A news service for the people of Michigan from the Mackinac Center for Public Policy

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Job Numbers Vary Widely for Taxpayer Funded Electric Car Battery Maker A123 Systems

MEDC reported hundreds of jobs just prior to company's bankruptcy

Electric car battery maker A123 Systems was offered as much as $350 million in state and federal incentives in 2009 to help create jobs and make Michigan the regional leader in battery production.

Four years later, it's difficult to tell just how many jobs were created for the now bankrupt company.

For example, the Michigan Economic Development Corp. gave a report to state legislators in April that claims the company had 844 full-time employees at the Livonia battery plant as of Sept. 30, 2012.

That was just 16 days before A123 Systems filed for bankruptcy. The company now goes by B456 Systems as part of its bankruptcy agreement.

But the 844 employees also don’t add up to what the company reported to the federal government as part of the $249 million federal stimulus grant it received. For the quarter ending Sept. 30, 2012, A123 Systems reported having just 6.71 jobs paid for with stimulus funds.

The actual dynamics of how payroll was distributed and to how many employees is unclear to state and federal government officials.

Kathy Fagan, spokeswoman for the MEDC, said the jobs number for A123 Systems was taken directly from A123's payroll records.

"The feds may break out their numbers differently, but we don't have anything to do with that," Fagan said in an email.

A123 Systems reported it terminated all of its employees after filing for bankruptcy in October 2012 and selling its assets to the Chinese company, Wanxiang, in January 2013, according to a report filed with the U.S. Securities and Exchange Commission. 

State Rep. Tom McMillin, R-Rochester Hills, said in an email that he has looked into A123 Systems’ jobs numbers in the past.

“This is typical for central planning efforts — big press releases, millions taken from long-time tax paying businesses and given to a company that goes bankrupt," Rep. McMillin said.

James Hohman, fiscal policy analyst for the Mackinac Center for Public Policy, said what’s also troubling is how difficult it is to get reliable jobs data for projects that take hundreds of millions of taxpayer dollars.

Jeff Kessen, director of global marketing for A123 Systems, said he didn't know where the jobs numbers came from for the various reports so he couldn't comment on why they were so different.

(Editot's note: This story has been edited since its original posting to add comment from A123 Systems that was received after our original deadline.)

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See also:

A123 Logs Its Own List Of Failures

Michigan Home to Half of the Largest Bankrupt Green Energy Companies

A123 Files For Bankruptcy - Yet another failure of central planning

Bankrupt Solar Company Stimulus Money Missing From Federal Records

Stimulus-Backed Battery Company Employees With No Work To Do - Playing Cards, Watching Movies, Reading Magaziness

It's Not Easy Subsidizing Green

Rosy Solar Jobs Projections Fail To Live Up To the Hype

Sun Not Shining on State Solar Subsidies

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