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March 8th, 2012
Charging up, or powering down? Crain’s Detroit Business looks at hiccups in the market for electric vehicles, and wonders whether Michigan’s many new battery plants will survive. Changing Gears has looked at this question before.
Re-reconsidering housing Partner station WBEZ says the city of Chicago spent 13 years revamping its public housing program. Now the new plan is being reconsidered because of tough economic times in the city.
Peoria pandering? Chicago mayor Rahm Emanuel promoted partnerships with Peoria during a visit yesterday. Emanuel says the frequent friction between his city and the rest of the state represent “the politics of the past,” according to the Peoria Journal Star.
Less college = less cost Looking for a solution to cut the cost of college? Indiana has an idea: Prohibit colleges from requiring more than 120 credit hours to get a degree. Gov. Mitch Daniels is expected to sign the restriction into law soon.
Minor detail A historic and beloved ferry based out of Ludington, Mich. may be forced to cancel its service, all because of a little arsenic, mercury and other chemicals it’s been dumping in Lake Michigan.
A Hail Mary pays off Partner station WCPN Ideastream reports that Catholics in NE Ohio appear to have won a rare victory. The Vatican has reversed its decision to close 13 churches in the area.
Dustin Dwyer · An Indiana Battery Maker Goes Bankrupt, Creating New Questions For A Growing Industry
January 31st, 2012
The name Ener1 may not be familiar to you.
But the company does have some of your money.
Indiana-based Ener1 is one of the major players in the new advanced battery economy that we reported on back in October. Advanced battery manufacturing has received well over a billion dollars in federal, state and local investment. The biggest chunk for Ener1 came in the form of a $118.5 million grant as part of the Obama administration’s stimulus program (the company was called EnerDel at the time).
Not surprisingly, Ener1′s bankruptcy has led to some vigorous finger-pointing in Washington.
But what will the bankruptcy mean for the battery industry in the Midwest, and the jobs it created?
The answer: Not much.
Back in October, when Changing Gears reported on the advanced battery industry, we talked to analyst Dave Hurst of Pike Research.
Today we called him back for a follow-up.
“They did not diversify fast enough to be able to survive,” Hurst says.
Ener1 says it will make it through bankruptcy with all of its divisions and jobs intact. The company says the bankruptcy process is more about restructuring debt obligations.
Still, Hurst says he doubts the company will remain viable in the automotive industry.
“It’s tough to see a strong business-model to be honest,” he says. “Basically they have to find a market that’s here now.”
The problem, Hurst says is the electric vehicle industry isn’t taking hold as quickly as people expected. Ener1′s CEO admitted as much in the press release that announced the bankruptcy.
Hurst says, if EnerDel is to survive, it’ll have to win business outside the auto industry, in things like energy storage for the electric grid or small batteries for power tools.
And he says Ener1 isn’t the only battery company that could be in trouble.
“Not all the ones that are out there now are going to survive,” Hurst says. “There’s just too much battery capacity for how many vehicles are coming.”
One of Ener1′s competitors, A123 Systems, laid off hundreds of workers in Michigan last year.
But ultimately Hurst believes these are just the growing pains of a new industry. There may be bankruptcies. There may be mergers and consolidations. But he says, battery manufacturing isn’t going away.
“As plants start to ramp up,” Hurst says, “You’re going to see a lot more growth.”