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Chinese Firm Wins Bid For US-Backed Battery Maker 183

Posted by samzenpus
from the best-laid-plans dept.
theodp writes "On September 13, 2010, President Obama called A123 Systems from the Oval Office to congratulate them on opening the nation's first manufacturing facility to mass-produce electric vehicle batteries, which the White House noted was made possible by a $249 million Recovery Act grant the company received the prior August. 'When folks lift up their hoods on the cars of the future,' the President said, 'I want them to see engines and batteries that are stamped: Made in America. And that's what you guys are helping to make happen.' But on Saturday, the assets of A123 Systems were auctioned off to the Wanxiang Group, a large Chinese auto parts maker. Wanxiang agreed to pay $256 million for A123's automotive and commercial operations, including its three factories in the United States. Forbes reports that A123's stock, which closed at 7 cents a share on Friday, is now worthless."
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Chinese Firm Wins Bid For US-Backed Battery Maker

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  • by heck (609097) <deadaccount@nobodyhere.com> on Monday December 10, 2012 @12:43PM (#42243229)
    As of 2012 $129 million of the grant was used to build plants in Michigan (Romulus and Livonia); the remaining grant money has not been tapped (the grant was extended to 2014, but with the company in bankruptcy...) Originally Johnson Controls was going to buy (and use) the plants; it is still unknown if the plants will be used, but speculation is that at least one of the plants will be used. Note that the grants were backed by all of the Michigan members of Congress, despite the party. All of them wrote letters of endorsement to the DOE. The loan program that issued the grants was created in fall of 2008. The loan program predates Obama's presidency; the company applied in January and Obama because president January 2009. Please don't make this a partisan thread. This is what looked like a promising company that had a market in 2009 and needed to build manufacturing capacity - and the market disappeared (Chrysler closing its EV division was the major hit)
  • by Anonymous Coward on Monday December 10, 2012 @12:49PM (#42243301)

    their batteries had issues and had to be recalled.

    demand fell so the sales never materialized.

  • Re:And? (Score:4, Informative)

    by Rockoon (1252108) on Monday December 10, 2012 @01:02PM (#42243425)

    The Republican politicians who voted for the energy policy act of 2007 were for sale. And like any good investment, they paid off, leaving somebody else to hold the bill.

    Lets take a look at the Senate roll call on the bill that actually gave them this money, the American Recovery and Reinvestment Act of 2009:

    Democrats - 55 yeas - 0 nays
    Republicans - 3 yeas - 38 nays
    Independents - 2 yeas - 0 nays (one is an "Independent Democrat")

    Now lets take a look at the House roll call on this bill:

    Democrats - 244 yeas - 11 nays
    Republicans - 0 yeas - 177 nays

    Yet again the Democrats blame the Republicans for what the Democrats did all by themselves.

  • by Rockoon (1252108) on Monday December 10, 2012 @01:09PM (#42243479)

    Please don't make this a partisan thread.

    Lets take a look at the Senate roll call on the bill that actually gave them this money, the American Recovery and Reinvestment Act of 2009:

    Democrats - 55 yeas - 0 nays
    Republicans - 3 yeas - 38 nays
    Independents - 2 yeas - 0 nays (one is an "Independent Democrat")

    Now lets take a look at the House roll call on this bill:

    Democrats - 244 yeas - 11 nays
    Republicans - 0 yeas - 177 nays

    Now, please explain why you dont want this to be a partisan issue.. it became a partisan issue when the Democrats rammed it through both houses of congress without bipartisan support.

  • by Anonymous Coward on Monday December 10, 2012 @01:14PM (#42243543)

    Yeah, damn all those progressives who passed the Clean Energy Act of 2007 through a divided Congress, and damn that progressive George W. Bush for signing it into law. And don't forget that those very same progressives passed the ATVM in 2008 -- not to be confused with all that progressive money they threw at failing industries with TARP.

    Nothing like facts to grind freeper bandwagons to a screeching halt.

  • Re:And? (Score:4, Informative)

    by heck (609097) <deadaccount@nobodyhere.com> on Monday December 10, 2012 @01:34PM (#42243719)

    Lets take a look at the Senate roll call on the bill that actually gave them this money, the American Recovery and Reinvestment Act of 2009:

    Wrong funding. http://en.wikipedia.org/wiki/Advanced_Technology_Vehicles_Manufacturing_Loan_Program [wikipedia.org] (passed in fall of 2008) which was part of http://en.wikipedia.org/wiki/Energy_Independence_and_Security_Act_of_2007 [wikipedia.org] Have a wonderful day. (If you had read my post, you would have caught the "program from 2008" and realized you had the wrong funding. )

  • by heck (609097) <deadaccount@nobodyhere.com> on Monday December 10, 2012 @01:48PM (#42243847)
    Except that it wasn't a grant from the RIA, it was a grant under http://en.wikipedia.org/wiki/Advanced_Technology_Vehicles_Manufacturing_Loan_Program [wikipedia.org] (passed in fall of 2008) which was part of http://en.wikipedia.org/wiki/Energy_Independence_and_Security_Act_of_2007 [wikipedia.org].

    And the company actually had customers and contracts, but needed money to build manufacturing capacity (hence the grants). Then they had quality issues, plus Chrysler closed down its Electronic Vehicle division, and hence the bankruptcy. Of the 123 million that was actually spent, there are very large physical assets sitting in Michigan which may still be used (to, you know, employ people). The remaining 100 million was never "given" by the government to anyway; its still sitting in an approved grant account controlled by the US government. I now return you to your ranting.

  • Re:And? (Score:2, Informative)

    by h4rr4r (612664) on Monday December 10, 2012 @01:51PM (#42243883)

    Bzzt wrong.

    Mod this idiot down please. The funding act he refers to is the wrong one.

  • by Spoke (6112) on Monday December 10, 2012 @02:33PM (#42244321)

    I am really horribly surprised that this isn't mentioned more.

    Just 4 months ago Wanxiang offered $450M for 80% of A123. Now Wanxiang got it for $260M. A123 lost it's creditors quite a large chunk of money and now Wanxiang gets control of A123 debt free.

    http://insideevs.com/wanxiang-takes-control-of-a123-again-as-it-wins-bankruptcy-auction/ [insideevs.com]

    A123 has been horribly mismanaged from the start. People have been clamoring for their cells for years - but they wouldn't sell to anyone but OEMs - so many people took to disassembling packs from drills or more recently buying them off the grey market (eBay).

    Their batteries are very good, but they have been plagued by bad business decisions and some bad luck (like the big batch of defective cells they sold to Fiskar costing $55M to replace).

    I would have rather seen A123 tech been bought by JCI rather than Wanxiang - I can only hope that they are able to sort out A123s problems and finally get their product to market successfully.

  • by Anonymous Coward on Monday December 10, 2012 @02:34PM (#42244337)

    You should really read further. Less than half the money was spent, and their sustainable product's sole client pulled out after demanding highly-specialized retooling, rendering their product line worthless without another infusion of cash. The owners have decided to cut their losses and have been in bankruptcy for some time now -- the sale is pending bankruptcy court approval. Outstanding creditors will be repaid out of the $256M sale price, but the US taxpayers (who provided a grant), and the stockholders (who have no recourse), will be left empty-handed. The owners are very likely personally out a very large sum of money, as outstanding creditors will soak up all of the liquid assets, including US grant money, once the sale is complete.

    On the upside, as stated, at least taxpayers are not out the entire tab.

  • Re:And? (Score:4, Informative)

    by Orne (144925) on Monday December 10, 2012 @02:59PM (#42244563) Homepage

    I think you forgot that the Democrats have controlled the Senate from Jan 2007-Present, and the House from Jan 2007-2010. They were in control of the committees and budgets during the financial collapse of 2008, and steered all of the "bailout" money. Technically everything leading up, causing, and continuing the recession was approved by the Democrats.

    But, the public is apparently ok with all of the spending. They voted for it, and re-elected the same people, so what can you do.

  • by Milgrams37 (2628411) on Monday December 10, 2012 @03:27PM (#42244817)
    Wanxiang has submitted the highest bid, but it has not been approved by the bankruptcy courts. There are a number of senators who are trying to have the buyout blocked because of A123's relationship with the Dept. of Defense. So while it's looking like our tech is heading East, it's not a forgone conclusion.

    http://www.detroitnews.com/article/20121209/AUTO01/212090327/1148/rss25 [detroitnews.com]
  • by Shotgun (30919) on Monday December 10, 2012 @04:19PM (#42245397)

    remind me what would you call the "bailout" that saved some American banks

    Graft and corruption

  • Re:And? (Score:5, Informative)

    by Beezlebub33 (1220368) on Monday December 10, 2012 @04:52PM (#42245755)

    No, not really. Considering that somewhere around half of the population pays no taxes at all [howstuffworks.com].

    The above statement is simply false. The article that you quote says as much, pointing out that not paying income tax is not the same as not paying any taxes. People with low income pay SS and Medicare taxes, state and local taxes, personal property tax, and sales tax. The total tax burden on low income people is substantial.

    The reason that low income people do not pay federal income tax is that they are making so little money, and when you add in exemptions, credits, deductions, etc, they are not supposed to pay anything. Retired people, veterans, handicapped people with MS, students, unemployed people don't make enough to justify any taxes as they are written. We can argue about whether those exemptions, deductions, and credits are justifiable. A better idea would be to make sure that they make enough that taxes are justified.

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