Sunday, February 26, 2012
OOPS!!! Another attempt by government to stimulate economy fails...
by Joel Gehrke
A123 Systems, an electric car battery company once touted as a stimulus "success story" by former Gov. Jennifer Granhom, D-Mich., has laid off 125 employees since receiving $390 million in government subsidies -- but is still handing out big pay raises to company executives.
"[T]he company has laid off 125 employees and had a net loss of $172 million through the first three quarters of 2011," the Mackinac Center for Public Policy reports, observing that the company's primary customer, Fisker Automotive, is also struggling financially. "Yet, this month A123’s Compensation Committee approved a $30,000 raise for [Chief Financial Officer David] Prystash just days after Fisker Automotive announced the U.S. Energy Department had cut off what was left of its $528.7 million loan it had previously received."
This month has seen significant pay boosts for other A123 executives, as well:
Robert Johnson, vice president of the energy solutions group, got a 20.7 percent pay increase going from $331,250 to $400,000, while Jason Forcier, vice president of the automotive solutions group, saw his pay increase from $331,250 to $350,000. Prystash’s raise was 8.5 percent, going from $350,000 to $380,000.
"It looks like they are trying to pad their top people’s wallets in case something really bad happens," Paul Chesser, associate fellow for the National Legal & Policy Center, suggested.
The Department of Energy gave the battery company $249.1 million in grant money, while the Michigan government provided A123 with another $141 million in tax credits and subsidies, according to the Mackinac Center.