Biden praised stimulus-backed Ener1 one year before company went bankrupt

Josh Peterson Contributor
Font Size:

Vice President Joe Biden praised electric car battery manufacturer Ener1 — the highest Indiana recipient of federal stimulus money for the development of green automobile technology — for the expansion of its workforce on January 26, 2011. Ener1 filed for Chapter 11 bankruptcy on Thursday, exactly one year later.

The vice president, who spoke at Ener1’s factory in Indiana as part of a tour to tout President Obama’s 2011 State of the Union address, declared that the administration was “not just creating new jobs, but sparking whole new industries that will ensure our competitiveness for decades to come — industries like electric vehicle manufacturing.”

“Ener1, Inc. was awarded a $118.5 million grant from the Department of Energy — part of a $2.4 billion Recovery Act investment nationwide — to expand its production of advanced batteries for hybrid and electric vehicles,” Biden said.

“That grant is making it possible for Ener1 to expand its current manufacturing and assembly operation from 336 workers at its Indianapolis manufacturing and assembly facilities, to over a thousand by the start of 2013,” Biden continued. “In 2010 alone, Ener1 added 120 jobs at its Indianapolis plants.”

President Obama used his 2011 State of the Union address to declare a goal for the United States to be “the first country to have 1 million electric vehicles on the road by 2015,” lumping it together with South Korea-like Internet speeds and faster trains as part of what he called the nation’s “Sputnik moment.”

In a statement announcing the company’s bankruptcy, CEO Alex Sorokin said that the company’s business plan was crippled by insufficient consumer demand.

“We moved aggressively to reduce costs and shift focus when the marketplace did not evolve as quickly as anticipated.  Our business plan was impacted when demand for lithium-ion batteries slowed due to lower-than-expected adoption for electric passenger vehicles,” Sorokin wrote.

Under the company’s restructuring agreement, Ener1’s “operating subsidiaries do not plan to reduce employment levels as a direct result of the filing, although they will continue to monitor market conditions and make adjustments to the workforce as appropriate,” the company said.

Vice President Joe Biden mistakenly referred to now-bankrupt battery maker Ener1 as “Enron One” in his speech, which Republicans were quick to pounce on the day Ener1 filed bankruptcy. The House Energy and Commerce committee issued a statement Thursday that said Biden had invoked a “seemingly unintentional but ultimately prescient reference to the collapse of the energy giant Enron.”

Enron was an American energy company embroiled in scandal in 2001 that filed for bankruptcy.

“We may not now make battery power so cheap that only the rich can afford their cars on imported oil, but… but… Enron One leading the way, we’re certainly gonna come pretty close, because only that’s the objective, not a joke,” said Biden.

Obama, in his 2012 State of the Union speech, acknowledged, “Some technologies pan out; some companies fail.”

Florida Republican Rep. Cliff Stearns, chairman of the House Energy and Commerce Subcommittee on Oversight and Investigations, called the president’s remarks “prophetic,” saying that one bankruptcy “may be a fluke, two could be coincidence, but three is a trend.”

“Unfortunately, you can now add Ener1 to the growing list of failed companies that went belly up after hundreds of millions of dollars in administration backing. Sadly, the Department of Energy’s jobs record seems to grow worse by the day — first Solyndra, then Beacon Power, and now Ener1,” said Stearns in a statement Thursday.

The company was delisted from the NASDAQ in October  2011, after which the Department of Energy announced that it was “closely monitoring the status of the company.” The Energy Department, however, in a statement to the Daily Caller, defended Ener1, saying that its technology “has merit.”

“Our investigation continues, and we are working to ensure taxpayers never are never again stuck paying hundreds of millions of dollars because of the administration’s risky bets,” said Stearns.

Ener1 also held at one time a 31 percent share in Norwegian automaker Think Global, which filed for bankruptcy in June 2011.

At least one GOP presidential hopeful, on the other hand, would like to see America colonize the Moon.

Follow Josh on Twitter