Alevo Update September 13

Today is the day before the Alevo SA general meeting in Switzerland. A lot hangs and the balance for me personally. I traded my patent rights in the elpipe and the ballistic breaker to Alevo in return for stock which was at the time worth $2 million in Alevo SA. Tomorrow it will be decided whether Alevo continues as a going concern or whether it declares bankruptcy in Switzerland. Alevo Manufacturing and Alevo Inc. have already declared bankruptcy in the USA. These are wholly owned subsidiaries of Alevo SA in Switzerland. Because some debts of Alevo Manufacturing contract back to Alevo SA, there is some doubt about whether Alevo SA will also go bankrupt. If that happens all my elpipe and ballistiic breaker patents will be auctioned off by the court.

Part of the background here is that the major shareholder of Alevo presently is Dimitri Ryobevlev, who put it in about $300 million to keep Alevo afloat when early projections about getting the factory working in 2015 (at the latest) proved to be overly optimistic. In fact I went on medical leave before Dimitri really took over, but from what I heard, the folks that Dimitri sent over to take charge of Alevo Manufacturing did a really good job in the beginning. They got rid of people who were not doing their jobs and I think that Alevo began to focus more on getting manufacturing to work right.

One of my big gripes with Alevo Manufacturing was the lack of an entrepreneurial mindset. I saw this from the standpoint of an observer, as my job was to develop ballistic breakers and elpipes; but within the walls of Alevo I was able to talk to battery people about their frustrations. I also made a number of recommendations on problematic polymer films in the battery, especially the cell wrap film. I am certain I was at the time the best polymer scientist in Alevo, and my proposed solution would have saved $2.50/cell on the bill of materials. None of my films were ever tested.

What Went Wrong at Alevo?

The biggest single mistake Jostein made was thinking that it would be easy to go from the lab to manufacturing batteries. Instead of setting up an entrepreneurial group of scientists, engineers, and techies working together to get that first production line working, Jostein instead installed an entire team of managers. The bureaucratic drag slowed progress in every imaginable way.

Alevo didn't think they were tackling a big technology challenge; if they had, they surely would have equipped the lab first rather than last. It should've been driven by engineers and creative people.  It was a terrible mistake to bring in in the top managers from Jostein's previous magnesium company (sometimes referred to the “Michigan Mafia” within Alevo).

There's a mindset that goes with a manufacturing business where technologies are all figured out. Magnesium die casting has minimal technology risk: it's mostly business risk. The founding management team were managing business risk, not technology risk.

The folks who started Alevo Manufacturing also got off on the wrong foot with the German research folks. This got better when Jostein hired Alan Greenshields (currently CTO), formerly CEO of Fortu (the battery company from which the Alevo battery technology came).  Alan was very much harmed in the takeover of Fortu by Alevo,  But since he has was hired he has worked tirelessly to get the manufacturing operation working properly.

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