Battery Maker A123 Systems Acquired by Chinese Firm for $260M
December 10, 2012 8:10 AM
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Congress isn't too sure about the outcome
finally has a new owner after its auction this past weekend, but Congress isn't too happy about the outcome.
Chinese firm Wanxiang Group won the auction for A123 Systems on Saturday for about $260 million. This has concerned certain members of Congress, who said that A123's contracts with the U.S. Department of Defense are at stake.
"I am very concerned by Wanxiang's acquisition of A123," said Rep. Bill Huizenga (R-Zeeland). "A123 maintains several contracts with the Department of Defense and given the thin line between Wanxiang and the Chinese Government, I am concerned about the Government of China having access to sensitive technologies being used by our military forces."
However, Wanxiang doesn't have full access to A123's technology. Part of A123 was also sold to Illinois-based Navitas Systems LLC, which will hold the DOD contracts for $2.2 million.
Back in mid-October,
A123 Systems officially filed for bankruptcy
and agreed to sell its automotive business assets to Johnson Controls -- a company that optimizes energy efficiencies in car batteries, buildings and electronics.
Before that, A123 was missing its loan payments. It had received $249.1 million in grants from the U.S. government in 2009 to develop green, electric car batteries. It was discovered that the U.S. government gave A123
a $1 million grant
the day it filed for bankruptcy.
A123 Systems suffered a huge kick earlier this year when it announced a $55 million battery replacement program for Fisker Automotive's Karma. The vehicle had issues with the batteries' hose clamps.
A123 Systems joins a list of other green companies that filed for bankruptcy after receiving government loans and grants. Back in September 2011, solar panel company
Solyndra filed for bankruptcy
after receiving a $535 million loan from the U.S. Department of Energy (DOE). In November,
(maker of flywheels for grid efficiency) filed after receiving a $43 million loan guarantee from DOE in 2010.
In January 2012, EV battery maker
Ener1 filed for bankruptcy
after its subsidiary, EnerDel, won a $118.5 million grant from DOE in 2009.
The U.S. Bankruptcy Court in Delaware will hold a hearing on the result of the A123 Systems auction on Tuesday, December 11.
The Detroit News
This article is over a month old, voting and posting comments is disabled
12/10/2012 9:11:42 AM
I can't hardly believe the government wouldn't have some sort of agreement, when companies receive these types of funds, with limitations surrounding the company's sale or acquisition for a certain timeframe; especially foreign acquisition. (OK, I can believe it because the government just wastes so damn much and no business acumen whatsoever, but it's ridiculous..)
12/10/2012 10:20:11 AM
Nothing about our current administration surprises me. What surprises me is that it appears that most of the country is still wearing blinders.
I saw a bumper sticker just yesterday that's quite appropriate. It reads:
"If your not outraged, then your not paying attention"
There are still so many hidden dangers ahead for this nation in the next four years. Everyone will eventually find out whether the are paying attention now or not. It will all surface in time.
I half expected the federal government to buy A123, but since were broke, it makes sense that the country we've borrowed over 1 Trillion dollars from would take advantage of our weakened financial situation. China is not foolish.
Best wishes on keeping afloat for the next four years.
12/10/2012 12:58:08 PM
not outraged, then you flunked Grammar 101"
"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer
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