveling so much money around.

Re:Just another cautionary tale (5, Informative)

Fast Thick Pants (1081517) | about a year and a half ago | (#42206257)

For perspective, the tax breaks given to oil companies amounts to about $2.4 billion/year (in the form tax breaks which are similar to the same tax breaks that every other industry gets for investing in expansion). Loan guarantees like the one A123 got totalled $90 billion in the "stimulus" bill passed in 2009.

Where's this $90 billion number from? $88 billion over ten years was the total for titles II, IV, V, and VIII of the ARRA bill. Loan guarantees are only part of this. [economist.com]

Wikipedia puts the total green-energy loan guarantees at $6 billion. [wikipedia.org] There might be some other loan guarantees hiding in other categories, but your total is suspect, and comparing an annual number to a ten-year number is deceptive regardless.

Re:Just another cautionary tale (2)

tacokill (531275) | about a year and a half ago | (#42206897)

WTF? The link that YOU provided clearly shows it's at least $27bil. Or did you not count "investments" in electric vehicles?
I suppose you can define "green" however the hell you want to but outside of the spin machine, normal people can see - exactly - what is going on. Solyndra. A123. etc....

Go look at the pinnacle of the new green economy: Greensburg, KS. [wikipedia.org] Remember that place? Yea, we don't either because we all knew it was a big joke.

Re:Just another cautionary tale (5, Informative)

Sarten-X (1102295) | about a year and a half ago | (#42206685)

Loan guarantees like the one A123 got totalled $90 billion in the "stimulus" bill passed in 2009.

Not quite. A123's loan guarantee (totaling only $17 million, with an "m") came from the Department Of Energy, not directly through the stimulus bill. The DoE has extended about $34 billion in loan guarantees (of which only a small amount is actually expected to be paid out). A thorough analysis of the program is quite an interesting read [nearwalden.com] .

The best source [economist.com] I can find for the quoted $90 billion is the total cost ($88 billion) for "purchases of goods and services" which included a number of other programs as well as funding the DoE loan guarantees. Note that the entirety of A123's loan, had the guarantee been paid, is about 1% of the rounding error.

Government sticking its thumb on the scales of the economy is always a bad idea--whether it be bailing out banks or perpetual ethanol subsidies + ethanol mandates + import tariffs.

That's the whole point of government, though. As I've said before, humans suck. We're terribly biased and selfish. Left to our own devices, we'll kill each other over trivial matters, because we really don't care about anything beyond our local community. That's just how our brains have evolved. Sure, philosophically we can consider the notion of loving everybody and being nice, but that's not our instinct. We have to work for it.

That's where government comes in. Government is an abstraction that gives us an excuse to make policies based in philosophy, rather than just what we want at the time. If a politician thinks a big farming industry is really good in the long run, they'll support a subsidy, even if that means higher taxes right now. Since the policies are just abstract ideas to the politicians, rather than actual food disappearing from their dinner table, the politicians' human brains can make a less-biased decision based on the information they're given.

Of course, now it's that information that can be tainted by need and greed. Each politician thinks they're doing what's best, and voting for what will most help their constituents. This is why it's important to communicate with your representatives about issues you're knowledgeable about, and double-check your facts. Of course, since all humans are biased to believe that their opinions are objectively right, the burden's on you to provide enough proof to make a convincing argument.

Re:Just another cautionary tale (1)

Bigby (659157) | about a year and a half ago | (#42206559)

And that was some counter to the GP? Or were you just amending cases of how the government has been wasting money, screwing up the economy by including the likes of the oil and banking industries?

Re:Just another cautionary tale (3)

operagost (62405) | about a year and a half ago | (#42206979)

I assume your first argument is the standard "appeal to tradition" and the second one is a special pleading for the "green energy" industry, that it's "hard". It's "hard" to safely and effectively survey new oil and gas deposits, drill wells, pump it out, ship it, refine it, and distribute it without breaking any government regulations. I won't even go into what is required to build coal or nuclear power plants.

The fact is that government should not be talking about "investing" and other words that refer to free market capitalism, which is anathema to government. Government is supposed to spend money on things that are in the public interest, not necessarily those things that would make a profit. But when we see them throw money down a hole like this, it looks a lot more like crony capitalism.

Open vs. Closed (1)

alexander_686 (957440) | about a year and a half ago | (#42207399)

There is one critical difference between the examples you give and A123.

You referred to special breaks given to an industry as a whole. In theory anybody could set up a oil / agribusiness, etc. and enjoy those breaks. Dirty but open.

A123, on the other hand, was given preferential treatment that only they got. If I open a battery business tomorrow I may not enjoy the same break. Dirty and closed. That to me represents a greater danger because now awards are offered to who you are instead of what you are doing.

Re:Just another cautionary tale (1)

Anonymous Coward | about a year and a half ago | (#42205487)

Plural of anecdote is not data. Hence the [Citation Needed]

Re:Just another cautionary tale (0)

Anonymous Coward | about a year and a half ago | (#42205507)

Green tech is the first big industry to come of age when globalization has basically demanded that government-scale investment get involved, lest other competing governments take hold. If the president is at fault here, it's for not helping enough (exactly like Solyndra.) We are going to hand this industry over, part and parcel, to the Chinese since we had the poor insight to let them hold billions in currency and the even poorer insight to ignore what they were doing with it.

But don't worry, it will either soon be too hot in china to grow any food, or it will be too unprofitable to produce green tech and they will have wasted all their US dollars on worthless machines.

Re:Just another cautionary tale (2, Interesting)

Anonymous Coward | about a year and a half ago | (#42205617)

If you think the government is not doing enough, feel free to donate your money. No need to force your wealth transfer religion on others.

Re:Just another cautionary tale (3, Interesting)

Nadaka (224565) | about a year and a half ago | (#42205839)

The wealth transfer religion is that of the demagogs insisting that the unregulated market cures all ills. And it is a transfer of wealth from the productive working members of society to the non-working class of the plutocrats, those wealthy enough to grow their wealth by leaching off the labor of others without contributing any real labor in return. It is a religion that is destroying America as a power and will ultimately lead to the annihilation of our liberties and way of life, a return to absolute despotism at the hands of a noble class that feels entitled to everything their serfs can produce.

Re:Just another cautionary tale (2)

khallow (566160) | about a year and a half ago | (#42206119)

The wealth transfer religion is that of the demagogs insisting that the unregulated market cures all ills.

What evidence do you have for this assertion? Let us keep in mind that there is no "unregulated market" aside from a few toy markets and in a sense the black markets (where if you trade on them, you already risk going to jail and other punishments, so they aren't going to be pretty). So there just isn't a whole lot of evidence for this assertion that unregulated markets transfer wealth to plutocrats.

Instead, I think the simple explanation is that the value of labor has declined in recent decades due to a vast expansion of the global pool of labor. And the value of capital has not declined. This already favors those who own capital over those who work. So what has the US done in response? It has made US labor more expensive to hire and punished businesses for hiring people (such as the regulation and cost surges employers experience at both the first employee hired and the 50th employee hired). This is insane.

But sure, let's do a two minute hate for the nonexistent, unregulated market which is the source of all our self-inflicted woes.

Re:Just another cautionary tale (3, Informative)

DudeTheMath (522264) | about a year and a half ago | (#42206425)

If you need evidence of wealth transfer to plutocrats, simply Google "ratio of ceo pay to worker pay" to find some. The second hit is to The Economist ("Are They Worth It?"), which shows the change in ratio from about 20 in the '70s to well over 200 today, and the fourth to WSJ discussing a Dodd-Frank provision that could cap that ratio. That WSJ piece refers to a recent study showing productivity drops as that ratio increases.

Re:Just another cautionary tale (1)

khallow (566160) | about a year and a half ago | (#42207103)

If you need evidence of wealth transfer to plutocrats

Where's the free market in that? As far as I can tell, this particular bit of wealth transfer is due to a small clique which happens to control executive funding at many publicly traded companies. And membership in that clique seems to be controlled by a bunch of pension and mutual funds.

Re:Just another cautionary tale (1)

Baloroth (2370816) | about a year and a half ago | (#42206353)

The wealth transfer religion is that of the demagogs insisting that the unregulated market cures all ills. And it is a transfer of wealth from the productive working members of society to the non-working class of the plutocrats, those wealthy enough to grow their wealth by leaching off the labor of others without contributing any real labor in return. /p>

About the first sentence first: most people against wealth transfer aren't preaching an utterly unregulated market, so nice straw man there (some do, yes, most don't). About against the second sentence: you really don't understand how capitalism works, do you? The wealthy who invest their money so that others can use it to amplify their labor are taking considerable risks, or would be if it weren't government intervention, see: bailout. The key point is that a heavy investment of capital amplifies the labor of the workers, a fact many people seem to ignore. Without those wealthy people "leeching off" others, you wouldn't have smartphones, the Internet, or almost anything factory produced, for that matter. The desire for more wealth prompts investments of money which make possible large-scale endevours that would be utterly impossible without them, and while government could in theory replace the investors, in reality the combination of corruption and lack of motivation for efficiency results in a system that simply does not work (see: Communism, esp. the USSR).

Re:Just another cautionary tale (1)

Anonymous Coward | about a year and a half ago | (#42206687)

The "religion" of the "demagogues" you are talking about is very simply:

Owning more of something doesn't give you the right to take it away from me, unless I obtained it illicitly.

The fact that people have to run around, using names like "plutocrats" or "robber barons" or "1%ers" is just cover for the belief that you have the right, or even the duty, to take things away from other people if you think they have too many of them, without any reference to how they might have obtained those things.

Of course, no one can stop you from doing that, if you have a majority, but if you take money away from people who earned it fair and square, and hand it to people who have not earned it, then you start rewarding unproductive behaviors and artificially increasing the importance of skill sets that are not valuable. That sort of behavior is why you have a city of autoworkers who have full retirement plans and high wages, but you can't seem to find enough people to operate computers and want to do science and technology.

Re:Just another cautionary tale (1)

Synerg1y (2169962) | about a year and a half ago | (#42205659)

True... real business men don't need federal grants to create their money making machines. Quality is their problem, that's a symptom of bad decisions from the top down.

Re:Just another cautionary tale (1)

jimicus (737525) | about a year and a half ago | (#42205831)

Very, very few businesses fail for a single reason. Similarly, very few businesses are successful for a single reason.

Re:Just another cautionary tale (1)

Anonymous Coward | about a year and a half ago | (#42205967)

Nope, nothing never.

What a flop the internet and space programs turned out to be.

Re:Just another cautionary tale (0)

Anonymous Coward | about a year and a half ago | (#42206339)

What a flop the internet and space programs turned out to be.

Careful, there: SpaceX seems to be doing significantly better with significantly less money than NASA these days.

Private enterprise... (1, Insightful)

hpa (7948) | about a year and a half ago | (#42205453)

The whole point of private free enterprise is that risks can be taken, with the hope of a big payout. Well, guess what, sometimes it doesn't pan out. That's the system, it is how it is meant to work.

Re:Private enterprise... (1)

Anonymous Coward | about a year and a half ago | (#42205611)

Except when government invests it's not a 'private free enterprise'...I have no problem with government investing in 'fundamental research', much of which may not ever pan out but throwing away money like this is irresponsible. Why wasn't the money tied to regular reports to a CPA or Management type? Demonstration of a 'solid business plan' etc. how can a company who is losing money every year and with minimal sales get ANY funding...I don't subscribe to notions of Obama 'throwing money at his friends' but it's extremely irresponsible of ANY government to invest in a company without doing the normal work that say an 'Angel Investor' would do.

Frankly, the government should just hire Warren Buffet to handle all their investments for them or just get out of business entirely.

Re:Private enterprise... (2)

ShanghaiBill (739463) | about a year and a half ago | (#42206061)

it's extremely irresponsible of ANY government to invest in a company without doing the normal work that say an 'Angel Investor' would do.

The problem with your scenario is that the private investors already looked at it and declined to invest. Any company that comes to the government for capital, is almost by definition a bad investment.

... or just get out of business entirely.

Ding ding ding!

Re:Private enterprise... (1)

Bigby (659157) | about a year and a half ago | (#42206595)

This was akin to "fundamental research". It isn't the government's job to do high risk investments. IMO, it isn't their job to most investments. I think they should only do investments that help provide everyone with an equal opportunity to succeed in life. Venture capital doesn't fall under that umbrella.

Re:Private enterprise... (1)

AwesomeMcgee (2437070) | about a year and a half ago | (#42207201)

Word, screw this internet thing. What a waste of tax payer dollars, it's helped no one succeed in life.

Re:Private enterprise... (3, Insightful)

LehiNephi (695428) | about a year and a half ago | (#42205639)

The problem is that it wasn't exactly a private free enterprise. They received a $17.1m loan guarantee from the federal government, without which their plant would not have been built. Investors saw them as a bad risk, and appropriately declined to invest in them.

Re:Private enterprise... (0)

Anonymous Coward | about a year and a half ago | (#42205807)

There are cases where investors may not be willing to stick it out long enough to see a return. Not because its a bad idea or investment. I'm not saying that my point applies in this case, but there is a role for government to support research in technologies that have a longer time horizon to be realized that most investors can stomach.

Re:Private enterprise... (1)

ShanghaiBill (739463) | about a year and a half ago | (#42206125)

There are cases where investors may not be willing to stick it out long enough to see a return.

Sure. But this was NOT one of those cases. They didn't get the government handouts to do research. They got it to build a factory . You don't build factories unless you have already figured out how to make money (unless, of course, you are building it with free money that was just handed to you).

Re:Private enterprise... (1)

khallow (566160) | about a year and a half ago | (#42206183)

There are cases where investors may not be willing to stick it out long enough to see a return.

One such case is businesses that will never make a positive return on investment.

but there is a role for government to support research in technologies that have a longer time horizon to be realized that most investors can stomach.

I strongly disagree. Government doesn't have the expertise to make good investments of this sort. Nor does it have the incentives to do so (there's no advantage to government officials whether R&D works or not). And please remember the opportunity costs. This money doesn't form out of the void. It comes from current or future taxpayers. Anything the government does with that money comes at the cost of what those taxpayers could have done with the money.

Re:Private enterprise... (2)

h4rr4r (612664) | about a year and a half ago | (#42206161)

So we should never build any nuclear power plants?

All of those are built with government backed loans and are insured by the government as well.

Re:Private enterprise... (2)

ShanghaiBill (739463) | about a year and a half ago | (#42205735)

The whole point of private free enterprise ...

Except that it wasn't "private free enterprise". A123 Systems received hundreds of millions of dollars in taxpayer subsidies.

Government funding of basic scientific research makes sense. Government funding of manufacturing is idiotic. If private investors are unwilling to put up their own money to build the factory, that is a good sign that the factory is not going to be economically viable.

Re:Private enterprise... (-1)

Anonymous Coward | about a year and a half ago | (#42205929)

Supposedly they had rechargable batteries that could survive long periods of time over extended temperature ranges with many recharge cycles. They did this through a magic design that combined iron phosphate with nanotechnology. The problem was that the batteries did not perform as advertised. That meant expensive batteries that underperform specification either being junked at the factory or replaced in the field (the article describes this as quality and yield problems).

Re:Private enterprise... (0)

Anonymous Coward | about a year and a half ago | (#42206221)

Which is fine, until "doesn't pan out" takes a quarter billion $'s from the DOE down with it. Then it kinda stings. But at least it's not quite the half billion $, Solyndra sized turd.

A123: Nice penny stock (0)

ub3r n3u7r4l1st (1388939) | about a year and a half ago | (#42205479)

http://finance.yahoo.com/q?s=aoneq&ql=1 [yahoo.com]

any acquisition news means big jump.

Re:A123: Nice penny stock (1)

mschaffer (97223) | about a year and a half ago | (#42205645)

Ah! Failed companies and penny stocks. People gleaning the refuse of the stock market like vagrants to discarded cigarette buts.

Bullshit. (5, Interesting)

Anonymous Coward | about a year and a half ago | (#42205571)

A123's 'success' was built on DOE funded research dollars that went to MIT. This money was used to develop key patents that were then 'auctioned off' to A123. A123 just happened to be a company set up by the head researcher whose name appears on the MIT patents. Of course, he was only a minority shareholder as it was the cigar-smokers who get to be the majority shareholders. None of these cronies know anything about actually running a company, but they can certainly sell shares, which is what they did. I tried to find out how to get in on these patent auctions and the process is so guarded that an outsider can't even find out how it goes down. When I tried to inquire about it, I was immediately sent to an MIT public relations officer who would only give me long sermons about all these studies that have demonstrated that since Congress passed the laws to create patents and grant exclusive licenses on technologies developed with public monies it's been nothing but unicorns and rainbows. I finally had to hang up on the guy when he wouldn't even respond to any question I tried to ask him. He just kept spewing his propaganda like a fucking robot.

Re:Bullshit. (0)

Anonymous Coward | about a year and a half ago | (#42206007)

"The lady doth protest too much, methinks."

Re:Bullshit. (4, Funny)

SydShamino (547793) | about a year and a half ago | (#42206017)

He was a robot. MIT patented a Turing PR bot. That patent is going to auction next week actually, but I'm not going to tell you the details...

Re:Bullshit. (1)

Bios_Hakr (68586) | about a year and a half ago | (#42206197)

A123 had other problems as well. The batteries they produced were worse than other Lithium batteries in almost every way. Heavier, lower energy density, fewer cycles, etc... Their only advantages was that they could be charged quickly and they kinda resembled (but weren't interchangable) batteries people were used to seeing at the supermarket.

As LiPo batteries evolved, they were able to charge more quickly and their energy density has gone through the roof.

Re:Bullshit. (0)

Anonymous Coward | about a year and a half ago | (#42206245)

They got the MIT (DOE funded) LiFePO4 patent, so didn't have to pay the ridiculous royalties of the Goodnough patents.

Fisker Karma fires? (1)

mschaffer (97223) | about a year and a half ago | (#42205585)

Is this the supplier of the batteries in the Fisker Karma cars that burned in the Sandy flood?

Re:Fisker Karma fires? (4, Informative)

GameboyRMH (1153867) | about a year and a half ago | (#42205939)

Yes. Any similar batteries are just as likely to catch fire if flooded with salt water, however.

Rhetorical? (2)

The Grim Reefer (1162755) | about a year and a half ago | (#42205667)

Question:

How'd A123 fall so far, so fast?

Three words later...

its reliance on just two big customers

Answered

Re:Rhetorical? (1)

curtwoodward (2147628) | about a year and a half ago | (#42205689)

That's professional writin' right there. I got a degree and everything.

Re:Rhetorical? (1)

K. S. Kyosuke (729550) | about a year and a half ago | (#42206137)

Actually, this article [detroitnews.com] suggests that Romulans were involved. My general grasp of current geopolitics may be rusty, but I suspect that Romulan involvement is never good.

JUMP YOU FUC*KERS! (-1)

Anonymous Coward | about a year and a half ago | (#42205755)

Open up the window, check out the view, and jump your fuc*kers
http://www.youtube.com/watch?feature=player_embedded&v=yge311sFhC8#!

Re:JUMP YOU FUC*KERS! (-1)

Anonymous Coward | about a year and a half ago | (#42206141)

Original... http://www.youtube.com/watch?v=9TYezSrzUUs Same post as AC 1257 42205755 I swear you cock suckers!!

Having worked for a corporation that bet big on .. (3, Insightful)

boethius (14423) | about a year and a half ago | (#42205787)

... so-called "green/cleantech" I can say unreservedly it was about 99% hype and 1% reality. They dropped at least $2B in their attempt to diversify their portfolio into greentech and acquired a number of companies - including the one I worked for - to buy their credibility in the solar panel marketplace.

As it turned out, said marketplace - and greentech in general - was and is a bust. Rich yuppies are basically the only ones that can afford to purchase, install, and maintain solar panels even with massive State and Federal government subsidies both in the U.S., Europe, and elsewhere. Given the very poor efficiency of solar panels and their very long term ROI, those yuppies are the only ones with more money than good sense.

For all Al Gore's, the UN, and pro-globalists' hand-wringing over AGW (and I'm not here to get into THAT debate), the reality is that most people and therefore most businesses aren't particularly concerned about climate change. When the economy tanked in the 2008-ish time frame, the corporation I worked for - the world's largest semiconductor equipment company - said they had, in their 30+ years in business, NEVER see demand drop off a cliff the way it did. Consumer demand for electronic gadgets quite literally disappeared and did so almost overnight. It was a stunning hit to the solar plexus of that industry. Needless to say, a year on I was laid off.

Greentech far from saved them - and, thankfully, at least it was mostly THEIR OWN dollars they spent on greentech investments -- and it turns out the vast majority of the dollars they dumped into those investments turned out to be giant loss. It was nearly all hype and very little reality.

On a mundane level I don't have a huge problem with the Federal government taking big bets on cutting-edge technology that private industry typically can't afford. Note: NASA, the Military in general (from whom we have GPS among many other military-to-private sector innovations to thank for), and of course DARPA from whom we may not have this little thing called the Internet.

Even if there was no real skepticism around climate change I don't believe it would matter. The money the UN wants from the major nations to "fix" climate change would end up being a giant slush fund for lavish UN diplomat expenses. I'd bet big money not a dime would go to any good or positive net effect to supposedly fix or even seriously address climate change issues beyond expensive committees filing expensive 500-page reports and jet-setting between Dubai and New York and London and Tokyo to confab with like-minded global elitists. Climate change isn't something that will be fixed on a macro scale. That, among many other reasons (i.e., the general massive corruption and ultimate pointlessness of the UN), is why so many nations are resisting funding this cluster. Many people are struggling to merely survive in this world - in fact, the vast majority of the global population is in that bind - and concern over how many hydrocarbons they're pumping into the environment is of zero to less-than-zero concern.

Re:Having worked for a corporation that bet big on (0)

Anonymous Coward | about a year and a half ago | (#42206059)

"Long term ROI" is not equal to "No ROI"

But if your attention span were long enough to capture more than the last cheeseburger you stuffed in your face or the glenn beck novel you wiped your hands on, you probably would know that.

Re:Having worked for a corporation that bet big on (1)

Anonymous Coward | about a year and a half ago | (#42206427)

"Long term ROI" is not equal to "No ROI"

But if your attention span were long enough to capture more than the last cheeseburger you stuffed in your face or the glenn beck novel you wiped your hands on, you probably would know that.

Last I checked, long-term ROI on solar panels exceeded their life expectancy, so effectively long-term ROI for solar panels is equal to zero or negative ROI. Which, if your attention span were long enough to capture more than the organic bullshit you stuffed in your face or the Al Gore novel you wiped your hands on, you probably could have done the math to figure that out.

Re:Having worked for a corporation that bet big on (3, Insightful)

ETEQ (519425) | about a year and a half ago | (#42206335)

For all Al Gore's, the UN, and pro-globalists' hand-wringing over AGW (and I'm not here to get into THAT debate), the reality is that most people and therefore most businesses aren't particularly concerned about climate change

Lets be a bit more honest here: you don't have to be a "pro-globalist" to be worried about Climate Change. The science is the same regardless of the politics (even if political pre-conceptions make people want to ignore it). And I think it's not reasonable to say that if most people were concerned the businesses would be as well. They all have a vested interest in the status quo and hence will nearly always be behind the direction the people (or scientific results) are going. It's only in the ideal free market fantasy that this isn't true.

Climate change isn't something that will be fixed on a macro scale.

This is a pretty close-minded attitude, and this sort of thinking is most likely the main thing that may indeed prevent it from being fixed this way (or at all). Just because some greentech doesn't work, that doesn't mean none of it will. Hydroelectric power requires massive funds that are almost always public sector, and it's enormously successful (and profitable in many cases if you consider the net benefits). It's just conveniently ignored by those who decry "wasted" greentech money.

While the laws of physics are deterministic (at least at this scale), the laws of human behavior are not. Plenty of macro-scale activities have profound effects on our micro-scale behavior.

Many people are struggling to merely survive in this world - in fact, the vast majority of the global population is in that bind - and concern over how many hydrocarbons they're pumping into the environment is of zero to less-than-zero concern.

This is a very good point. But if Climate Change is real, the vast majority of the future global population's lives depend on us solving it. So we should be expending enormous resources to convince them that they should be concerned (or better yet, help lift them out of desperation).

Frankness != Sociapathy (0)

Anonymous Coward | about a year and a half ago | (#42207163)

But if Climate Change is real, the vast majority of the future global population's lives depend on us solving it. So we should be expending enormous resources to convince them that they should be concerned (or better yet, help lift them out of desperation).

I'm willing to say what no one seems to want to say out loud, even though they are all thinking it. Present sky is falling AGW claims and predictions of doom put the "cataclysms" and "high" sea levels out at least 100 years and more reasonable etsimates of 500 years. That's approximately 15 generations and 450 years after I'm dead.

I DON'T GIVE A FUCK WHAT HAPPENS IN 450 YEARS! I DON'T GIVE A FUCK WHAT HAPPENS TO THE 15TH GENERATION OF MY SPAWN!

For me, my children, my grandchildren, my great grandchildren and even their children, very little if anything is going to change. It won't feel significantly warmer and sea levels will only have risen a couple of inches, at most. I'm completely unwilling and uninterested in any form of self imposed taxation, inconvenience or suffering for the benefit of anyone 100 to 450 years after my death. FUCK EM!

There I said it.

Re:Having worked for a corporation that bet big on (0)

Anonymous Coward | about a year and a half ago | (#42207313)

"The science is the same regardless of the politics"

No, the TRUTH is the same regardless of the politics. Science != truth. It has been and always will be polluted with human assumptions, prejudices, self-interest, and deceit. Believing that the science you choose to accept == truth even though it is discredited time after time by whistle-blowers and it's reporting agencies continue to hide raw data isn't representative of truth. The truth has nothing to hide, but those climate change con men are hiding everything. Believing man-made climate change at the rates of Al Gore and the IPCC is qualification for a mental illness, or a most-gullible person of the millennium award.

You don't deserve and award or commendation for your elite thinking and all-caring heart. You deserve to be shamed for being so foolish and for proliferating such an obvious lie.

Re:Having worked for a corporation that bet big on (1)

rasmusbr (2186518) | about a year and a half ago | (#42206653)

When someone says greentech or cleantech or whatever cute word they like to use you know they're talking finance and/or PR and not technology or reality. The reality is that we're constantly inventing slightly better PV panels, batteries and fuel cells. I think it's obvious at this point that some of these products will eventually become competitive.

I think what's going to happen from a US point of view is that there is going to be a lot of money in buying these products in China and distributing them and installing them and turning them into easy to sell services in the US. It's easy (well... relatively speaking) to outsource production to Chinese factories, but it's currently not allowed to take Chinese workers onto US soil to do local work like construction work and maintenance so that has to be done in the US by US workers.

Debt load (1)

sjbe (173966) | about a year and a half ago | (#42205801)

How'd A123 fall so far, so fast?

Let's see: They have a ton of debt, a recall that cost them $55 million, and their biggest customer is Fisker who has a cool but expensive product that is selling slowly, and new customers are coming online slowly. Basically crushing debt, a big screw up and insufficient revenues. Pretty much the fastest way I know of to get to a bankruptcy filing. If a buyer gets them post bankruptcy they probably will have a pretty good business without the debt obligations.

moD Down (-1)

Anonymous Coward | about a year and a half ago | (#42205857)

fate. Let's not be has ground to a 4eople already; I'm mire of decay, it simple, which allows part of GNAA if bought the farmA... obsessed - give outstrips

Backwards Thinking (0)

Anonymous Coward | about a year and a half ago | (#42205953)

The truth is that any company that requires huge government grants and loans in order to be competitive was bankrupt from the start. This green energy crap is just the latest way for politicians to shovel money out of taxpayers pockets and into their friends bank accounts. For example, if our government really thought ethanol was such a great idea they would not be placing huge tariffs on South American ethanol and subsidizing US ethanol. That one policy is the largest contributor to the inflation of our food prices.

      Republicans and Democrats are exactly the same except for one minor difference: which lobbyist group has bought them.

Hardly Fisker's fault (1)

sunking2 (521698) | about a year and a half ago | (#42206005)

A $60M reduction in orders isn't what puts you out of business when you are a company with $900M in debt. You're doomed either way.

One word. (0)

Anonymous Coward | about a year and a half ago | (#42206043)

How'd A123 fall so far, so fast?

Greed.

Re:One word. (1)

HornWumpus (783565) | about a year and a half ago | (#42206693)

Greed got them that high in the first place. Reality got them to fall.

Well (2)

jameshofo (1454841) | about a year and a half ago | (#42206203)

From the story it looks like it could be tied to bad management, failing to do the due diligence and ensuring that the product was correct before you sold and shipped millions then trying to keep it under wraps? Seriously stand up and admit your wrong so you can fix them and survive to live another day.

Uhmm, YEAH ! (1)

Anonymous Coward | about a year and a half ago | (#42206969)

Thanks for your wisecracking. As a matter of fact, even the big, established corporations (from Boeing to Daimler) are challenged to "get products right". Even their financial resources are actually quite limited. They have dozens of R&D projects ongoing and each of these might easily eat 100 millions a year. Their senior management makes mistakes which cost dozens of billions, then comes a financial crash and finally, a "80% done" R&D project must be "completed in three months". Despite the fact that every competent person on the project knows at least 12 more months are required.

So what happens IN REALITY ? Rolls-Royce designs, builds and delivers and engine for the A380, which nearly kills 300 people. Because they could not be fucked to perform proper long-term testing. Daimler builds a highly efficient Diesel engine which dies at 100000km on average. The "fix" is to go with Bosch instead of Delphi (for the injection system) and shell out 500 million Euros. Some say it was 1000 million Euros. At that time Daimler again had the money to do that. When they started selling this motor, they didn't have the money for proper testing.

Boeing - they had a wildly optimistic plan about their 787. They were only 3.5 years late and they already have some new problems which can only burn down the plane. Just some fuel dripping...

Boy, these corporations are under enormous financial strain whenever they do non-trivial R&D, the stock market is full of cynical ignoramuses and the companies themselves are infested with naive, green-behind-ears M.B.A. toddllers who don't have the slightest clue of what can go wrong in engineering and development.

Some More On This (0)

Anonymous Coward | about a year and a half ago | (#42207317)

I do think a major problem with "modern" management is that they don't engage their experts (engineers, physicists, biologists or any other subject matter expert on payroll) in a serious and long-term dialogue. And of course they can't base their decisions on that dialogue that never happened.
Instead their make their decisions based on "what other people do", "how eloquently people argued", "which of the secret buzzwords were used". Management could learn a tremendous amount about their business if they listened to their own experts and asked *relevant* questions. Instead they indulge in all sorts of "soft skills" crapola and punish people for telling the truth.

Re:Uhmm, YEAH ! (1)

AwesomeMcgee (2437070) | about a year and a half ago | (#42207375)

..and at the end of the day, bad managers buckle to pressures and force out releases even when engineers guaranteed the product will have serious failures if released without more work. I've seen this in FDA regulated life support software (to be fair it wasn't actually supporting life, it was however supporting diagnoses and writing device prescriptions). This is just the common managerial bullcrap of "I know better than the engineers, they're just lowly payed employees, my MBA dictates I'm the important one here and know more than them!"

What exactly were the "technical problems"? (1)

tdelbruck (219068) | about a year and a half ago | (#42206509)

These news articles are usually (and this was no exception) short on the root of their woes in manufacturing. Is there any more info on that?

Re:What exactly were the "technical problems"? (1)

curtwoodward (2147628) | about a year and a half ago | (#42206617)

I was basing this on the court filings of A123 itself, and there wasn't detail about what the problems actually were. There may be more out there on the public record about what exactly the defects were. But A123 just said there were some problems with the "prismatic" batteries that could lead to problems. Sorry I couldn't get more precise.
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