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."
Only half of grant used (Score:5, Informative)
Re:How could they go out of business? (Score:2, Informative)
their batteries had issues and had to be recalled.
demand fell so the sales never materialized.
Re:And? (Score:4, Informative)
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.
Re:Only half of grant used (Score:2, Informative)
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.
Re:How could they go out of business? (Score:1, Informative)
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)
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. )
Re:This contract needs to be pulled immediately! (Score:5, Informative)
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)
Bzzt wrong.
Mod this idiot down please. The funding act he refers to is the wrong one.
A123 Horribly Mismanaged - Threw away $200M (Score:3, Informative)
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.
Re:the grants are to U.S. based manufacturers (Score:4, Informative)
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)
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.
Not Chinese Owned Yet (Score:5, Informative)
http://www.detroitnews.com/article/20121209/AUTO01/212090327/1148/rss25 [detroitnews.com]
Re:Time to show some balls (Score:5, Informative)
remind me what would you call the "bailout" that saved some American banks
Graft and corruption
Re:And? (Score:5, Informative)
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.