There was a while when President Obama was touring the country touting the green-tech companies he was backing through his stimulus and other subsidy programs, but this isn’t such a winning issue ever since the failure of Solyndra and other green subsidy-sucklers — most recently the bankruptcy of A123 Systems battery company.
A123 was politically active and connected, as any company dealing in subsidy-dependent green-tech has to be. The company lobbied up, hiring DC insiders. It got a slot on an Obama trade mission, and sent money to Obama’s campaigns, as John Solomon and Phillip Swartz report today at the Washington Guardian.
But A123′s lobbying spending and campaign contributions may have carried less clout than its investment from General Electric, the company which I describe as the for-profit arm of the Obama administration.
GE owns about 5 percent of A123 according to Bloomberg News, and they regularly touted this investment as part of their “Ecomagination” initiative.
The loss isn’t meaningful for GE, which reported $147 billion in revenue last year, but it does bring another dose of reality to GE’s “Ecomagination” initiative to develop environmentally friendly products and services. Earlier this year, GE halted construction on a solar panel plant in Colorado amid steep price declines. Meanwhile, GE expects wind orders to slow down after a federal tax credits expires at year’s end.
GE launched Ecomagination in 2005 as way to emphasize environmental performance among its products. Last year, GE generated $21 billion in revenue from sales of those products which includes everything from new generation gas turbines to highly efficient locomotives.
Most of Ecomagination was about chasing subsidies, which is one reason GE spends more than any other company on lobbying the federal government.
GE CEO Jeff Immelt has been a close Obama advisor, serving as Jobs Czar. Both inside and outside of Ecomagination, GE has hitched its pursuit of profit to many Obama policy initiatives — greenhouse-gas credits, embryonic stem-cell experimentation, high-speed rail, electric vehicles, wind power. The company’s league-leading lobbying army includes Linda Daschle, wife of Obama confidant Tom Daschle.
Of course, GE was also very dialed into the Bush administration, as the Washington Guardian points out, and as I pointed out after Bush’s 2007 State of the Union.
So I saw GE’s investment in A123 as similar to an investment by billionaire Obama fundraiser Warren Buffett: it doesn’t merely provide an influx of capital, it provides some political cover.
To the Obama administration’s credit, at some point, even “covered” companies are allowed to fail.