By on January 29, 2013


U.S. government funded and nonetheless bankrupt battery maker A123 will be Chinese. China’s Wanxiang emerged as the successful bidder in December. All the deal needed  was U.S. government approval. The deal has been approved, says Reuters.

According to the report, the U.S. government committee on foreign investment approved the sale. Some members of Congress and retired military leaders warned against transfer of sensitive technology to China. In blogging circles, the deal was pronounced as good as dead. It wasn’t.

Battery maker A123, hailed by Michigan Governor Jennifer Granholm as a contributor to “63,000 jobs,” praised by Senator Levin for hiring “thousands of employees by next year,” praised again by Senator Stabenow for creating “thousands of jobs for us in Michigan,” will power the creation of thousands of jobs in China instead.

A123 had received a $249 million grant from the U.S. government. Wanxiang did bid a similar amount, $257 million, and won against Johnson Controls.

Where are Obama, Granholm, Stabenow and Levin when no one really needs them?

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24 Comments on “Bankrupt A123 Sold Off To China – Washington Says It’s Cool, Now What About Those 63,000 Jobs In Michigan?...”

  • avatar
    schmitt trigger

    I would hope that there is a clause in the decision which would require NOT to transfer jobs out of the US to China…..well, they can have the polluting ones.

    Having said that, there is the ultimate oxymoron: “Politicians making intelligent decisions”.

  • avatar

    Obama, never has to run for re-election. KMA.
    Stabenow and Levin, never have to run for re-election. KMA.
    Granholm, gone and not forgotten. Darling of Al Gore’s (oops Al-Jazeera’s) TV channel.

    Who says these politicians are good for nothing?

  • avatar

    Does anyone actually use their batteries?

    • 0 avatar

      Fisker. They have apparently stopped making cars until the situation is clarified.

      I doubt Fisker needs enough batteries to keep a company alive, though … so I don’t know if they are going to be in big trouble or not, since there may or may not be good reasons to continue building the model of batteries they need.


      • 0 avatar

        They also supply batteries to F1 teams for KERS…

      • 0 avatar

        BMW, VIA Motors, TaTa Motors, Auwahi Wind Project in Hawaii, Dongfang Electric Corporation, and AES Gener. Their portfolio of products extended far beyond Lithium-Ion battery packs for autos.

        Of concern – they were involved in developing military grade Lithium-Ion solutions.

    • 0 avatar

      A123 did more than batteries for automotive applications. They made batteries for utility companies to stabilize the grid. A123 batteries were also found in some hand tools. More to the company than what a car blog is primarily interested in.

  • avatar

    Notice how bankruptcy of a key supplier can shut down a whole assembly line, and in Fisker’s case, a whole company. That’s why even Ford was in favor of a bailout of GM and Chrysler. If GM or Chrysler had gone down at that time, the suppliers would have gone down like dominoes. Heck, the Japanese automakers didn’t even complain even though the bailout probably violated some fair trade agreement. Their transplant operations would have been just as affected.

    • 0 avatar

      Notice how Honda and Toyota had much of their supplier base wiped out by an earthquake and a tsunami in 2011, but set sales records in 2012. A little short term pain would have spared us years of discussions about how much fascism is justified to save union manufacturing votes, I mean jobs.

      • 0 avatar

        Most automakers probably would have survived 6 months of limited production due to supplier bankruptcies in 2008, but many of their employees wouldn’t have. They would have defaulted on their car loans and home loans and credit cards. A country that was on the brink of another great depression might have been pushed over the cliff. The suppliers that went bankrupt would have their assets purchased by companies like Ceberus and Bain Capital, and they would have moved those jobs to Mexico or the Far East.

      • 0 avatar

        If Honda and Toyota did business with only Japanese suppliers, your point would have been valid. However, since Honda and Toyota have manufacturing operations here in the United States, they also do business with American parts suppliers, including those that also serve the Big 3. If a Big 3 supplier had gone down, they also would have been adversely affected … unless they had sufficient inventory to deal with such a contingency.

        Besides, Toyota wasn’t severely affected because its Japan-based suppliers are located near their corporate headquarters in Nagoya, which is far from where the earthquake’s epicenter was.

      • 0 avatar

        Less than 8 months after the earthquake in Japan, Toyota and Honda lost their supplier base in Thailand to flooding. Both disasters made impacts, but both have been recovered from. Toyota and Honda did not need GM and Chrysler to be bailed out. They’d be doing better today, since most of the people effected by job losses aren’t buying their cars today and they’re resilient enough to build cars without US suppliers in the short term.

        Plenty of people lost their jobs thanks to the Democratic majorities elected in 2006. Plenty of people continue to lose their jobs thanks to the policies they enacted to protect their voting blocks.

      • 0 avatar

        What specific policies are you pointing to and what number of jobs can be specifically enumerated to each policy?

      • 0 avatar

        2 samples, as I’ve work to do: NLRB costing Boeing employees in South Carolina their jobs so organized crime can continue to suck Boeing dry in the PNW. Obamacare marketed as the key to making US manufacturing union employers internationally competitive is instead keeping investment out of the economy and causing layoffs upon implementation. Do your own googling. You aren’t clueless by accident.

      • 0 avatar

        CJinSD wrote: “Toyota and Honda did not need GM and Chrysler to be bailed out.”

        Not as it pertains to their operations in other countries, perhaps, but their operations in the United States use the same suppliers as the Big 3, including GM and Chrysler, and the loss of even one of those Big 3 suppliers would hardly be in their best interests.

        Could Honda and Toyota have found other suppliers? Maybe … but I doubt that they would wish to see a Chrysler or GM supplier go out of business if they knew beyond a reasonable doubt that they themselves would be adversely affected.

      • 0 avatar

        Those are nice talking points, but the NLRB is an independent agency, and there’s no evidence that healthcare reform did that. There are probably several poorly written op-eds that aren’t based on fact that say that, however.

      • 0 avatar

        First line of wikipedia:

        The National Labor Relations Board (NLRB) is an independent agency of the United States government charged with conducting elections for labor union representation and with investigating and remedying unfair labor practices.

        I see two problems here, (1) why is an independent agency charged with catering to unions being funded by dot gov and not split between the unions themselves (or said unions specifically taxed to fund it) and (2) wasn’t the whole point of a union in the first place to protect its members AND to remedy unfair labor practices through group leverage and/or extortion?

        In my view either this agency is slightly obsolete or the entire concept of a union is since this agency will “investigate and remedy unfair labor practices.”

        Hehe a group of younger workers should get together and petition this agency to investigate UAW’s two tier pay system, isn’t that an “unfair labor practice” against the new workers?

  • avatar

    It’s sad that the US doesn’t value the importance of battery technology. Well- China clearly sees the value and now they are reaping what we had sown.

    • 0 avatar

      Oh, I think the US DOES value the importance of battery technology but there simply is no market for it at this time. Not here. Not there. Not anywhere. EVs are a bust! Oil is plentiful. Coal is even more abundant. Natgas is even more copious than we can possibly use for several hundred years into the future yet.

      And without some semblance of a possible profit or return on investment, battery tech is not going to attract any private or corporate funding. No future in it, as yet. Maybe in a couple of hundred years.

      China will underwrite battery tech forever and may never see a profit from it, but then again, that is China. Their mentality is totally different from a free, open, capitalist, profit-driven society like the US.

      And we, the American people, are funding their ventures, indirectly, by buying their Chinese-made goods. So, indirectly, we the American people are also funding their newly acquired battery tech.

      China can’t even feed its own people. Battery tech is not going to put food on the table. Creating battery tech jobs is meaningless if there is no market for its products. And, currently, there is no market for its products. That why A123 died, in spite of being US taxpayer funded.

      At some point in the very distant future, when the planet runs out of oil, coal and Natgas, that’s when we’ll see renewables take on a meaningful place in energy generation and storage.

      But for now and the foreseeable future, renewables are a waste of time, resources and money and only advocated by the very few who want the many to pay for their folly.

  • avatar

    Good points. I suspect that all of these “renewables” that are being pushed by the Obamanites will never bear fruit in the long-term. They’ll be Black Swan technologies we never anticipated that will displace the hydrocarbons. Things like miniature thorium reactors or ZPE sources or God knows what.

  • avatar

    The loss of GM and Chrysler without the bailout sinking the other car companies is bunk.

    #1) Put in simplistic terms; the day GM/Chrysler goes bankrupt they are debt free companies owned by the former creditors. One of those creditors being the union. If they want their money back they will keep the company running. If they need capital; since they no longer have debt payments; it would be available since the slate is wiped clean.

    The parts suppliers would downsize if they actually lost business permanently and would continue on smaller. It is not an all or nothing thing. If they needed temporary capital to keep going, the remaining car companies could advance them the money. It is in their interest to do so.

    #2) Worse case….if GM/Chrysler did close down completely, the other car companies would have to increase production to fill the demand created by the X million people who would have bought a GM/Chrysler car but cannot. They would have to hire more workers and either build more plants or take over GM/Chrysler’s plants and workers. Or do you think those X million people would never drive again since they cannot have a Chevy?

    And which companies would fill this demand and in what percent? The ones who were able to provide the best product to capture those displaced customers. Everyone wins in the long run in REAL capitalism; not the crony kind this battery company was part of.

    Forget Toyota and the tsunami…. Mercedes, BMW, and Volkswagen in the 1940s had their factories and their parts suppliers bombed into a total pile of rubble, inside a ruined and completely bankrupt country. A country later broken up into pieces. A large percent of their workforce was also dead. And they all survived that.

  • avatar

    Nearly the entire electric vehicle industry is being propped up by unsustainable taxpayer dollars provided by stimulus. Hybrids seem to be doing ok but the EVs are going down the toilet within 24 months is my prediction.

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