n" readability="105">Aug 9 (Reuters) - Early in 2012 President Barack Obama responded to critics of his multi-billion-dollar green technology initiative by saying he was "not going to cede the wind or the solar or the battery industry to China."

Six months later, he faces that very real possibility for the U.S. car battery industry, a once-high flying sector buttressed by generous federal grants, but struggling with a green car market that has fallen far short of expectations.

A123 Systems Inc on Wednesday became the second U.S. government-backed battery maker this year to go overseas for a lifeline - and it turned to China. Auto parts supplier Wanxiang Group will take a controlling interest and invest $450 million in the Massachusetts-based battery maker, which faced running out of cash by the year-end.

Earlier this year, Ener1 Inc, another battery maker that received a government green technology grant, emerged from Chapter 11 bankruptcy under the control of Russian investor Boris Zingarevich. New York-based Ener1 is also a joint-venture partner in China with a Wanxiang subsidiary.

In the past three years, U.S. battery makers, anticipating consumer demand for green cars that never materialized, have over built production capacity, often with government funding.

Electric vehicle and hybrid sales for the first seven months of the year totaled 270,000, representing only 3 percent of total U.S. car sales, according to the green-car website Hybridcars.com.

As part of the 2009 American Recovery and Reinvestment Act 's E lectric Drive Vehicle Battery and Component Manufacturing Initiative, A123 was awarded a grant of $249.1 million. Ener1 subsidiary EnerDel was awarded $118.5 million to manufacture advanced lithium-ion batteries for electric and hybrid vehicles.

A123 promised to create 38,000 U.S. jobs, including 5,900 at its own plants. A123 said on Thursday it has 1,300 workers.

Theodore O'Neill, a former equities analyst with Wunderlich Securities, said A123 "built a factory that's big enough to meet demand that's probably not going to materialize until 2020 ... They built it much larger than the market turned out to need."

FINDING 'PARTNER' FOR U.S. JOBS

That kind of underperformance provides new fodder for Obama's opponents in the Republican Party with just three months until election day.

Obama has spent months battling critics of the administration's green-tech initiative in the wake of the high-profile bankruptcy of solar-panel maker Solyndra.

"It's not going to be a smooth, easy ride ... Some companies will fail," he said in his State of the Union speech in January.

But tempering expectations has done little to quiet the critics in Washington, who ramped up their attacks on Thursday with the added accusation of putting technology in Chinese hands.

"Once again it appears the Department of Energy and the Obama administration have failed to secure sensitive taxpayer-funded intellectual property from being transferred to a foreign adversary, which raises serious national security issues," said Rep. Cliff Stearns. Stearns is a Florida Republican and chairman of the House Energy and Commerce Committee's Subcommittee on Oversight and Investigations.

A123 spokesman Dan Borgasano said on Thursday that, with Wanxiang's bid to take control of the battery company, "our intention is to continue to build in the United States and reach certain job levels. We think we found a partner to help us do that ... I don't think we'll necessarily be making hard and fast job projections."

After it received the DOE grant, Ener 1 said in early 2010 that it planned to create 1,400 jobs at its Indianapolis battery plant. Today, the plant employs around 250. The plant was designed to produce battery packs for up to 600,000 hybrid vehicles.

The companies' struggles with over capacity are typical of an industry whose fortunes are tied directly to those of electric and hybrid vehicle manufacturers.

"There was a bit of a rush to put in capacity that really wasn't justified by the events as they turned out," said Tom Gage, president of EV Grid, an infrastructure company based in Palo Alto, California. "In retrospect (the industry) was over-optimistic in terms of projecting the rate of growth for demand for car batteries."

Charles Ebinger, head of the energy security initiative at the Brookings Institution, said controversies surrounding government-backed companies such as A123 will make lawmakers hesitant to support expanded funding of clean energy, especially with federal budget battles looming.

"I think it's going to slow down," Ebinger said. "It's going to be increasingly difficult to argue for subsidies for any sector."

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Universal's effort to reboot one of its marquee franchises takes center stage this weekend as The Bourne Legacy opens five years after the previous installment.

Jay Roach's R-rated comedy The Campaign and David Frankel's dramedy Hope Springs also enter the fray, but all three new titles will have to compete with the 2012 Summer Olympics, which heads into its homestretch culminating with Sunday's Closing Ceremony.

PHOTOS: Behind the Scenes of THR's Jeremy Renner Cover Shoot

Sony's Hope Springs, starring Meryl Streep, Tommy Lee Jones and Steve Carell, bowed Wednesday and is predicting a modest five-day opening in the $16 million to $17 million range.

Bourne Legacy -- featuring Jeremy Renner as new leading man Aaron Cross -- is widely expected to wrest the weekend crown from The Dark Knight Rises, which has dominated the box office for three consecutive weekends.

Along with Renner, other newcomers to the Bourne franchise include Rachel Weisz and Edward Norton; returning actors include Albert Finney, Joan Allen and David Strathairn.

Tracking suggests Bourne Legacy will open in the $40 million range, a solid number considering the departure of franchise star Matt Damon and director Paul Greengrass. This time it's Bourne scribe Tony Gilroy in the director's chair.

COVER STORY: Jeremy Renner: $5 Million for 'Bourne,' Advice From Tom Cruise, Brutally Honest About Fame

Threequel The Bourne Ultimatum debuted to $69.3 million in August 2007, while sequel The Bourne Supremacy opened to $52.3 million in 2004. Franchise starter The Bourne Identity debuted to $27.1 million in 2002.

Gilroy, who also directed Duplicity and Michael Clayton, wrote or co-wrote the first three Bourne films and co-wrote Bourne Legacy with his brother Dan Gilroy.

Relativity Media partnered with Universal in financing the $125 million movie. Returning Bourne producers are Frank Marshall, Pat Crowley, Ben Smith and Jeffrey Weiner.

Bourne Legacy is opening in a number of foreign countries, many of them Asian markets.

Box-office observers expect Campaign, from Warner Bros., to open in the $22 million to $25 million range domestically.

PHOTOS: 'The Campaign' Premiere: Will Ferrell and Zach Galifianakis Celebrate Their Political Comedy

The pic, starring Will Ferrell and Zack Galifianakis and timed to the U.S. presidential and congressional elections, is incredibly raunchy and features two candidates vying to represent their North Carolina district on Capitol Hill.

Costing less than $60 million to produce, Campaign is showing good traction with moviegoers under age 35. Ferrell produced the pic with his partner Adam McKay, Galifianakis and Roach.

The comedy has a shot at beating fellow Warners title The Dark Knight Rises, which has grossed $367 million to date in North America, for the No. 2 spot at the domestic box office. 

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n">Aug 10 (Reuters) - International Business Machines Corp has considered buying Research In Motion's enterprise division, Bloomberg reported On Friday, citing two unnamed sources.

IBM made an informal approach for the enterprise business that operates the servers used for supporting BlackBerry email and messaging services, one of the sources said, according to Bloomberg. The report said no talks were currently underway.

Under the leadership of new chief executive, Thorsten Heins, RIM has hired bankers for a strategic review that could include a potential sale and partnerships for its technology.

The Bloomberg report said the BlackBerry maker has not yet received any offers for its phone business or for the whole company.

RIM virtually invented mobile email with its first BlackBerry devices more than a decade ago, but its market share has evaporated as consumers have flocked to Apple Inc's iPhone and devices based on Google Inc's Android system. RIM has lost over 70 percent in market capitalization in the last year alone.

RIM officials declined to comment to Reuters while IBM officials were not immediately available.

On Thursday, South Korea's Samsung Electronics Co said it has not considered acquiring RIM or licensing the embattled BlackBerry phone maker's new mobile operating system, despite an earlier report from an influential analyst floating the idea.

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Sony's sci-fi action epic Total Recall is in a close race with holdover The Dark Knight Rises at the Friday box office, with each pic on track to gross in the $9 million to $10.5 million range.

PHOTOS: 'Total Recall' Premiere

It's possible that Total Recall -- headlining Colin Farrell, Kate Beckinsale and Jessica Biel -- could win the Friday race and even cross $11 million, but most observers believe Dark Knight Rises will pull ahead on Saturday and stay atop the domestic box office for a third weekend in a row.

Total Recall, based both on the 1990 Paul Verhoeven film and the short story by Philip K. Dick, is expected to earn in the high-$20 million range for the weekend, while Dark Knight Rises is slotted to gross $31 million to $34 million. Some believe Total Recall also could cross $30 million, though.

The weekend's other new entry is Fox's family pic Diary of a Wimpy Kid: Dog Days. The threequel is expected to gross $6.5 million to $7.5 million on Friday for a weekend debut north of $17.5 million.

VIDEO: 'Total Recall' Star Jessica Biel Says 'There Was Nothing Girly' About Fight Scene with Kate Beckinsale

Research tracking firm NRG continues to advise studios that 20 percent of the moviegoing audience remains skittish about going to see a movie in the wake of the Aurora theater shooting during a midnight screening of Dark Knight Rises on July 20. And the London Olympics are proving a huge draw.

Christopher Nolan's Dark Knight Rises, from Warner Bros. and Legendary Pictures, has earned north of $600 million worldwide in its first two weeks, a massive number even though the film continues to pace behind its 2008 predecessor The Dark Knight.

Overseas, Universal's Ted is making headlines as it opens in another 10 markets, including Germany, where it grossed $1.2 million on Thursday to top the box office. And in the U.K., the R-rated comedy from writer-director Seth MacFarlane earned a stellar $5.3 million in its first two days of previews.

Ted has been rolling out slowly overseas, earning an impressive $54.5 million to date.

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People walk past a wall mural painted by Brazilian graffiti artists Os Gemeos in Boston August 8, 2012.

BOSTON | Wed Aug 8, 2012 10:52pm EDT

BOSTON (Reuters) - Like many famous works of art before it, a colorful mural that dominates a park across from Boston's main train station has stirred some controversy.

The 70-foot-by-70-foot (21-metre-by-21-metre) painting by Brazilian twin brothers Otavio and Gustafo Pandolfo, known as Os Gemeos, depicts a character wearing bright, mismatched clothes, his face wrapped in what appears to be a scarf except for his squinting eyes.

The work, which will be exhibited until November 2013, became a flashpoint when a local Fox television station quoted passersby criticizing the masked cartoon-like figure, which some found menacing, saying it should be removed.

The mural is painted on an air intake structure on the Greenway in downtown Boston's Dewey Square. The giant piece by Os Gemeos, which is Portuguese for "The Twins," is part of their first solo U.S. exhibition, now on display at the nearby Institute of Contemporary Art/Boston.

Jill Medvedow, director of the museum, played down the controversy. "This work of art is a joyful addition to Boston's skyline. With tremendous mastery of scale, painterly skill and vibrant patterning, Os Gemeos brings urban energy and a rich tradition of Brazilian creativity to Dewey Square in Boston. Good art gets people talking," she said.

Boston Mayor Thomas Menino also tried to defuse the issue.

"We don't need somebody out there to divide us and saying that's a racist thing, that's against a religion. It isn't," he said. "That was made to show a young boy out there and that's what I believe it is."

The mural was funded by the Institute of Contemporary art and private donations to the Rose Kennedy Greenway Conservancy, an organization that takes care of five of the city's parks including the one at Dewey Square.

Residents enjoying themselves on the Greenway on Wednesday, where the band Receita de Samba provided additional Brazilian flavor, mostly praised the work for its originality and beauty.

"It's nice," said Loreno St. Dubois, a 58-year-old postal employee from South Boston, who added that he could understand the negatives reactions to it.

Ben Gebo, 27, a freelance photographer hired by the conservancy to document the mural's creation, said as the piece was painted its meaning changed.

"I see it as an interesting artwork. I'm still not exactly sure what it's supposed to be," he said. "It's really up to the eye of the beholder. It definitely draws attention and gets people talking, which I think is the important thing."

(Reporting By Joseph O'Leary; editing by Ros Krasny and Patricia Reaney)

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TOKYO | Thu Aug 9, 2012 8:15pm EDT

TOKYO Aug 10 (Reuters) - Sharp Corp's leading bank creditors are likely to demand a more sweeping restructuring at the struggling Japanese TV and display maker as a condition for extending new loans, said people involved in the ongoing talks.

Sharp's two main lenders, Mizuho Corporate Bank and Bank of Tokyo-Mitsubishi UFJ (BTMU), are poring over the company's restructuring plan to determine how much it needs to survive as it also renegotiates terms of an investment by Taiwan's Hon Hai Precision Industry.

"Compared with Sony and Panasonic, Sharp's restructuring is not enough," said a senior banker at one of the two banks. "We will work out a plan by around mid-September to come up with a loan facility."

The banker and others involved in reviewing Sharp's business outlook declined to be named as those discussions are private. Spokespeople at both Mizuho and BTMU said their banks will support Sharp. A Sharp spokeswoman declined to comment.

The stakes are high for Sharp.

TOO FEW CUTS?

Shares in the century-old Osaka-based firm have slumped by around two-thirds since March, when Hon Hai, the world's leading contract electronics manufacturer and part of Foxconn Technology, agreed to buy around a 10 percent stake at 550 yen a share. As Sharp's condition has weakened - its shares last traded at 191 yen - Hon Hai has moved to renegotiate the March deal that would have seen it invest $844 million.

Last week, Sharp warned of a full-year net loss of 250 billion yen ($3.19 billion), eight times larger than its previous loss forecast. It is also cutting around 5,000 jobs, around a tenth of its workforce, as it battles weak demand for its Aquos TVs and competition from rivals led by South Korea's Samsung Electronics.

While the job cuts at Sharp are the first in six decades, some bankers question whether the restructuring is tough enough.

"The company has never done a restructuring before. It's like a wet mop. There's a lot of water that could be wrung out," said another senior banker at one of the main banks.

Hon Hai has said it is open to taking a larger stake in Sharp or renegotiating the share price of its planned investment. Both companies are suppliers to Apple Inc, and Hon Hai Chairman Terry Guo has said their partnership is an opportunity to challenge Samsung, Apple's main rival and one of its major suppliers.

At least one senior banker at one of Sharp's main banks did not rule out Hon Hai taking a larger share in Sharp that would give it board representation - though it's not yet known if any such proposal will emerge from the ongoing talks.

More immediately, Sharp faces a refinancing challenge.

In addition to the redemption of 200 billion yen ($2.6 billion) in convertible bonds due in September next year, Sharp has 360 billion yen ($4.59 billion) in short-term commercial paper. The cost of protecting Sharp's debt from default for five years has soared in the past month. Also, Markit data shows that 80.5 percent of Sharp shares available to be borrowed by short sellers betting on price falls were out on loan as of Tuesday, up from 75.6 percent the day before.

Mizuho Corp, part of Mizuho Financial Group, and BTMU, the core unit of Mitsubishi UFJ Financial Group, each have outstanding loans to Sharp of around 120 billion yen as of end-March, according to a creditor's memo seen by Reuters. Major life insurers also have extended loans to Sharp, including Nippon Life's 21.5 billion yen and Dai-ichi Life's 8.5 billion yen, according to the memo.

Officials at Sharp have contacted some life insurers recently, seeking meetings for a business review, said one person with knowledge of those talks.

MORE ENGAGED

The ongoing renegotiations between Sharp and Hon Hai make it tougher for Sharp's lenders as they don't know how much of the Taiwanese investment will materialise. Taiwan's Economics Ministry on Thursday pressed Hon Hai for more detail on the tie-up, saying the initial agreement looked expensive. Hon Hai needs ministry approval to inject cash into Sharp, a foreign company.

Sharp also has a reputation as a fiercely independent company and does not have as tight a relationship as other big Japanese firms with its main banks. That might not help in working on a turnaround plan, some bankers said.

Sharp, though, has become more engaged with its lenders, with its chairman Mikio Katayama meeting heads of BTMU and Mizuho in recent weeks, though the company has not yet disclosed all the data the banks are seeking, say people involved in the talks.

On top of deeper cost cuts, Sharp could look at additional asset sales, such as its solar panel and appliance units, bankers have said.

"Personally, I think it's fine for Hon Hai to take a 20-30 percent stake in Sharp. It would help Sharp's credit status," said a senior banker at one of the main banks.

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David Frankel's adult comedy-drama Hope Springs opened to $2.3 million at the domestic box office Wednesday, putting it on course for a modest five-day debut in the $15 million to $16 million range.

Hope Springs -- starring Meryl Streep, Tommy Lee Jones and Steve Carell -- opened at No. 2 behind The Dark Knight Rises, which grossed $3.7 million for a domestic cume of $367 million.

FILM REVIEW: Hope Springs

Reuniting Streep and Frankel for the first time since The Devil Wears Prada in 2006, Hope Springs is about an older couple who go to a couple's retreat. 

The film is tracking best among older women and couples. Studio insiders caution that the 2012 Summer Olympics are likely to distract older moviegoers but are confident that the film will have strong legs.

Hope Springs also could face some competition from Warner Bros.' comedy The Campaign, which opens Friday and stars Will Ferrell and Zach Galifianakis. Campaign is likely to play to a broader audience.

Sony acquired domestic rights to Hope Springs for roughly $15 million in partnership with MGM.

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1 of 6. Award-winning composer Marvin Hamlisch is shown in this publicity photo released to Reuters August 7, 2012. Hamlisch, who earned acclaim and popularity for dozens of motion picture scores including ''The Way We Were,'' has died in Los Angeles August 6, 2012 at the age of 68.

NEW YORK | Tue Aug 7, 2012 5:41pm EDT

NEW YORK (Reuters) - Marvin Hamlisch, the award-winning composer of "A Chorus Line" and "The Way We Were", has died suddenly at the age of 68, prompting warm tributes from Barbra Streisand, Liza Minnelli, former U.S. first lady Nancy Reagan and dozens of stage and screen stars.

Hamlisch, the musical force behind "The Sting" and numerous other movies and Broadway shows, died in Los Angeles on Monday, a family spokesman said. He collapsed following what was called "a brief illness". Details were not made public.

Streisand, a friend of 45 years and star of romantic movie "The Way We Were", said she was "devastated" at his death and recalled how he had played at her 1998 wedding.

"When I think of him now, it was his brilliantly quick mind, his generosity and delicious sense of humor that made him a delight to be around ... He was a true musical genius but above all that, he was a beautiful human being. I will truly miss him," she added in a statement.

Hamlisch, who was working until days before his death, earned the rare distinction of winning Emmy, Grammy, Oscar and Tony awards.

Minnelli said she had been friends with Hamlisch since the age of 13 and recalled he arranged her first and second albums.

"I have lost my first lifelong best friend, and sadly we have lost a splendid, splendid talent," the singer and actress said in a statement.

STARTED CAREER AS REHEARSAL PIANIST

In a 2010 interview Hamlisch told Broadway World that in writing "The Way We Were" he was trying to match "a very yin-yang sort of movie."

He explained: "I wanted to write something that was uplifting and positive; on the other hand, there is a tremendous amount of bitter-sweetness to that film - and bittersweet romance - so it's a real duality. And that's why I think the song - though it's in the major mode - is quite sad," he said.

The New York City-born composer, raised by Jewish parents and showing an early ability to mimic music as a young child, started out his professional career as a rehearsal pianist for "Funny Girl," beginning a long history of working with Streisand. He said Streisand "has the best voice there is".

His collaborations included musical director and arranger of Streisand's 1994 U.S. concert tour, for which he won two Emmy Awards, and writing the score for Streisand's 1996 film, "The Mirror has Two Faces," for which Hamlisch earned an Oscar nomination for Streisand's and Bryan Adams duet, "I've Finally Found Someone."

His other film scores included "Sophie's Choice" and "Ordinary People" and he co-wrote the ballad "Nobody Does It Better" for the 1977 James Bond film "The Spy Who Loved Me".

Nancy Reagan on Tuesday recalled Hamlisch as a frequent entertainer at White House parties in the 1980s, and how he wrote a 77th birthday song for her late husband, former U.S. President Ronald Reagan.

Hamlisch was "a dear friend and I am truly stunned by his death at such a young age ... I don't think you could ever find a more contemporary and talented musician," Reagan said in a statement.

Actress Debra Messing, star of the TV shows "Smash" and "Will & Grace", said on Twitter; "The GREAT Marvin Hamlisch passed away... What a loss. What a talent. What contributions."

Starting with 1969 film "The Swimmer," Hamlisch scored films for the next several decades, including Woody Allen's "Take the Money and Run" and "Bananas", "Save the Tiger," "Ice Castles," right up to Steven Soderbergh's "The Informant!" in 2009. He had recently been writing the score for a new Soderbergh movie based on the life of the pianist Liberace.

A CHORUS LINE

On Broadway, he won a Tony award and a Pulitzer Prize for the 1975 musical "A Chorus Line," which at the time became the most successful show on the Great White Way. He also wrote the scores for musicals "They're Playing Our Song," (1978), "The Goodbye Girl" (1993) and "Sweet Smell Of Success" (2002).

He also won four Grammy Awards including two for "The Way We Were."

Press representatives said he was scheduled to leave for Nashville later this week to see the Jerry Lewis stage-adapted comedy, "The Nutty Professor," for which he wrote the score. He had been working on a new Broadway musical called "Gotta Dance."

Hamlisch said he believed in the power of music to connect people.

"Music can make a difference. There is a global nature to music, which has the potential to bring all people together," he said on his website.

At the time of his death, he was principal pops conductor for several U.S. symphony orchestras and was scheduled to conduct the New York Philharmonic in this year's New Year's Eve concert. He is survived by his wife of 25 years, Terre.

Songwriters Alan and Marilyn Bergman, who wrote the lyrics for "The Way We Were" and worked with Hamlisch on many other projects, called him "our beloved friend. He was family. The world will miss his music, his humor, his genius. We will miss him every day for the rest of our lives."

(Editing by Jill Serjeant and James Dalgleish)

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Director Seth MacFarlane's raunchy comedy Ted jumped the $200 million mark at the domestic box office this weekend in addition to scoring stellar numbers in key foreign markets.

From Universal and Media Rights Capital, Ted has now earned $203.4 million in North America and will soon eclipse Wedding Crashers ($209.3 million) to become the No. 4 R-rated comedy of all time behind The Hangover ($277.3 million), The Hangover Part II ($254.8 million) and Beverly Hills Cop ($234.5 million).

Ted -- starring Mark Wahlberg and Mila Kunis, along with the MacFarlance-voiced teddy bear -- is rolling out slowly overseas. After enjoying big business, the comedy opened in another of other markets over the weekend for an early international total of $77.3 million.

The pic's worldwide gross of $280.7 million lands it on the top ten list of R-rated comedies globally.

The pic's international weekend gross was $32 million from 20 markets, including first-place finishes in the U.K., Germany, Russia, Austria Switzerland and Ukraine. 

Ted grossed $15.3 million from 508 screens in the U.K., the third-best showing ever for a Universal film behind the Bridge Jones sequel and King Kong. Germany turned in $7.4 million, the best debut of the year for a Universal title.

The film will roll out in an additional 38 territories over the next few months.

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Thu Aug 9, 2012 7:49pm EDT

n">Aug 9 (Reuters) - Early in 2012 President Barack Obama responded to critics of his multi-billion-dollar green technology initiative by saying he was "not going to cede the wind or the solar or the battery industry to China."

Six months later, he faces that very real possibility for the U.S. car battery industry, a once-high flying sector buttressed by generous federal grants, but struggling with a green car market that has fallen far short of expectations.

A123 Systems Inc on Wednesday became the second U.S. government-backed battery maker this year to go overseas for a lifeline - and it turned to China. Auto parts supplier Wanxiang Group will take a controlling interest and invest $450 million in the Massachusetts-based battery maker, which faced running out of cash by the year-end.

Earlier this year, Ener1 Inc, another battery maker that received a government green technology grant, emerged from Chapter 11 bankruptcy under the control of Russian investor Boris Zingarevich. New York-based Ener1 is also a joint-venture partner in China with a Wanxiang subsidiary.

In the past three years, U.S. battery makers, anticipating consumer demand for green cars that never materialized, have over built production capacity, often with government funding.

Electric vehicle and hybrid sales for the first seven months of the year totaled 270,000, representing only 3 percent of total U.S. car sales, according to the green-car website Hybridcars.com.

As part of the 2009 American Recovery and Reinvestment Act 's E lectric Drive Vehicle Battery and Component Manufacturing Initiative, A123 was awarded a grant of $249.1 million. Ener1 subsidiary EnerDel was awarded $118.5 million to manufacture advanced lithium-ion batteries for electric and hybrid vehicles.

A123 promised to create 38,000 U.S. jobs, including 5,900 at its own plants. A123 said on Thursday it has 1,300 workers.

Theodore O'Neill, a former equities analyst with Wunderlich Securities, said A123 "built a factory that's big enough to meet demand that's probably not going to materialize until 2020 ... They built it much larger than the market turned out to need."

FINDING 'PARTNER' FOR U.S. JOBS

That kind of underperformance provides new fodder for Obama's opponents in the Republican Party with just three months until election day.

Obama has spent months battling critics of the administration's green-tech initiative in the wake of the high-profile bankruptcy of solar-panel maker Solyndra.

"It's not going to be a smooth, easy ride ... Some companies will fail," he said in his State of the Union speech in January.

But tempering expectations has done little to quiet the critics in Washington, who ramped up their attacks on Thursday with the added accusation of putting technology in Chinese hands.

"Once again it appears the Department of Energy and the Obama administration have failed to secure sensitive taxpayer-funded intellectual property from being transferred to a foreign adversary, which raises serious national security issues," said Rep. Cliff Stearns. Stearns is a Florida Republican and chairman of the House Energy and Commerce Committee's Subcommittee on Oversight and Investigations.

A123 spokesman Dan Borgasano said on Thursday that, with Wanxiang's bid to take control of the battery company, "our intention is to continue to build in the United States and reach certain job levels. We think we found a partner to help us do that ... I don't think we'll necessarily be making hard and fast job projections."

After it received the DOE grant, Ener 1 said in early 2010 that it planned to create 1,400 jobs at its Indianapolis battery plant. Today, the plant employs around 250. The plant was designed to produce battery packs for up to 600,000 hybrid vehicles.

The companies' struggles with over capacity are typical of an industry whose fortunes are tied directly to those of electric and hybrid vehicle manufacturers.

"There was a bit of a rush to put in capacity that really wasn't justified by the events as they turned out," said Tom Gage, president of EV Grid, an infrastructure company based in Palo Alto, California. "In retrospect (the industry) was over-optimistic in terms of projecting the rate of growth for demand for car batteries."

Charles Ebinger, head of the energy security initiative at the Brookings Institution, said controversies surrounding government-backed companies such as A123 will make lawmakers hesitant to support expanded funding of clean energy, especially with federal budget battles looming.

"I think it's going to slow down," Ebinger said. "It's going to be increasingly difficult to argue for subsidies for any sector."

View the original article here