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Summary:

Lithium-ion battery maker EnerDel once expected to generate 800 jobs and invest $184 million in an Indiana manufacturing plant — but no more. Although it has not disclosed revised numbers, the company has scaled back its plans for the new facility, according a county official quoted in local media […]

Lithium-ion battery maker EnerDel once expected to generate 800 jobs and invest $184 million in an Indiana manufacturing plant — but no more. Although it has not disclosed revised numbers, the company has scaled back its plans for the new facility, according a county official quoted in local media reports this morning.

Reining in the size of the project could mean saying good-bye to some of the $28 million in incentives proposed by local officials. EnerDel’s original plans for the new facility called for both manufacturing and assembly, and the company said last year that it had applied for low-interest federal loans to support the project.

It’s unclear at this point how big the cuts in EnerDel’s investment plans or projections for job creation may be, but the fact that the company is pulling back some of its ambitions at this point illustrates how elusive green jobs can be. That’s often not because of empty or misguided promises, but simply because it’s a long and bumpy road from laying out a best-case scenario plan during the fund raising stage to securing financing, building or retooling a facility, hiring workers (for both the plant construction and longer term manufacturing jobs) and finally firing up a factory.

Currently EnerDel, a subsidiary of Ener1, has two facilities in Indiana (a manufacturing plant in Indianapolis and an assembly plant in Noblesville). IndyStar.com reports today that the company is now seeking approval from Hancock county officials for special-use zoning to set up the new facility in an industrial business park in Mount Comfort. But various Indiana counties have been competing for more than four months to lure the new development and other sites still remain in the running.

At stake for these counties is the economic growth that could be spurred by potentially major federal support for EnerDel’s scheme. In the first week of January 2009, Ener1 announced plans to build a plant that could churn out batteries for up to 1.2 million vehicles by 2015, and also double the capacity at its Indianapolis plant to produce 600,000 battery packs per year by 2011 — if $480 million in government loans come through (Ener1 requested loans under the popular $25 billion Advanced Technology Vehicles Manufacturing program).

Ener1 CEO Charles Gassenheimer told us in an interview last year that the Department of Energy advanced the company’s $480 million loan application to the final evaluation stage around May. Noting that Ener1 is the only battery maker to “stand up a plant on shore,” Gassenheimer said that while he’s not banking on the DOE loans, “I cannot envision a scenario where government is not going to be part of our future.”

But while EnerDel snagged a $118.5 million grant that will go toward work at the Indianapolis plant under a separate DOE program — the green car loan program, through which many startups remain in a waiting game for the government’s shrinking pile of funds. Gassenheimer said in a November earnings call that he expected to announce federal loans “before the end of the year,” but that announcement has not been delivered.

Photo courtesy of EnerDel/Argonne National Laboratory

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By Josie Garthwaite

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  1. Sigmund Dorcester Monday, January 4, 2010

    (Please re-post this as a community service)
    Less than 20 car companies (The ATVM people say there were tons of applications but only a handful were car companies) applied for $25 BILLION DOLLARS in taxpayer money managed by a certain smug group of people at DOE in order to get loans to make green cars for Americans. This was not all of DOE that did bad things, just a private cadre of men.

    There was enough money to help every single one of the car companies that applied. The administrators applied their interpretations of the law in order to benefit the large lobby group-related firms and avoided every one of the “politically unconnected “independent American companies.

    The amount of lobby and influence money spent by each awardee is in direct ratio to the amount of money awarded. Pay-to-play was the process.

    The smaller companies, due to lower overhead, could have dramatically more productive results with the money than the large burdened companies yet the money was given out based on political career advantages for the administrators rather than the technology advantages for Americans.

    The way the ATVM people set it up (Google “Siry says stifles innovation” for more), the smaller applicants were prevented from getting outside investor funding.

    All of the people that reviewed the applications had political and financial connections to GM, Ford, Chrysler and the large Detroit recipients.

    Each of those smaller American companies had technology and resources that presented a powerful economic threat, if they got the loans, to the large politically connected companies that did receive funds. The big car companies wanted the small companies cut-out at all costs.

    The Section 136 law was written to provide first-come-first serve funding but when the small companies got their applications in first, while the big ones arrogantly felt that they did not even need to apply because it was already pre-staged for them, the ATVM officials changed the rules in order to remove the first-come-first-serve standard of the law in order to cut out the smaller independents.

    Some of the companies that have gotten money have backed out of making the electric cars they said they would make. But they still get to keep the money.

    The Section 136 Law was created by the lobbyists for GM, Ford & Chrysler when they saw that they were about to go bankrupt and wanted to tap into additional taxpayer dollars by claiming the money was going to be used for electric cars in order to win rapid support for Section 136 by tugging at heartstrings. In retrospect, the money mostly went to gasoline car projects. Multiple public hearings have already shown the sister loan guarantee program to have been a failed program via intentional delays, the head was fired and replaced & massive complaints have been filed by many.

    Some of the companies that got the money have already wasted more money than other companies applied for as their total request.

    Some of the companies that got taxpayer loan money are not even American companies and/or are doing their manufacturing offshore with non-American employees. Thus, the ATVM process has cost American’s jobs.

    Those who got the money had to fill out little, or no, paperwork, went through little, or no, review and were connected to the DOE people who gave them the money and shepherded them through the process. Those who they wanted to keep out were forced to jump through more hoops, were slow-tracked in review and had made no political deals via hired law and lobby firms that the big companies has used to conduit “influence”.

    The decision about who would get money was made in 2008 by a private group who then pretended there was a lengthy review throughout 2009 but in fact, the money was pre-wired for a select few.

    All of the things that the rejected small companies (who did not pay lobby fees) were rejected for, were the same things that the insider big companies were doing. In at least two cases, big companies who were in violation of Section 136 rules were guided by reviewer-insiders to change their whole business structure in order to become suddenly “compliant “with section 136 while smaller companies received no such “help”.

    How does this affect you? It cost you and your friends jobs, it delayed American innovation, it made your family have to breath toxic petroleum fumes for another decade, it furthered a corrupt practice and it hurt domestic small business. This was all about money. Controlling who got to make money off of the technology.

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  3. A lot of unsupported allegations here. I’m not sure what ‘community service interest’ was served by reposting the Dorcester comment. I don’t know if Think will get fed financing, but Karma has as well as well as Tessla, neither of whom are remotely tied to the ‘Big Three’. And if the Feds are giving away money without paperwork that would certainly be a man bites dog news story.

    I wonder if sour grapes can be effectively used to recharge anybody’s battery.

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