A123 Systems Won't Get Rest of Federal Grant if Owned by Chinese Company
December 11, 2012 11:24 AM
comment(s) - last by
A123 could lose the rest of its $249 million grant
We can put this under the "Duh" files:
won't receive the remaining amount of its federal grant if Wanxiang Group is approved as the new owner.
, which spoke to an unnamed official from the U.S. Department of Energy (DOE), the DOE will cut A123 off from its $249 million grant the company received in 2009. A123 has only used $133 million of the grant so far.
The official, who noted that all parties were aware of this consequence during last weekend's auction of A123, said that the grant requires equipment and facilities funded by taxpayers to stay in the United States.
DOE also has the right to compensation if it doesn't approve of Wanxiang's purchase of A123. Wanxiang Group said it would respect the DOE's wishes, no matter the outcome.
Many have been very critical of
A123's purchase by a Chinese company
. Some concerns include the fact that taxpayer dollars were wasted on a grant for a company that is now in China's hands, and the fact that A123 has contracts with the U.S. Department of Defense (meaning, China could potentially get a hold of sensitive U.S. military information).
However, Wanxiang Group didn't purchase the government contracts with the DOD; Illinois-based Navitas Systems did for $2.25 million.
Chinese firm Waxniang Group won the auction for A123 Systems on Saturday for about $260 million. The sale is expected to be approved by the Delaware Bankruptcy Court today.
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. However, Johnson Controls clearly lost the bid to Wanxiang last weekend. If the sale for Wanxiang isn't approved, Johnson Controls said it would like to bid again.
Before October's bankruptcy filing, 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.
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Green Tech Complainers
1/10/2013 6:00:48 PM
All of you who like to moan about green companies and pool this company in along with it can silence yourselves. This isn't a wind farm or a solar farm or an alterative to any fuel, this is batteries. This is quite possibly the most integral part of all of our futures. It is nearly impossible to seamlessly transmit all the necessary energy that all of our devices, homes, vehicles, etc. use at any given moment. The battery is the only thing we have to store any of those alternative types of energy and reuse them in a standardized way across multiple applications. I don't have an opinion on the sale, because I really have no idea what it could mean for us in the US, but I do know that this company is definitely vital for our future, and their technologies are pretty awesome. I just wonder what will happen if they don't get sold. Shareholders will be tossed and Johnson Controls will reap the benefits.
"Death Is Very Likely The Single Best Invention Of Life" -- Steve Jobs
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