Chinese Firm Wins Bid For US-Backed Battery Maker 183
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."
Re:And? (Score:5, Insightful)
Free market my ass. This is corporatism. Allow the corporation to do what they want at all costs. There is no reason that the government should NOT be allowed to designate that funds it spends benefits its citizens over other people. EVERY OTHER country in the world does this.
Let the nitpicking and the corporate hothead flaming begin below....
Re:And? (Score:2, Insightful)
There isn't a free market on the global level. There pretty much isn't a legal free market in the US. You can keep cawing on about the free market but it doesn't make it true.
Re:And? (Score:5, Insightful)
This is the free market in action. Would you rather the White House block the sale?
I'd rather the White House not give them $250M in taxpayer money in the first place. How exactly was that free market in action?
Re:And? (Score:4, Insightful)
I'd like to say this is speculative investment, and I'd also rather my governmenet not use tax dollars to engage in such speculative investment at all.
But it is, in fact, crony capitalism, or worse, pure fraud.
No, wait, it's just fraud. We are being robbed.
Re:And? (Score:5, Insightful)
In a free market, a failing company would fail. In this case, the government took $249 million in tax dollars and gave it away. This is not the free market.
Re:And? (Score:5, Insightful)
Because that is not how they play this game.
Look at how they dumped solar cells as a great example.
Re:And? (Score:0, Insightful)
You should be more irritated that a handful of US citizens in the form of soon-to-be-paid creditors will absorb every penny of that as part of the bankruptcy proceedings, following the $256M sale. And those creditors are not stockholders, who will be left empty-handed.
China didn't get a $250M check from the US government -- a group of nameless American creditors did.
Re:And? (Score:4, Insightful)
The investment, made with it without an expectation of reimbursement, was nonetheless an investment. I assume it was made with the expectation of a successful venture, jobs and tax revenue, and development of a domestic battery manufacturer.
the failure began the question of whether there was a reasonable chance of success.
I expect my government to have such an expectation, but the market is a harsh place, and companies do fail.
I would prefer we do it differently.
Re:Only half of grant used (Score:5, Insightful)
Man, you put together an interesting argument, then I see the diarrhea oozing down your leg. When you make jackass sweeping generalizations, you need to be ignored until you learn to play better with others.
Goverment should not finance companies (Score:5, Insightful)
Public money is best spent on things private companies can't/won't do.
The best long term thing Government can do to help the country is finance research and education that form the building blocks for new companies. By comparison there are boat loads of investment dollars floating around in the private sector, the Government has no special way of knowing who the winners will be over private investors and the dollars are less needed there anyway. Financing companies is much riskier always, I guess I can see floating a loan to an established company in a crisis, but that is about it.
Republicans and, worse yet, Democrats both have become overly hypnotized with the power of "Private Enterprise". But people who run private companies are still just people. Better for Government to refocus on what is does well and assure plentiful funding for that. So if you really want to help produce electric cars, put out money for research at Universities and have open contracts for US manufacturers to sell the Government electric cars.
Comment removed (Score:4, Insightful)
Re:And? (Score:4, Insightful)
How can you be robbed of something you gave away?
Because in the constitution it said *nothing* about giving grants to US-based high tech battery manufacturers... therefore it is illegal for the federal government to do so (according to him). Pretty simple, really.
Re:And? (Score:5, Insightful)
I'd like to say this is speculative investment,
No it wasn't. It was a grant , not a loan, not an investment. That means the government just gave them the money with no requirement or expectation that it would be paid back.
Yes, but I'd like to think the gov't doesn't just give away money for the hell of it.
'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.'
That sounds like an expectation to me.
We are being robbed.
How can you be robbed of something you gave away?
Because I didn't give it away. Some group of assholes did. Most of whom I did not vote for.
Re:And? (Score:5, Insightful)
all the IP will go to the Chinese.
At least this time we got them to pay for it.
But who receives payment of the auction proceeds? I'm guessing it won't be the people who put up the $249 recovery funds.
Comment removed (Score:4, Insightful)
There is no "free market" (Score:4, Insightful)
Free markets are largely fictitious. They can only be maintained through heavy government intervention *cough* anti trust laws *cough* and require strong public infrastructure and an educated population. In short, there is not and never has been a "free market" except that which has been fostered and tended by a government relatively free of corruption. Without this government oversight, a "free market" quickly gets taken over by privately held monopolies that are then leveraged against other markets. The market then degrades into a highly capitalized form of fascism, as is happening now in the USA.
For example, even the USA at its height had much of its "private enterprise" industrial strength funded by public entities. here is an excellent example, makes for a fascinating read [theatlantic.com].
Re:And? (Score:5, Insightful)
This is not the free market.
First and foremost, what do you think a free market is?
Second, we haven't had *free markets for over 100 years and we don't want free markets.
Competitive markets are where the real growth is found and the only way to get competition is to restrain the worst impulses of the free market.
Third, this is what we have: https://en.wikipedia.org/wiki/Mixed_economy [wikipedia.org]
It's better than a completely free market.
*For all definitions of "free"
Re:And? (Score:5, Insightful)
So using tax dollars to lower the price of your products to drive competitors out of business is competition?
So what is your bar for cheating?
Re:And? (Score:4, Insightful)
You should be more irritated that a handful of US citizens in the form of soon-to-be-paid creditors will absorb every penny of that as part of the bankruptcy proceedings, following the $256M sale. And those creditors are not stockholders, who will be left empty-handed.
China didn't get a $250M check from the US government -- a group of nameless American creditors did.
And rightly so! Why should the owners of a failed company get to keep cash if there are still debts left unpaid?
Re:And? (Score:2, Insightful)
Because I didn't give it away. Some group of assholes did. Most of whom I did not vote for.
If it's any consolation, more than half of your fellow countrymen (based on voter participation) are OK with that "group of assholes".
If you look around and everyone else is an asshole, what does that suggest......
No, not really. Considering that somewhere around half of the population pays no taxes at all [howstuffworks.com]. I'm pretty much in the middle of middle class and do pay taxes. My wife has MS and cannot work, but I make enough that we don't feel it's right for her to apply for disability, even though she qualifies. If I look around and everyone else is looking for a handout and I'm not, does this make me an asshole? And no, I don't feel any animosity toward those that do either. However I do direct my ire toward the politicians that have been spending MY money (for the past 12 years especially). They are the true assholes IMO.
Re:Time to show some balls (Score:4, Insightful)
Americans should not have any bars when it comes to face a COMMUNIST country.
Hmmm... remind me what would you call the "bailout" that saved some American banks? Or the GM one [sodahead.com]?