Status of batteries produced on lines 1 and 2: my understanding is that the company "pre-certified" line 2 in Italy, but only with the older material from 1994, not with the current material;
My understanding is further that since the line has been installed in Ireland some initial batteries with the new, current material have been run and are currently being tested by the company. My understanding is further that while these look good initially, the internal testing period will not be concluded until late September at the earliest, at which time, if successful, then product will be shipped to potential OEMs.
What has unnerved me a bit, as I stated in earlier posts, is that management as early as late June or early July drew product off line 1, which they thought was satisfactory product, but in fact failed the full cycle duration tests several weeks after production. I stated earlier that to me this increased the risk profile of the company in no small measure, since the company itself has felt or called the line one which resulted in substantially more difficulties than anticipated. As investors, we all thought that, though troubled, line 1 was finally "tweaked" into satisfactory condition. We always had the feeling that line 2 would be installed with less trouble - so in fact we had two horses on which to bet. Now, management's statements of confidence notwithstanding, we really have little reason to believe that line 1 will be ultimately fixed - certainly it's doubtful to me that it will be fixed in the next few weeks.
So we are essentially at this point betting the ranch on line 2. Now I expect that line 2 will eventually work - but if it doesn't, I'd sure be surprised if we all didn't have a stock below $ 5.00 until the production problems were settled.
And coupled with what may be a generally weak overall market over the next several weeks, I think the stock's bias will be downward until either production or an OEM is announced. |
