In a bit of bad timing, A123 Systems, the advanced battery manufacturer which received one of the Energy Department’s stimulus grants to fund its operations, filed for Chapter 11 bankruptcy protection today, and will in all likelihood default on some debt. The battery maker did say that it would sell its automative facilities in Michigan to Johnson Controls in a $125 million deal.

A123 received a $249.1 million Energy Department grant in 2009, to build those battery facilities in Michigan (They only used around half of it, $132 million). A123 also got a grant from the Bush Administration back in 2007. They provided jobs in manufacturing for several years, and as the facilities will continue to operate. So what you really have here is a consolidation, as the Energy Department said today:

In an emerging industry, it’s very common to see some firms consolidate with others as the industry grows and matures. Accordingly, today Johnson Controls, a world leader in energy technologies based in Milwaukee, Wisconsin, has offered to purchase two Michigan manufacturing facilities built by A123 Systems, along with other assets in A123’s automotive battery business. As part of a bankruptcy filing today, A123 announced that it has obtained bridge financing from Johnson Controls to continue operation of its facilities.

A123, which has been building batteries for electric vehicles as well as for the nation’s power grid, quickly established itself as an innovative player in the market. Today’s news means that A123’s manufacturing facilities and technology will continue to be a vital part of America’s advanced battery industry.

Needless to say, this is not how the Romney campaign will spin it. They are prepared to denounce it as the product of green pork gone awry.

“A123’s bankruptcy is yet another failure for the President’s disastrous strategy of gambling away billions of taxpayer dollars on a strategy of government-led growth that simply does not work,” said Andrea Saul, a spokeswoman for Mitt Romney.

Republicans in Michigan supported the stimulus grants for A123 Systems in 2009, and again, it doesn’t appear that there’s anything going on here but one company buying out another one.

The threat of consolidation comes from the loss of innovation, but there are several battery-manufacturing entities in the United States, all of which are creating new technologies and jobs. As Marcy Wheeler writes:

So I hope when Mitt brings up the A123 bankruptcy tonight, Obama is at least prepared to call it what it is: capitalist consolidation just like the kind that Mitt has built his quarter billion fortune on. And this one is probably a net win for the US all around [...]

Say what you will about diminishing competition in a field where competition really serves innovation. But as far as stimulus dollars goes, this represents a consolidation. JCI–which received multiple energy grants itself, including for a battery factory in Holland, MI–has gotten expanded facilites at a discount. It will also benefit from the money the Chinese have invested in A123.

This probably ends up becoming too complex for a sound bite with the same force as “another Obama green stimulus bankruptcy.”