Failed Taxpayer-Backed Company Purchased by Chinese Firm
(Getty Images)
U.S. battery maker A123 Systems in 2009 was awarded a $249 million grant as part of President Barack Obama’s stimulus plan.
In October of this year, the company filed for bankruptcy. Now they’re being purchased for roughly $257 million by a subsidiary of Chinese firm Wanxiang Group.
“According to the terms of the agreement, Wanxiang will acquire A123′s automotive, grid and commercial business assets, including all technology, products, customer contracts and U.S. facilities in Michigan, Massachusetts and Missouri,” WBJournal.com reports.
“It would also acquire the company’s cathode powder manufacturing operations in China and its equity interest in Shanghai Advanced Traction Battery Systems Co., A123′s joint venture with Shanghai Automotive,” the report adds.
However, not all of A123 was snatched up by Wanxiang.
The lithium-ion battery maker’s Ann Arbor, Mich.-based government business (i.e. all military contracts) was purchased for approximately $2.25 million by the Illinois-based Navitas Systems.
“We think we have structured this transaction to address potential national security concerns expressed during the review of our previous investment agreement with Wanxiang announced in August, as well as to address concerns raised by the Department of Energy,” said Dave Vieau, chief executive of A123, according to the Financial Times.
But although Wanxiang beat out several competitors, including a joint bid by Johnson Controls of Milwaukee and Japan’s NEC, the deal still needs to be approved by the Delaware court where A123 first filed for bankruptcy.
This most likely won’t be a problem.
“The US group will formally submit the bid to the court for approval on Tuesday,” FT notes. “The sale will also require the approval of the US Committee on Foreign Investment.”
When A123 filed for bankruptcy back in October, the company explained that the move was necessary to “provide for an orderly sale” of its operations and “help maximize the value of its assets for its stakeholders.”
Unsurprisingly, the Chapter 11 filing was met with harsh criticism from long-time opponents of the president’s “green” energy agenda.
A123 represents “the latest cautionary tale against the administration using taxpayer dollars to sponsor pet projects and then running from responsibility when they’re not successful,” said Rep. Darrel Issa (R-Calif.), Republican chairman of the House Oversight and Government Reform Committee, in October.
President Obama gives a speech with, from right, A123 Systems President and Chief Executive Officer David Vieau, A123 Systems electrical engineer James Fenton and A123 Systems design engineer Antonio Biundo in April, 2010. (AP)
The company has debt of more than $376 million, according to A123’s bankruptcy filings.
“A123 said because its total sale price would be less than the total amount owed to creditors, the company doesn’t ‘anticipate any recoveries for its current shareholders and believes its stock to have no value,’” WBJournal.com notes.
Final Thought: Energy Secretary Steven Chu in 2009 called A123 Systems “one of the success stories of a high-technology company that was funded with government funds,” and “the model of what we want to happen on a bigger scale [emphasis added].”
Just think about that for a moment.
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Comments (42)
blackbean
Posted on December 11, 2012 at 9:22amHow much will the taxpayers get back from the chief’s idiocy? Nada? Thought so. But, nothing to see here, so move along. Just think about all those jobs saved and your day will get brighter. There is no hope for this country with four more years of this crap.
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G-WHIZ
Posted on December 11, 2012 at 12:35pmSooooo, a FAILED company model….is just what the CHINEESE want…so it fails even bigger for them!!
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oldincarolina
Posted on December 11, 2012 at 9:20amFor many years now I have been reading about foreign countries coming to the U.S. and buying businesses and land. But . as Americans , when we go to their countries , we cannot buy land. The foreign countries have purchased bankrupt farms in the midwest and very expensive vacation land all over the U.S.. They also own many of the skyscrapers in many of our large cities. just to name a few. This is not right. Why is it so ???? I want to know.
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Ghandi was a Republican
Posted on December 11, 2012 at 11:00pmRelax. I know it sounds odd.. but that too is actual investment in the United States. Does it really matter who is invested in the United States? I don’t like the land part of it, but here is what happens. As with Japan who bought up half the West coat in their hayday- it was all sold back later at their loss. The same will happen again- but meantime we get commerce. Now- enemies of the State is an entire different matter. That is what the progressives love to see. And that’s a problem. In the end though- no matter what these subversive obama/alinskyites get away with, the very day they achieve their goal is the day all people join forces and America beats ‘dat asz back to the stone ages. Happens every time. Here in the U.S;;.; though, it will be swift and sure like a tornado. Too many have just been too stupid to know they are being duped yet. they will have to see it with their own eyes and feel it in their own tummies. It’s inevitable. There is no collective.
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noslave
Posted on December 11, 2012 at 8:44ami guess the company name was an inside obama joke on how fast his pals can go into bankruptsy and they can all run off with the taxpayers money this time??solindra??etc.didn’t give you a heads up??
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Army_of_One
Posted on December 11, 2012 at 8:08amSo how much of the $249 Million is coming back to the taxpayers..??????
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DZ-015
Posted on December 11, 2012 at 7:12amThe unanswered question in this story is how much of the grant money do the taxpayers get back as a result of the bankruptcy sale, even if it is only a credit against our debt to China?
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Chuck Stein
Posted on December 12, 2012 at 10:19pmThe answer is: Zero. (But you already knew that, right?)
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scrudge
Posted on December 11, 2012 at 7:00amAh Yes….. oBOZO at work…. kissing cHINESE A$$ES
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Chuck Stein
Posted on December 11, 2012 at 4:07amEnergy Secretary Steven Chu = Obama’s #1 Venture Socialist
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betterpart
Posted on December 11, 2012 at 3:01amNo kidding we’ll be working for China. In my area, the local movie theater sold out to a group from China.
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fastfacts
Posted on December 11, 2012 at 2:29amWell if that doesn’t make you feel good, how about the fact that Obama’s jobs council leader, GE’s Immelt praises China and says that their system is working: http://www.thedailycandidate.com/video/2012/dec/immelt_china_works.html
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AbrahamsSheepdog
Posted on December 10, 2012 at 11:43pmNow the debt ceiling is too low. God help us. Even libs notice that something aint quite right. 30 pieces of silver.
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33sharks
Posted on December 10, 2012 at 11:24pmFunny isn’t it the a communist takes our money, finances a company that goes bankrupt, and then Communist China moves in and buys the company… nothing to see here just move along…America is being fundamentally changed from within….
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bb010864
Posted on December 10, 2012 at 11:17pmIs there anything good that our “clown in chief” has done successfully with our tax paying dollars? I’d like to hear one..? God this is depressing !
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girlnurse
Posted on December 10, 2012 at 11:01pmThis is the slowest train wreck I have ever watched! Somebody throw some dynamite on the tracks..lets get it over with!
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DEFCON4
Posted on December 10, 2012 at 11:42pmThere you go, Girl:http://youtu.be/iLroIZCgRy4..lol….
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girlnurse
Posted on December 10, 2012 at 11:47pmThanks DEFCON. I needed that! lol
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ginger100
Posted on December 11, 2012 at 7:25am@defcon4 Ha ha ha ha
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noslave
Posted on December 10, 2012 at 10:31pmhey the liberals built solindra with your money,obamas pals ran off with the money through bankruptsy,now china can buy a ready made solar company with all the best equipment money can buy for pennies on a dollar ??the fix in in??could all the state land(millions of acres)the clintons and obama set aside??with billions of barrels of oil,etc.,be sold to russia &china for pennies on the dollar,with some kick-backs,when they run america off the cliff??into bankruptsy??
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jman-6
Posted on December 10, 2012 at 11:48pmWhat equipment they were caught on camera throwing it all into dumpsters!
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SAR1ARM1
Posted on December 10, 2012 at 10:25pmSure hope the State Departmrnt is all over this for possiable LiION battery technology export. Then again most of this technology comes from France and Japan. I agree, its tough to take seeing a quarter of a billion dollars of taxes going to China. Probably more like a half to three quarters of a billion sucked out of the economy by the time overal goverment inefficiency is added in. Sad!!!
4 more years and we will be back to the Clinton years! Go Hillary!!!!!!
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jman-6
Posted on December 10, 2012 at 11:53pmWe borrowed the money from them so they are foreclosing and really aren’t buying it!
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Attila_the_Hunney
Posted on December 10, 2012 at 10:25pmEEEwww. The chinese.
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Salamander
Posted on December 10, 2012 at 10:18pmJohnson Controls should have won this bid!
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DadRocked
Posted on December 10, 2012 at 10:12pmEverything he touches turns into gold… Fools gold that is…
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AbrahamsSheepdog
Posted on December 10, 2012 at 11:53pmWhat up Dad. Guess I could use a Dukes o Hazard soung bout now. Hell it’s been 3 years and no booze. I feel almost like a drink. If you would be so kind sir, have 1 for me. Just saying.
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banjarmon
Posted on December 10, 2012 at 9:44pmWill they move the JOBS to china or import their own labor from the home land??
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M40-A1
Posted on December 10, 2012 at 8:49pmWhat a great way for the American taxpayer to pay for the transfer of intellectual property to our mortal enemies, the communist. Obama, thy name is traitor. Oops, I forgot he’s not an American.
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Salamander
Posted on December 10, 2012 at 8:44pmI cannot believe the rape and plunder this man has wrought on our country, whilst our ‘leaders’ sit on their thumbs and watch! On the other hand, most people don’t know that China has essentially cornered the market for rare earths of the type needed for high-tech batteries, displays and electronic components! We had better get busy mining our alluvial sands, hard rock mineral deposits and exploring and developing the same in places like Afghanistan and Iraq! (A productive partnership could conceivably result from such ventures, but there would need to be tax incentives (called ‘depletion allowances’ in former administrations, now called ‘loopholes’ in the present, dumb-downed one!) (Just like ‘FICA’, the Federal Insurance Contributions Act, which formerly appeared on our paychecks, has morphed into something called ‘Payroll Tax’ and covers Social Security and Medicare!) I think we need to morph the progressives back into the Old Stone Age!
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Stelex
Posted on December 10, 2012 at 8:19pmObama is selling off America, in so many ways. Real estate, intelligence, fiscally. We probably don’t have four years left. He’s got a boot on the throat of America, he’s selling off our kidneys, he’s got leaches sucking on every part of America and through the DOE he’s lobotomizing America. We are not doing well people and I really think ……. four more years is a stretch.
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gyro
Posted on December 10, 2012 at 8:11pmYay Yahooooo wooot wooot Us tax dollars going to china !!!!
Wait hold it my mistake china holds the us loans on what they bought !
Dam it they paid themselves !
Move on nothing to see here :)
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Snowleopard {gallery of cat folks}
Posted on December 10, 2012 at 8:08pmAnd so once again Obama helps his Chinese allies and commits further treason against the USA. When is enough going to be enough?
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gyro
Posted on December 10, 2012 at 8:12pmRelax its just beginning
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FISH_BONE
Posted on December 10, 2012 at 8:19pmI am so happy to get up every morning to work my ass off every day to pay for **** like this. May our Kenyan pole puffing pretend president rot in hell one day. And may that day be sooner rather than later.
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PATTY HENRY
Posted on December 10, 2012 at 8:05pmDoes anyone remember when the Japanese bought Rockefeller Center? They were buying up stuff right and left?? Just askin’
LOOK, the FEDERAL GOBMENT (my word) are less than B grade-middle level clerks. They have -0- Business sense; They have -0- Entrepreneurial ability; They have -0- Imagination and their work ethic is to do as little as possible while making it look as if they are ‘very busy’.
Most of them do not believe that GOD owns everything. Many of them believe it is up to THEM to save the world because they don’t believe in GOD. They are flawed human beings. They (like all of us) only use 1% of our Brains. Human Nature is our enemy and Satan rolls around causing Havoc …like that Mayhem guy on TV…doesn’t want to kill us… just mess us up.
There is no way in HELL that any GOBMENT should be making ANY DECISIONS about business except to make sure we are not being poisoned! They are to provide sufficient defense (and when a decent man gets back in power maybe StarWars too???) They are to make sure the Fed. Highways don’t have potholes. They are to make sure the FAA works. Schools, Hospitals, Welfare etc? ALL STATES RIGHTS. The best thing I can say about Obama is that he will prove our premise that the GOBMENT is totally inept and dumber than a box of rocks when it comes to a FREE and PROFITABLE Capitalistic Society. OBSERVE. FIX VOTING DEBACLE so we can get decent people in office. That is our JOB #1. PERIOD.
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