No Chinese rescue for bankrupt battery-making golden child A123
One-time techbiz darling shops self to Milwaukee instead
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Electric car battery maker A123 Systems has filed for bankruptcy in the US and plans to sell its automotive business to American rival Johnson Controls.
The new plan for the Chapter 11 firm scuppers a proposed rescue from a Chinese company, Wanxiang Group, which wanted to take an 80 per cent stake in A123 for $465m.
"We believe the asset purchase agreement with Johnson Controls, coupled with a Chapter 11 filing, is in the best interests of A123 and its stakeholders at this time," chief exec David Vieau said in a canned statement.
"We determined not to move forward with the previously announced Wanxiang agreement as a result of unanticipated and significant challenges to its completion," he added.
Although Vieau kept the reasons for the deal's demise vague, it could be something to do with the political opposition to the agreement because it would be giving money and technology to China. US officials have become increasingly wary of having Chinese tech firms present on US soil, claiming that they would allow their government to cyber-spy on the US and nick American innovations.
Government officials were concerned about A123's contracts with the Department of Defense and also unhappy that billions of taxpayer dollars that came from President Barack Obama's stimulus programmes could end up going to China instead of going to the US and creating American jobs.
However, A123 was also in a bit of a hurry. A $2.8m debt payment came due yesterday, leaving the company in a sticky cash-flow situation and the Chinese deal would require approval from the Committee on Foreign Investment in the US, whereas the US deal can go straight through.
The agreement with Johnson Controls is significantly smaller, allowing the Milwaukee-based firm to nab its auto unit for $125m, subject to higher offers in its bankruptcy auction. ®
COMMENTS
once upon a time A123 made batteries for cordless tools and did well.
then they decided to get into electric cars and politics.
now, they're bankrupt.
there is no step 4. while the media/political complex makes money, it seems the political/industrial complex doesn't work so well after the politico has gotten his election contributions.
Flame, in irony. A123 cells were hard to kill, and if any vented with flame, it was under epic stupidity or deliberate.
Not mourning
The A123 batteries were superb. Recharge in 8 minutes, brutal power density and practically indestructible.
However, if you wanted to buy batteries and you didn't want to buy one billion batteries, they gave you the finger.
People were buying the powertool battery packs, breaking them up to get the A123 cells inside, which was both expensive and increasingly unreliable when inside the packs you suddenly found some other crap and not the coveted A123 cells...
Meanwhile, while A123 has been flipping the bird to customers, the chinese manufacturers have improved their products to the point where they have 1/20th to 1/10th of the power of A123, which is "good enough" for electric cars if you accept overnight charging. Unlike A123, the chinese companies are happy to sell their products both to distributors and to individuals who order a prius' worth of batteries.
The US has no battery tech for China to steal
In 2008 and every year since, the number of Chinese clean energy patents filed globally was more than those filed by US and Japanese inventors combined. Chinese investment in clean energy technology R&D is twice that of the US. And when it comes to battery technology, patents issued to both Japan and China are 5x those to the US, while South Korea leads at 10x. The House Science, Space and Technology Committee is trying to put the final nail in the coffin by killing what remaining investment the US government has in alternative energy research.
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