The Truth About Cars » Wanxiang The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Wed, 23 Jul 2014 18:25:17 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Wanxiang Delaware Bankruptcy Judge Approves Sale Of Fisker Automotive to China’s Wanxiang Tue, 18 Feb 2014 17:50:27 +0000 800px-Fisker_Karma_2
Last week, Rueters reported that Wanxiang, a Chinese parts supplier, had won the bankruptcy auction for Fisker Automotive. The bid was valued around $149.2 million. The deal comes to close after a bidding war between Wanxiang and Hybrid LLC — a group who includes Richard Li, a Fisker investor and Hong Kong billionaire. In November, Fisker asked for Hybrid Technology LLC to purchase the bankrupt company for $25 million, but creditors objected the deal in November and brought Wanxiang into the case in December.

Today Delaware, U.S. Bankruptcy Judge Kevin Gross approved of the sale to Wanxiang. He stated that the auction “shows that a fair process is a good thing.”

The sale came after a 19 round biding war between Wanxiang and Hybrid Technology LLC, and includes the shuttered General Motors assembly plant that Fisker purchased in 2010. Bloomberg reports, “[the] offer includes $126.2 million in cash, plus equity and $8 million in assumed liabilities.”

Wanxiang also bought A123 Systems Inc. last year after its bankruptcy for $256.6 million. A123 produced the Fisker batteries, which Henrick Fisker attributed to the failure of Fisker after A123 went through bankruptcy in October of 2012, and exiting in March of 2013.


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Henrik Fisker Called, He Wants His Company Back Fri, 24 May 2013 17:05:01 +0000 Henrik Fisker - Picture courtesy

Henrik Fisker paired up with Hong Kong billionaire Richard Li to get his company back. Fisker is a co-founder of severely troubled Fisker Automotive. Li and Fisker are trying to buy the U.S. government loan to Fisker at a big discount. Henrik Fisker was ousted in March.

Another group, China’s Wanxiang with Bob Lutz as a friendly face, is trying to buy Fisker for $20 million.

Around Fisker Automotive hangs a $171 million loan payable to the DOE. The DOE is currently looking into the legal ramifications of selling the loan, Reuters heard. Last month, the DOE seized $21 million from Fisker’s bank account to apply against the first priority loan. Then, there are payables to suppliers.

Just-Auto recently wrote, and I wholeheartedly agree:

“As any rational person in the industry understands, the odds of any automaking start-up succeeding in the long run are about the equivalent of winning the national lottery: it could, statistically, happen, but in reality, it almost certainly won’t. In fact, you might say that starting a firm to make automobiles in hopes of building the company into a global brand is a task mostly for masochists and the deluded.”


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Lutz And Chinese Offer One Penny On The Dollar For Fisker Thu, 23 May 2013 10:33:24 +0000 Bob Lutz  Picture courtesy

Fisker is worth around 200 Karmas at retail. “A team including former General Motors Co executive Bob Lutz and China’s largest parts maker is looking to buy Fisker Automotive for $20 million, a fraction of the “green” car company’s estimated worth almost a year and a half ago,” Reuters says.

Late 2011, Fisker told prospective investors that its total capitalization was “approaching” $2 billion, according to an investor document filing obtained by Reuters. If the bid is successful, Fisker would have officially lost 99 percent of its valuation over the course of  less than two years.

Fisker now owes the DOE some $171 million in loans. Another deal is in the works to buy out the DOE’s position in Fisker at a discount. The DOE had no comment.


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Reuters: Lutz To Help Chinese Buy Fisker On The Cheap Wed, 22 May 2013 16:49:42 +0000 VL Destino - Picture courtesy

When former TTAC Editor-in-Chief and now Editor emeritus Edward “Op-Ed” Niedermeyer wrote an op-ed in the Wall Street Journal and warned that GM’s center of gravity shifts more and more to China, GM’s  retired multi-role fighter Bob Lutz  reamed Ed via Fortune.  Now, Bob Lutz himself appears to be an accessory in a deal that transfers  U.S.  government-financed  technology to China for pennies on the dollar.  Says Deepa Seetharaman, in-house alternative drivetrain expert at the Reuters Detroit office,  in her in-depth article:

“VL Automotive and China’s Wanxiang Group are looking to gain control of Fisker through a prepackaged bankruptcy. This comes alongside a separate push by investors in Europe and Hong Kong, including billionaire Richard Li, to buy out the U.S. Department of Energy’s position in Fisker.”

Here are the players:

Fisker hasn’t made a car since last July, and hasn’t built many before. Fisker hired bankruptcy advisers after firing most of its workforce.

The U.S. Government awarded Fisker a US$529 million green-energy loan in 2010, of which Fisker collected nearly US$192 million until 2011. Then, he government froze the loan.

VL Automotive is a venture between  Bob Lutz and his partner, industrialist Gilbert Villarreal, hence the VL.  At the Detroit auto show this year, VL Automotive showcased a car called the VL Destino, “which combines the shell of a Fisker with the guts of a Chevrolet Corvette ZR1,” says Reuters. The car is said to cost around $180,000.

Wanxiang is China’s largest automotive components manufacturing company. Wanxiang successfully bid for Fisker’s battery supplier, A123 Systems after the company went bankrupt.. This week, a judge approved the bankruptcy plan for A123.

The government loan is in the way of selling Fisker. “Prospective buyers have been unwilling to assume the obligations spelled out in the loans,” sources told Reuters.

According to Reuters, a deal is being negotiated in which a Hong Kong finance group would buy out the government’s loan, most likely at a steep discount. Then the assets could be sold to Wanxiang and VL. Especially independent Chinese automakers need to export to fill their idle capacities. To be able to compete, they need foreign technology.


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Surprise: U.S. Government Won’t Give Money To Chinese-Owned A123 Tue, 11 Dec 2012 13:38:09 +0000 Battery maker A123 was sold to China’s Wanxiang Group, but the company won’t come with more government money. The DOE won’t give A123 Systems Inc. the balance of a $249 million grant, a department official tells Reuters. Wanxiang, in the meantime, let it become known that it did not ask for the grant money, and that it did not anticipate receiving it.

The deal needs court and U.S. government approval. Court approval is more or less certain after Wanxiang outbid Johnson Controls. Approval by the Committee on Foreign Investment in the United States (CFIUS) is another matter. The U.S. government is under a lot of criticism for throwing good money after bad companies.

If the deal won’t get government approval, A123 would be put back on the auction block, whereupon Johnson Controls would be very interested in bidding again, Alex Molinari, president of Johnson Controls Power Solutions, told Reuters.

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China’s Wanxiang Successful Bidder For Government-Backed A123 Sun, 09 Dec 2012 14:40:21 +0000

Wanxiang Group, China’s largest maker of auto parts won the auction for A123 Systems, Reuters says. The maker of batteries for electric cars was funded partly with U.S. government money, but went bankrupt nonetheless.

Investment banker Lazard Freres told Reuters that Wanxiang’s bid of about $260 million was better than a joint bid of Johnson Controls and Japan’s NEC.

Wanxiang supplies auto parts to many of China’s largest automakers. Wanxiang generates about $1 billion in revenue in the United States by supplying parts to GM and Ford Motor Co and has bought or invested in more than 20 U.S. companies, many of them in bankruptcy.

The sale must be approved by Delaware Bankruptcy Court judge Kevin Carey at a hearing scheduled for Tuesday. It also needs the approval of the Committee on Foreign Investment in the United States.

A213 also supplies the U.S. military, and there is opposition to a Chinese company having access to sensitive technologies being used the U.S. military.

However, the part of A123′s business that works with the U.S. Defense Department went to another unidentified bidder, a source told Reuters.

Quite interestingly, the $260 million are just a little more than the $249 million grant A123 has received from the U.S. government. It is not clear whether the grant can be transferred to a new owner.  Even more interestingly, A123 can still draw $120 million under various government grants, court records say.

A123 supplies batteries to Fisker. Fisker stopped production saying it needs to wait until the new owner of A123 has been determined.

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