The Chinese Still Want A123

by Bertel Schmitt

Published: October 17th, 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.”

#A123 #BertelSchmitt #JohnsonControls

Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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6 of 17 comments

Cmoibenlepro on Oct 18, 2012

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

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Robert Schwartz on Oct 18, 2012

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.

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- Sunridge place on Oct 18, 2012
  
  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.
  
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- Robert Schwartz on Oct 18, 2012
  
  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/
  
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- Sunridge place on Oct 18, 2012
  
  @Robert Schwartz 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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- Luke42 on Oct 19, 2012
  
  @sunridge place 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.
  
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