By on October 17, 2012

When we reported that battery maker A123 had filed for bankruptcy, a lot of people thought that Johnson Controls is in control, and that Chinese Wanxiang is out. No and no, writes Reuters star car reporter Norihiko Shirouzu. Wanxiang still wants A123, and Johnson Controls is just one bidder in a Chapter 11 process, says Reuters.

China’s Wanxing had offered $465 million for all of A123. A123  agreed to sell its automotive operations, including two factories in Michigan, for $125 million to Johnson Controls. That “deal could be countered by other offers that would be more beneficial to A123′s creditors,” Jefferies analyst Peter Nesvold said in a research note. “Wanxiang is the most likely other participant in this process, and we are not aware of other suitors at this time.” A123’s creditors most likely would prefer someone who pays $465 million for all of A123 instead of someone who pays $125 million for a part of the company, with no takers for the rest.

In August, Wanxiang had announced its intentions to take over A123. The Chinese company immediately gave A123 a $22.5 million loan, including a cash advance of $12.5 million. Wanxiang offered more money, based on a list of requirements, including approval from the Committee of Foreign Investment and the Chinese government, as well as the absence of any default. “Shortly before filing for bankruptcy, it became apparent that A123 would fall short of some of those conditions,” Reuters remarks dryly. The bankruptcy tripped another circuit breaker.

Reuters also remarks that “A123 Systems, which won a $249 million U.S. government grant in 2009 for jump-starting its business” wanted to sell to Johnson Controls, which is “another recipient of federal green subsidies.”

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17 Comments on “The Chinese Still Want A123...”


  • avatar
    CJinSD

    China wants the battery technology because of US government plug-in car requirements, just as they make solar panels to capitalize on US subsidies for their adoption. End the subsidies, and we’ll stop one mechanism that’s funneling Americans’ money to China. Let people buy solar panels when they make economic sense. That’s as good a barometer of resources going where they’re most productive as any, no matter how smart the people that pumped other people’s money into all these failed companies think they are.

    • 0 avatar

      End Walmart and we’ll stop one mechanism that’s funneling American’s money to China.

      • 0 avatar
        jpolicke

        Because everyone knows that Target, Kmart, Sears, Best Buy, Home Depot, Lowes, Costco, etc, etc, etc, are all bastions of American production and that Walmart is the bad apple fueling Chinese imports. Glad you put your finger on the problem.

      • 0 avatar
        d524zoom-zoom

        Thank you bigtruck agreed! Why don’t they have all those made in America commercials anymore??? Hmmm??

    • 0 avatar
      Lucky Ducky

      The Chinese aim to monopolize alternative energy before peak oil hits and the free market decides that, yeah, getting power from an infinitely renewable source and storing said power efficiently has real value.

      The Chinese don’t want to get in on the ground floor of alternative energy. They want to own the building, pave the parking lot, and guard the gate. And the right-wing is handing it all to them because blah blah free market BLAH.

  • avatar
    daveainchina

    I don’t see it that way, I don’t think the US market is the major force here. I think this is the same as the rare-earths market. China is looking to get in on the ground floor and also monopolize the battery market.

    This is just another step in that direction.

  • avatar
    acuraandy

    ‘Imported from Detroit’…..with Chinese (owned) parts.

    ‘Murica…F*** yeah…’

  • avatar
    Robert Schwartz

    What really chaps my hind end is that even if A123 collects $465 million, the taxpayers will get flat f****ing nothing, because the government got neither stock nor a promissory note for its $249 M$.

    That money was just a gift. Let us all slap our foreheads in unison.

    • 0 avatar
      acuraandy

      Done sir.

    • 0 avatar
      icemilkcoffee

      The money wasn’t just a gift. It was a matching grant for A123 to build factories. Which they did build. It doesn’t matter if Wanxiang buys up A123- those factories will still be in America and still cranking out batteries and hiring american workers. And they only used up $132million of it as per the DOE.

      Now if we let A123 close its doors, then that would be money wasted. I think the Wanxiang deal is a no brainer. This is not any kind of military technology. There is no reason for the US to be secretive or discriminatory here.

      • 0 avatar
        Robert Schwartz

        No man in his right mind could say it was anything but a gift. If Waxiang buys it, packs it up, and ships it to China, it will be gone and the taxpayers will have gotten nothing, nothing, nothing. There is simply no recourse open to the taxpayers.

        Back during WWII, the navy funded the construction of an aircraft production facility at CMH. They leased it to Curtis Wright, later it was leased to North American. The last military project there was B-1 sections. When it was done, the Navy declared the plant to be surplus and sold it at public auction.

        There are lots of things the Government could have done, they could have taken stock, they could have taken a note. They could have owned the factory and leased it to A123. That way, they could re-lease it to someone who would operate it in place.

        That is what a prudent Government should do, if it believes a factory should be built for the good of the country. A government that gives away $250 million and hopes that things will work out is run by fools, and will soon be bankrupt.

  • avatar
    cmoibenlepro

    Chinese want that technology and will get it.
    The USA will lose everything: money, tech, and jobs.

  • avatar
    Robert Schwartz

    As it struggled, A123 showered Democrats with donations, hired pricey lobbyist

    http://www.washingtonguardian.com/battery-makers-beltway-power-play

    Have fun folks. Peace. Out.

    • 0 avatar
      sunridge place

      Holy crap…a company getting taxpayer money hires lobbyists to help influence government decision makers???

      No way! This is truly shocking. I think a Pulitzer is in your future.

      Welcome to Business as Usual in Washington regardless of the administration.

      • 0 avatar
        Luke42

        The ROI for lobbying is reported to be around 22,000%:
        http://www.npr.org/blogs/money/2012/01/06/144737864/forget-stocks-or-bonds-invest-in-a-lobbyist

        You’d be crazy not hire a lobbyist. Lots of firms, trade groups, and even universities do. That means that our democracy is inevitably sold highest bidder, and that’s just how it is.

        Solution: Ban campaign donations and campaign advertising completely. Good luck getting that past a bunch of legislators who are dependent on the current system, much less the grand obstructionist party.

    • 0 avatar
      Robert Schwartz

      The complete list of faltering or bankrupt green-energy companies:

      Evergreen Solar ($24 million)*
      SpectraWatt ($500,000)*
      Solyndra ($535 million)*
      Beacon Power ($69 million)*
      AES’s subsidiary Eastern Energy ($17.1 million)
      Nevada Geothermal ($98.5 million)
      SunPower ($1.5 billion)
      First Solar ($1.46 billion)
      Babcock and Brown ($178 million)
      EnerDel’s subsidiary Ener1 ($118.5 million)*
      Amonix ($5.9 million)
      National Renewable Energy Lab ($200 million)
      Fisker Automotive ($528 million)
      Abound Solar ($374 million)*
      A123 Systems ($279 million)*
      Willard and Kelsey Solar Group ($6 million)
      Johnson Controls ($299 million)
      Schneider Electric ($86 million)
      Brightsource ($1.6 billion)
      ECOtality ($126.2 million)
      Raser Technologies ($33 million)*
      Energy Conversion Devices ($13.3 million)*
      Mountain Plaza, Inc. ($2 million)*
      Olsen’s Crop Service and Olsen’s Mills Acquisition Company ($10 million)*
      Range Fuels ($80 million)*
      Thompson River Power ($6.4 million)*
      Stirling Energy Systems ($7 million)*
      LSP Energy ($2.1 billion)*
      UniSolar ($100 million)*
      Azure Dynamics ($120 million)*
      GreenVolts ($500,000)
      Vestas ($50 million)
      LG Chem’s subsidiary Compact Power ($150 million)
      Nordic Windpower ($16 million)*
      Navistar ($10 million)
      Satcon ($3 million)*

      *Denotes companies that have filed for bankruptcy.

      http://blog.heritage.org/2012/10/18/president-obamas-taxpayer-backed-green-energy-failures/

      • 0 avatar
        sunridge place

        You really shouldn’t believe everything you read on the internet. The dollar amounts quoted in many of these are flat out wrong. Other companies here are certainly healthy.

        A123 dollar amount is wrong by a hundred million and change.
        Abound Solar is wrong by hundreds of millions of dollars

        Just to name two. But, by all means, don’t let facts get in the way of your point.


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