Friday, March 2, 2012

Leaves and Money Growing on Trees

The news on the green front gets worse each day. The laws of thermodynamics simply cannot be overcome by the Treasury of the United States and wealthy investors. The first casualty was the leading US solar PV company called First Solar. They were originally funded by the Walton family of Walmart fame. They produced terrible losses for the quarter and worst of all they have to replace many millions of dollars of poorly produced cells that were installed primarily in Europe a few years ago. Their technology does not use silicon or CIGS but uses cadmium telluride (CadTel). The debacle of the poorly fabricated cells could cost them a quarter of a billion dollars.

Another DOE funded PV company Abound Solar gave up on its production plans this week. This company also had thin film CadTel technology and was supposed to have a big manufacturing operation in Indiana. Abound was to receive $400 million of Chu Chu’s funding but thankfully only drew down $70 million. This makes Abound a minor league player in losing the Fed’s money. The good news about Abound is that they took BP Alternative Energy’s money as well as the company that brings oil to American shores was an equity investor. Perhaps Toxic Tony made the investment when he heard that Cadmium can be mighty toxic and Abound fit perfectly into BPs portfolio of being beyond petroleum. Abounds pitch to Chu Chu was that Cad Tel was the low cost path to PV cells and that First Solar would be sold out of capacity so the US needed a second player in Cad Tel PV technology. Of course the Chinese went wild with silicon based PV cells and Cad Tel got clobbered in the process.

OK enough about PV and the money lost in this industry. A 123 is now proposing a strategy to manufacture lithium ion batteries in a partnership with SAIC Motors in China under an increased collaboration. They will report losses approaching $80.5 million this quarter on revenues of $40.4 million and will write down their equity investment in Fisker by $11.6 million. But wait Chu Chu gave A 123 $249 million to build a plant in Michigan for high paying manufacturing jobs and now they will have closer collaboration and partnership with SAIC China’s leading automobile company. Tell me is Chu Chu completely off his tracks or is he a Chinese spy? But wait Justin Bieber turned 18 and received a Fisker Karma as a birthday gift from this manager and a friend. Yeah Lenny The Crapio and Just Born Bieber each now own Karmas that were built in Finland and needed $169.3 million of DOE money for US engineering. Fisker will likely not sell more than 1,000 Karmas before they go belly up so actually the US DOE gave the 18 year old singing wonder a $169,000 gift for his birthday which is more than the $100k his two buddies shelled out. Fisker is Al Gore’s child and like John Edwards, Alaric The Second will deny paternity of the baby. GM announced today they will temporarily close the Volt factory for 5 weeks and put over 1,300 workers on furlough while they work off excess inventory of 150 days of the wonder plug in. At least Volt sales were 1,023 units for the month of February far above the 478 Nissan Leaves that sold in the US last month. I wonder if a group of Japanese workers will suffer the same fate of being furloughed due to the buildup of Leaves on the ground. But wait it is spring and not fall and leaves like money from the DOE will grow on trees.

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