By on May 21, 2013

B456 Systems, the lithium-ion battery maker formerly known as A123 Systems, won court approval for its bankruptcy plan. It gives unsecured creditors of the company about 65 cents for each dollar owed, Reuters says.

B456 had received a $249 million grant from the U.S. government. About half the money was never released. B456 received court approval to sell its automotive battery business and related assets to China’s Wanxiang Group.

B456 makes lithium-ion batteries for Fisker Automotive, BMW hybrid 3- and 5-Series cars, and General Motors Co’s all-electric Chevrolet Spark. The company filed for bankruptcy in October due to weaker-than-expected demand.

At least, they kept their humor when naming their new old company.

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26 Comments on “A123 B456 System Bankruptcy Plan Approved...”


  • avatar

    HOW DOES A RECHARGEABLE BATTERY COMPANY GO OUT OF BUSINESS???

    Especially when EVERYTHING WE USE uses rechargeable batteries from laptops to cars???

    This is POLITICS BEING PLAYED HERE.

    Just like the Republicans trying to break Tesla, something tells me there are greedy scum in government and Chinese moneymen on the other side of this equation.

    SOLAR PANELS seem to me to be a great way to get electricity into countries which are PERPETUALLY DARK so I have to wonder how Solyndra REALLY went under.

    Solar Panels + rechargeable batteries equals long term low-voltage energy solutions. With a few solar panels, rechargeable batteries and LED lighting, I could bring long-term cheap energy and lighting to desolate areas.

    • 0 avatar
      Power6

      Any business can be mismanaged, nothing is guaranteed. Not sure if that is the case here, but just sayin’

      If I am wrong I better get into the battery business I don’t have to do a thing to make it successful just hang out my shingle and let the cash roll in!

    • 0 avatar
      Tinn-Can

      “This is POLITICS BEING PLAYED HERE.”
      yeah, it is called handing out “free” money to people that don’t know how to budget or run anything that does anything useful then wiping hands on pants when it falls apart… par for the democrat course…

      • 0 avatar
        CJinSD

        I bet you every one of those Obama contributors is perfectly satisfied with how they budgeted their money. They gave him hundreds of thousands of their own money. He gave them hundreds of millions of OPM. They walked off from the smoking ruins with several million in their pockets.

        • 0 avatar
          mike978

          So I assume you would support campaign finance reform so people cannot legally give money. If they can`t give money then they won`t receive money back.

          This is not a new phenomenon. Just like having campaign supporters getting ambassadorships, when career diplomats would be better (as they do in many other civilised countries).

          • 0 avatar
            CJinSD

            The moral equivalence justifications ignore the scope of the uselessness of these companies and the dollar figures involved.

        • 0 avatar
          corntrollio

          Last I checked, the loan to A123 was championed by then-Congressman Pete Hoekstra of Michigan, although he was for it before he was against it, along with the whole Michigan delegation, Republican and Democrat.

          http://www.washingtonguardian.com/battery-flip-flop

          “the government first awarded $6 million to A123 under former President George W. Bush and that the 2009 grant was sought by the entire Michigan delegation. Bush in 2007 examined a plug-in hybrid Toyota Prius on the White House South Lawn equipped with an A123 battery pack, along with a hybrid pick up truck.”

          • 0 avatar
            CJinSD

            6 million, 249 million, what’s the difference? I suspect you could tell if it suited you.

          • 0 avatar
            corntrollio

            I suspect you could tell the difference between tinfoil-hat patronage theories vs. reality too, but that doesn’t seem to be the case.

            The best anyone could come up with regarding donations is that some of the partners at the law firm they worked with donated to Obama, big whoop. Many of the partners at that law firm probably also donated to McCain and/or Romney. Who cares?

            Any big business likely has people who donate to both parties, and in many cases the businesses themselves donate to both parties. That’s why Republicans and Democrats alike in Michigan supported this A123 loan.

            There’s nothing about suiting me here — sticking to the facts, as you may notice if you cared about something besides ad hominems.

    • 0 avatar
      gslippy

      “HOW DOES A RECHARGEABLE BATTERY COMPANY GO OUT OF BUSINESS???”

      Let me count the ways:

      1. Battery mfrs exist in a sea of competitors. Those who make commodity batteries (18650) compete on price, reliability, delivery, and safety features.

      2. Those who make specialty batteries have a very limited customer base with high initial costs. Being tied to Fisker is poison. The Spark EV is a late bloomer with little volume, and I doubt BMW’s hybrids sell enough to sustain the battery supplier.

      Example – I once worked for a supplier to the Segway, who projected they’d sell millions of them. All of Segway’s suppliers took it on the chin when the volumes were about 1% of the projection. If A123 was too tied to the automotive industry, they were in jeopardy.

      3. Receiving government checks is no guarantee of success – just look at the inner city.

      4. A123 is/was also involved in public power grid applications. It takes a lot of time and effort to break into that club, especially as a new supplier with new technology. Success here would have mitigated the failures of their automotive market.

    • 0 avatar
      E46M3_333

      Making batteries requires a huge investment in capital equipment and hard automation for production. If you don’t have the demand, the machines go idle and you go bankrupt. It’s that simple.

    • 0 avatar
      mkirk

      What exact legislation has any party, be them republican or democrat passed that has had the aim of breaking Tesla?

  • avatar

    KUDOS to A123 for renaming the company something I can easily remember.

  • avatar
    wsn

    This company is more legit than GM.

    1) The 65% return was better than GM’s.
    2) They renamed the company from A123 to B456, which is more creative than from GM to GM.

  • avatar
    jpolicke

    I’ll wait for the C789 batteries. Then for sure they’ll be good.

  • avatar
    fishiftstick

    While A123 did make some small appliance batteries, the company was mostly into big batteries for cars and the electrical grid. The demand for electric cars was grossly overestimated, as was the ripeness of the technology.
    Also, 65 cents on the dollar for unsecured creditors is pretty good for a bankruptcy. If there was some conspiracy to loot the company, you’d think they would have done a better job of it.
    More generally, apparently surprising events happen all the time, sometimes because of the sheer variety of ways things can go wrong, and sometimes because our expectations were wrong. The fact that an event defies your expectations is not a valid reason to assume that a conspiracy must be at work.

  • avatar
    jimbob457

    Electric cars, hybrid and otherwise, are still very much a niche product despite massive government subsidies to both makers and buyers. Current market share in the USA is about 4%. Europe, Japan and other counties report comparable numbers. All this with oil at $100 a barrel. Imho, oil prices are destined to fall in the fairly near future, maybe by as much as 50%.

    Bottom line, now as always before, Mr. Battery lets Mr. Electric Car down. I can see electrics becoming the dominant technology someday, but will that be in 2020 or 2060? I think 2020 is way too soon. Batteries continue to improve, but so do competing technologies. Plus, you gotta make the electricity some way.

  • avatar
    kincaid

    Good automotive suppliers get driven out of business every day. The OEM demands that the supplier capitalize for a ‘pie in the sky’ volume projection. If the volume does not materialize the supplier gets crushed by the burden of the unutilized capital. Low sales of the Volt could easily have driven them out of production. The OEM will not let the capital be repurposed on the hopes that the volume will magically reappear.


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