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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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  • The Recovery and Investment Act was supposed to stimulate America's economy, not go to further prop up a regime with numerous humans rights violations. The last thing we need is more traffic because of these cheap batteries blowing up on the interstate.
    • by heck (609097) <deadaccount@nobodyhere.com> on Monday December 10, 2012 @12:48PM (#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.

  • by cvtan (752695) on Monday December 10, 2012 @11:42AM (#42243223)
    A123 had actual contracts to put batteries in cars and had actual products. Does this mean that electric car batteries are not expensive enough? This is pitiful.
    • Re: (Score:2, Informative)

      by Anonymous Coward

      their batteries had issues and had to be recalled.

      demand fell so the sales never materialized.

    • by operagost (62405)
      Fisker backed out. This can happen to any company-- some industries demand that you put in a lot of capital with only a few large customers and take on a lot of risk initially. But these are not the kind of companies that the US government should be subsidizing. The problem is that we have a lot of progressives who think just throwing a bunch of money at anything ensures success. Or maybe they know this, and think that throwing a bunch of money at a bad business is good evidence against capitalism.
  • by heck (609097) <deadaccount@nobodyhere.com> on Monday December 10, 2012 @11:43AM (#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)
    • Re: (Score:2, Informative)

      by Rockoon (1252108)

      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

      • by heck (609097)
        Sorry for the double posting all. Wrong funding. http://en.wikipedia.org/wiki/Advanced_Technology_Vehicles_Manufacturing_Loan_Program [wikipedia.org] [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] [wikipedia.org]
        • by Rockoon (1252108)
          You have the wrong funding, not me.

          When someone questions you, you should question yourself, and verify what you are saying. When you do that, you might not repeatedly make an error that could have been avoided the second time.

          The correct bill that provided this funding is in fact the American Recovery and Reinvestment Act of 2009. So says the White House. So says the energy department. So said Obama when he urged congress to pass the bill.
      • Please, if the Democrats had a bill to allow volunteers to help kids dying of cancer it wouldn't get bipartisan support from the Republicans... probably for some outrageous reason like "This endangers our right to pray in hospitals".

        The senate GOP filibustered THEIR OWN BILL last week because the democrats agreed to vote on it.

        • Please, if the Democrats had a bill to allow volunteers to help kids dying of cancer it wouldn't get bipartisan support from the Republicans... probably for some outrageous reason like "This endangers our right to pray in hospitals".

          Would it endanger the ability to pray in hospitals? If so, wtf, why would the dems make such a requirement a part of such an important bill?

          The senate GOP filibustered THEIR OWN BILL last week because the democrats agreed to vote on it.

          The republicans were making a point when they proposed the bill. They thought the bill was so outrageous that everyone would get the point that it was just stupid to even start down the path (giving the president unilateral control of the amount of debt that the US can incur). They assumed that there was no way the dems would actually vote for such a bill as it was obvi

          • by sjames (1099)

            You should see a good chiropractor. After such a desperate bending over backwards as you just did, misalignment is inevitable.

            • by gmhowell (26755)

              You should see a good chiropractor. After such a desperate bending over backwards as you just did, misalignment is inevitable.

              It's a shame Dr. Bob seems to be retired.

          • Occasionally as a parent I suggest something stupid to my kids when they are in "need" (really a want) something that we simply can't afford. I might make a suggestion like "why don't we sell our house for $20 so we can afford to order pizza tonight?" and I'm met with "Yay, pizza!" Then guess what happens, do you think I actually sell the house? Do you think even if some asshole at the gas station heard me say that and came running with a $20 bill that I'm going to sign over the house! No, I'm going to go

            • I appreciate and care immensely about your deep concern for my children and their well being. You get the sarcasm there? Let me lay it on a little thicker for you. I'm sure your parenting style is / was far superior. I care SOOO much about how you raised your children and how they turned out. Get it?

              I expect people to at least make an effort to think analytically... and regardless of your opinion of my parenting methodology (based on a snapshot in time no less) there is no doubt that my children know how
  • by jd.schmidt (919212) on Monday December 10, 2012 @12:12PM (#42243513)

    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.

    • by AmiMoJo (196126) *

      the Government has no special way of knowing who the winners will be over private investors and the dollars are less needed there anyway.

      That's the point. Investors never want to get in to risky new technology early on. They always wait for the government to put the money in by funding research at universities and in the military, until it reaches a commercially viable state. Unfortunately sometimes the government has to go as far as funding a company to get the tech that far, as is the case with EV batteries.

      The government will thus always appear to suck at investing because it naturally invests in things that are risky and many of them don

  • Xerox Parc (Score:4, Insightful)

    by benjfowler (239527) on Monday December 10, 2012 @12:12PM (#42243517)

    Xerox Parc were famous for innovating like hell, but being completely unable to monetize that innovation. Other people took their inventions and ran with them.

    The USA is doing this on a national level. America innovates -- China, buys or steals the IP, then destroys American business, and yet people whine about the lack of 'pure' free markets, as if the beggar-thy-neighbour, merchantilist Chinese are doing everything they can to destroy Western business.

    Time for people, especially the free market idealists to pull their heads out of their arses, and realise that the crypto-fascist Chinese Communist Party is waging a long, generational war against the West, and are hell bent on world domination.

    When competing with the Chinese, all options must be on the table. If that means we're not simon-sure free-marketers, so what? If the government puts up seed money to kick-start American national champions and the bet turns sour, so what?

    Ideological purity will get us nowhere at the end of the day. Only winning matters. Time to grow some balls, and learn how to fight as dirty as the Red Chinese.

    • Well, Xerox may not have benefited from Parc, but U.S. companies certainly did. If anything I would have used this to support the position that Parc like activities end up benefiting society in general and are big risks for companies but good activities for governments. I am sure some foreign companies benefited also, but there is no question being closer to the innovation (and speaking the same language) helps a society get more of the benefit.

      Were you around in the 70-80’s when Japan was going to

  • We would have saved USA farms, removed the ethanol subsidy, and had a home grown supply for the Colorado and Washington legalization demand. And we could have reduced the money spent imprisoning pot smokers, and dealt a serious blow to Mexico cartel gangs. Only one problem... we wouldn't have needed $250M in taxpayer funding, they could have accomplished all this success just by executive order, removing marijuana from DEA lists, legalizing it, taxing it, etc.

    I don't smoke marijuana (or haven't in decade

  • by Spoke (6112) on Monday December 10, 2012 @01:33PM (#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 Milgrams37 (2628411) on Monday December 10, 2012 @02:27PM (#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]

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