In the fall of 2010, the Michigan Economic Development Corp. — the state's "corporate welfare” arm — uploaded a video to YouTube highlighting the battery manufacturer A123 Systems.

At the time, the company was promoted heavily by President Barack Obama, U.S. Secretary of Energy Steven Chu, former Michigan Gov. Jennifer Granholm and U.S. Sens. Carl Levin and Debbie Stabenow. Since then, A123 has shed money, laid off half its workforce, recalled products and seen its stock price plummet to about 26 cents this week from a previous high of $26.

Now, just two years after the initial roll-out, A123 is being acquired by a Chinese company. Shortly after this deal was rumored a few weeks ago, the MEDC made all of its promotional videos “private.” This is not the first time questions have been raised about the MEDC’s lack of transparency.

The company is a poster child of government subsidies for green energy initiatives. Michigan gave A123 Systems $100 million in MEGA tax credits and another $41 million in tax breaks and subsidies from a separate program. At the same time, the Department of Energy awarded A123 Systems a $249.1 million grant as part of the federal "stimulus program."

The videos were previously covered by Michigan Capitol Confidential and referred to as “a playlist of crony capitalism failures.” Michigan Advantage, the MEDC’s (now defunct) YouTube channel, was intended to promote the success stories of Michigan companies that received state and federal dollars for their operations. The MEDC previously promoted dozens of companies, many of which have gone bankrupt or not delivered promised jobs while costing taxpayers hundreds of millions of dollars. The MEDC now has a new YouTube page, minus certain videos.

All of the videos made private by the MEDC were saved by Michigan Capitol Confidential. Below is the A123 Systems video.

From a previous CapCon story:

In the video, Gov. Granholm’s press conference on A123 Systems was interrupted by a phone call.

It was President Obama on the line to remind the audience that it was his American Recovery and Reinvestment Act that enabled A123 Systems to be the “first American factory to start high-volume production of advanced vehicle batteries.”

Secretary Chu said in the video that he hoped A123 Systems could create “thousands of jobs.”

“It really does make me feel really happy, proud that we are starting things, giving jobs, creating new jobs and hopefully the first 300 are just the beginning. Another 300 and another 300 …thousands of jobs," he said. "It’s going to be great.”

Sen. Levin predicted “thousands of jobs” by 2011. Gov. Granholm said it made Michigan the “advanced battery capital of North America.”

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See also:

Michigan Taxpayers Writing Check to Second Electric Car Battery Maker for $100 Million

Cost to Revive Economy With Battery Plant Subsidies: $5 Trillion

Video Shows President Obama, Top Politicians Praising Failed Green Company

Subsidized Green Energy Company Struggles, Lays Off Workers — Rewards Top Executives

(Editor’s Note: The following is excerpted and abridged from the text of a speech delivered by Michael LaFaive, director of the Morey Fiscal Policy Initiative for the Mackinac Center, to various groups around the state about the ballot proposals on the Nov. 6 ballot. We'll post one part each day this week explaining proposals 1 through 5.)

Proposal 1 on the ballot is a referendum to affirm or reject Public Act 4 of 2011. A "yes" vote keeps the law intact; a "no" vote nullifies it, reinstating the older emergency financial manager law.

The wording of this proposal — and thus whether to vote yes or no — is sowing the most confusion among all state ballot choices.

Public Act 4 is the emergency manager law. It permits the state to appoint managers to fix the finances of failed cities and school districts. The law grants more powers to EMs than did its predecessor, Public Act 72 of 1990. Among other powers, it gave EMs the power to tear up an unaffordable government union labor contract. In every case, these contracts were major contributors to the problems that made the EM law necessary.

This has made union bosses angry and frightened. In response, they backed a drive that put the law up for a popular vote.

Pontiac is one city where the new law appears to have worked. The EM there is Lou Schimmel, who has served as emergency financial manager for another city under the old law and also served as a court-appointed receiver for one city. Among the necessary changes in Pontiac that were made possible by PA 4?

• Pontiac contracted out its police force to Oakland County and saved $2 million annually while increasing enforcement personnel in the city;
• Pontiac contracted fire duties to Waterford Township and expects to save more than $3 million a year; and
• The city consolidated 87 city health care plans to one; saving $5 million annually while still offering very generous benefits at a cost of $20,000 per employee.

One of the raps against this law is that it is "anti-democratic," but that is misleading.

First, a democratic body — the state legislature — passed this law as a response to the fiscal irresponsibility of local units. It is used only in extraordinary cases and is the exception not the rule.

Second, local units are subject to state laws and rules, including the requirement to balance their budgets. Locals do not give the state its power — the reverse is true. Thus, the state has some responsibility for local management when fiscal emergencies arise.

What opponents of Proposal 4 would really seem to prefer are state taxpayer bailouts, which seem to be a non-starter with taxpayers.

Emergency managers have new powers to come in, fix the problem and leave. It will help Michigan's local governments meet the promises they make to residents, workers, vendors and bondholders.

To read more about the Nov. 6 ballot proposals. Please visit www.miballot2012.org.