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OBAMA'S DOE SUPPORTS FRAUD....
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AGAINST SOCIALISM
May 19, 2012, 12:07:56 PM5/19/12
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Looks Like Subsidized A123 Execs Want to Cash In
Submitted by Paul Chesser on Fri, 05/18/2012 - 09:09
National Legal and Policy Center
As taxpayer-backed electric car battery-maker A123 Systems reported a
$125 million 1st quarter loss this week and its stock price dipped to
near its 52-week low, the executives that were just awarded big raises
and parachutes look like they want to cash in and sell the company.
Officials with the Massachusetts-based manufacturer, which received a
$249.1 million grant from the Department of Energy but this week said
the ability for the company to continue is a “going concern,” also
announced they retained an outside adviser for “evaluation of
strategic alternatives.” Translation: they’re looking to sell. If they
are successful, A123 President David Vieau and his colleagues stand to
reap a windfall even after they laid off 125 factory workers ("Green
jobs") in November.
The move follows the actions its directors took in February, after
Fisker Automotive – A123’s top customer and a company in which it was
invested – announced that DOE had cut off its $529 million loan award.
A day after A123’s stock dropped from $2.65 to $2.285, the company’s
compensation committee bumped the base salaries of two vice presidents
and its CFO by an average of 36 percent. Also in that February
compensation meeting, Vieau received 400,000 additional restricted
stock units while four other top A123 executives collectively received
810,000 additional stock units. Perhaps most significantly, the
remuneration terms of its top officers were increased should control
of the company change hands, which included: accelerated vesting of
unvested stock option and restricted stock awards; increase in payment
of base salary from 12 months to 18 months; payout of target bonuses
for the year if terminated; and an increase in continuation of
benefits from 12 months to 18 months.
Since then A123 reported huge losses for 2011 and its shares dipped as
low as 82 cents – it closed yesterday at 88 cents. Investors have
filed a class-action lawsuit claiming that A123 executives
inadequately disclosed information about two recalls of its batteries
and related warranty payments of $55 million for fixes. An incident in
which Consumer Reports’ testing of a Fisker Karma with a flawed A123
battery, which caused the vehicle to shut down, drew widespread scorn.
In another accident, an A123 battery caused an explosion at a General
Motors test facility.
Besides the $249.1 million DOE grant, A123 received nearly $30 million
for a wind energy storage project as a subcontractor for another
federal grantee. Also, A123’s batteries were used as part of a $5
million DOE stimulus project with Detroit Edison Company. A123 also
received grants and tax credits from the State of Michigan – where it
established its two manufacturing plants – that could total more than
$135 million.
Recently A123 reported its first-quarter woes to DOE, in the best
bureaucratic lingo it could muster: “Manufacturing activities were
impacted as process improvement efforts attempted to remedy
operational challenges and quality assurance issues. As a result of
these activities and weakening market demand production levels were
negatively impacted.” A day after the executives’ compensation boost,
Forbes wondered if A123 and Fisker would become “Two Solyndras for the
Price of One.” And Theodore O’Neill of Wunderlich Securities wrote in
a February research article that A123 faced “a doomsday” scenario.
With the latest move to seek “strategic” advice, the self-serving
overpaid mis-managers at A123 may soon get a hefty payout just to go
away. In the meantime the company is trying to raise $50 million from
private sources and is trying to find another lender with fewer
limitations on a line of credit than what they currently have,
according to the Wall Street Journal.
“Saying that they’re willing to look at all options may give investors
something different to think about,” Amir Rozwadowski, an analyst at
Barclays Plc in New York, told Bloomberg. “The announcement may be
shifting the conversation to ‘what is the inherent value of this
company’s assets?’”
Anybody who overpays for this phony “technology of the future” company
will get what they deserve, but unfortunately current management and
taxpayers won’t.
Paul Chesser is an associate fellow for the National Legal and Policy
Center.
http://www.truthandgrace.com/muslimobama.htm
Submitted by Paul Chesser on Fri, 05/18/2012 - 09:09
National Legal and Policy Center
As taxpayer-backed electric car battery-maker A123 Systems reported a
$125 million 1st quarter loss this week and its stock price dipped to
near its 52-week low, the executives that were just awarded big raises
and parachutes look like they want to cash in and sell the company.
Officials with the Massachusetts-based manufacturer, which received a
$249.1 million grant from the Department of Energy but this week said
the ability for the company to continue is a “going concern,” also
announced they retained an outside adviser for “evaluation of
strategic alternatives.” Translation: they’re looking to sell. If they
are successful, A123 President David Vieau and his colleagues stand to
reap a windfall even after they laid off 125 factory workers ("Green
jobs") in November.
The move follows the actions its directors took in February, after
Fisker Automotive – A123’s top customer and a company in which it was
invested – announced that DOE had cut off its $529 million loan award.
A day after A123’s stock dropped from $2.65 to $2.285, the company’s
compensation committee bumped the base salaries of two vice presidents
and its CFO by an average of 36 percent. Also in that February
compensation meeting, Vieau received 400,000 additional restricted
stock units while four other top A123 executives collectively received
810,000 additional stock units. Perhaps most significantly, the
remuneration terms of its top officers were increased should control
of the company change hands, which included: accelerated vesting of
unvested stock option and restricted stock awards; increase in payment
of base salary from 12 months to 18 months; payout of target bonuses
for the year if terminated; and an increase in continuation of
benefits from 12 months to 18 months.
Since then A123 reported huge losses for 2011 and its shares dipped as
low as 82 cents – it closed yesterday at 88 cents. Investors have
filed a class-action lawsuit claiming that A123 executives
inadequately disclosed information about two recalls of its batteries
and related warranty payments of $55 million for fixes. An incident in
which Consumer Reports’ testing of a Fisker Karma with a flawed A123
battery, which caused the vehicle to shut down, drew widespread scorn.
In another accident, an A123 battery caused an explosion at a General
Motors test facility.
Besides the $249.1 million DOE grant, A123 received nearly $30 million
for a wind energy storage project as a subcontractor for another
federal grantee. Also, A123’s batteries were used as part of a $5
million DOE stimulus project with Detroit Edison Company. A123 also
received grants and tax credits from the State of Michigan – where it
established its two manufacturing plants – that could total more than
$135 million.
Recently A123 reported its first-quarter woes to DOE, in the best
bureaucratic lingo it could muster: “Manufacturing activities were
impacted as process improvement efforts attempted to remedy
operational challenges and quality assurance issues. As a result of
these activities and weakening market demand production levels were
negatively impacted.” A day after the executives’ compensation boost,
Forbes wondered if A123 and Fisker would become “Two Solyndras for the
Price of One.” And Theodore O’Neill of Wunderlich Securities wrote in
a February research article that A123 faced “a doomsday” scenario.
With the latest move to seek “strategic” advice, the self-serving
overpaid mis-managers at A123 may soon get a hefty payout just to go
away. In the meantime the company is trying to raise $50 million from
private sources and is trying to find another lender with fewer
limitations on a line of credit than what they currently have,
according to the Wall Street Journal.
“Saying that they’re willing to look at all options may give investors
something different to think about,” Amir Rozwadowski, an analyst at
Barclays Plc in New York, told Bloomberg. “The announcement may be
shifting the conversation to ‘what is the inherent value of this
company’s assets?’”
Anybody who overpays for this phony “technology of the future” company
will get what they deserve, but unfortunately current management and
taxpayers won’t.
Paul Chesser is an associate fellow for the National Legal and Policy
Center.
http://www.truthandgrace.com/muslimobama.htm
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