Paranoia or well-founded fears?

Some U.S. auto executives are expressing concern that the Chinese Wanxiang Group's investment in struggling lithium-ion battery maker A123 Systems may put trade secrets at risk. China may get first dibs on lithium-ion battery technology advancements if Wanxiang Group moves some of A123's research and development operations to China, Reuters reports, citing executives that declined to be identified (but Bob Lutz has gone public with his criticism). Pin Ni, Wanxiang's head of U.S. operations, downplayed such concerns, telling Reuters that the company will "do what's best" for A123.

Earlier this month, A123 reached an agreement with Wanxiang Group that could be worth as much as $450 million and may give Wanxiang Group as much as an 80 percent stake in A123. Republican House of Representative Cliff Stearns said at the time that the deal may compromise trade secrets of a company that has received Department of Energy funding.

This year, A123 has been hampered by issues such as a battery recall and lower than expected electric vehicle sales. The company, which was founded in 2001, said in a late May filing with the Securities and Exchange Commission that it expressed "doubt" over being able to continue after losing its primary line of credit. A123's customers include General Motors, BMW and Fisker.


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    • 1 Second Ago
  • 33 Comments
      miles
      • 2 Years Ago
      Here's a laugh: "Pin Ni, Wanxiang's head of U.S. operations, downplayed such concerns, telling Reuters that the company will "do what's best" for A123." I'm pretty sure the owners of the company will do what's best for the owners of the company. Do the Chinese mistakenly think we're that stupid? Or are we actually that stupid?
        SNP
        • 2 Years Ago
        @miles
        Right on miles....kinda like when mercedes benz owned chrysler and did what was best for chrysler.... be...cause... I ... guess chrysler....needed to be gutted...and then sold off....and now look at them! Chrysler is fine now see? Doing what's best for the company... LMAO - owners do what's best for the owner, not what's best for the company. Dont quit your day job miles...
      • 2 Years Ago
      I guess to let A123 to die so to not leak the US secrets/technologies to China will be a good idea.
      • 2 Years Ago
      of course its something to be concerned about, they are evil, and kill their own people, not only that they routinely hack american companyes for trade secrets, of course they are willing to pay for it
      Marcopolo
      • 2 Years Ago
      I think there are two separate issues here. The first is the type and nature of foreign investment any country allows into it's economy, especially on strategic issues. Secondly, does A 123 actually possess any really valuable intellectual property ? The first is a political policy decision which each nation must determine, and administer in it's own best interests. The second is best determined by the relevant government agency, and approval granted or denied, depending on that agencies report. In itself there's nothing wrong with appropriate foreign investment.
      JP
      • 2 Years Ago
      The Chinese and/or Koreans have been making A123 cells for while as far as I can tell, they already have the secret sauce. This is no big deal. Hopefully the Chinese can do what A123 could not, get the price down.
      Spec
      • 2 Years Ago
      Can you at least find a different unrelated image to go with the article? Maybe go back to that A123 T-pack that you regularly recycle.
        Joeviocoe
        • 2 Years Ago
        @Spec
        I know, is Danny getting jealous of Jon LeSage? He had to post an article with the same stock photo?
        Spec
        • 2 Years Ago
        @Spec
        LOL. There we go! The old Volt/A123 image.
          MTN RANGER
          • 2 Years Ago
          @Spec
          Actually, it's the Fisker Karma battery pack.
          Spec
          • 2 Years Ago
          @Spec
          Aaah, I always thought that image was A123's version of a pack for the Volt that was not selected.
      • 2 Years Ago
      Sadly, A123 screwed every shareholder
      Michael
      • 2 Years Ago
      While Chinese companies are known for insisting on the release of IP in order to put money behind other companies, so does every other US company. Complaining about this would be like complaining if Apple bought 80% of some small tech start-up and then enlisted that start-ups technology in their next big thing. Had any large domestic company decided A123 was worth saving, they would gain access to the technology A123 has developed. Yes, this sucks, but it's capitalism at it's finest. Had A123 not encountered so many issues with their battery tech maybe, just maybe a US investor would have come in and saved them.
      Ford Future
      • 2 Years Ago
      Interesting, EZEE, how do you like Romney's campaign being funded by Hong Cong [ China ] and Saudi money? Which is clearly illegal. And Bain still outsourcing jobs to China as Romney runs for president, and Romney say's he's solve the unemployment problem? China's unemployment problem? Clearly, the Republican Party hasn't got ONE Proposal on the table that will benefit America. Are you still going to vote for Romney?
        EZEE
        • 2 Years Ago
        @Ford Future
        I know about all of that outsourcing. It really pissed me off when I went to Sports Authority yesterday. I walked all around the store, and there were no employees! None! I got disgusted and then went to Staples. Again, no employees! Not a single one! I found a note, 'all jobs shipped to china!'. I figured I would go to Baskin Robbins and get an ice cream (7% body fat, I can afford an ice cream), and Bain struck again! No employees. Just ice cream, and no people to serve it! I went to Brookstone, Burlington Coat Factory...the results were all the same. Stores and places that somehow operated without employees. Meanwhile, in 2008, every last one of the top 10 contributions from evil hedge fund managers went to Barack Obama. Copied from the NY Times: John Griffin, the founder of Blue Ridge Capital, who made $625 million in 2007, according to Alpha. Griffin is backing Obama after initially supporting Mitt Romney. Kenneth Griffin (no relation) of Citadel Investment Group in Chicago, who earned $1.5 billion. He contributed to the Obama campaign after the senator went to his office last year. Stephen Mandel Jr. of Lone Pine Capital, who took home $710 million last year. And, of course, George Soros, who earned almost $3 billion last year. It is no surprise that Soros, a Democratic stalwart, is backing Obama. Soros campaigned against President Bush in 2004, and Moveon.org, which Soros has plied with tens of millions of dollars, endorsed Obama in February. And now, of course, we are heading, with our foot on the gas pedal, towards bankruptcy. Hope austerity works for you.
          EZEE
          • 2 Years Ago
          @EZEE
          Now...I know I know...raise taxes on the evil rich, that will fix it! Let's say we raise the taxes on billionaires up to 70%. Ignore the fact that they will all leave. Let's say they are dumb with their money (that is why they are billionaires, because they are dumb with money), and they stay. The average annual income of these billionaires is $106 million. There are about 403 billionaires in the USA. Doing the math, the tax would raise about $30 billion a year. Now! Seeing as our deficit for a single year is $1.3 trillion, we would now drop to $1.270 trillion. It would do nothing toward the financial collapse we are heading to. But, no one in the media would report that sort of thing, would they? But at least I see why all those hedge fund managers got bailed out. Why the banks got such sweetheart deals.... They bought and paid for Obama. And he delivered! Now again, learn what baseline budgeting is, I plead for you too, and you will learn why we are so screwed, and why the senate has been so happy to not pass a budget. The scary thing is, the financial cliff we are heading towards will hurt your side, and your interests, just as bad as my side. The only ones who figured it out and look forward to it are a couple of professors names cloward, and piven.... Learn about them....you will understand (hint hint....they are leftists).
      lad
      • 2 Years Ago
      A123 is a company waiting to fail because of very poor management; they have a great product in their 23C power battery and the battery was developed with our tax money...now are you just going to let them give it away to the Chinese, are you nuts? We develop the products and the Republican Congress winks when we ship the IP over to another country. Take a stand and make A123 reorganize as an American company under the U.S.law; perhaps the next group of managers will create American jobs for our people instead of the Chinese. This crap must stop...it's time poor management answered for their decisions!
        Joeviocoe
        • 2 Years Ago
        @lad
        Yeah, there is a lot of hypocrisy when it comes to people who say they want more of the free market. But the free market doesn't always favor Americans, then they complain. Although to be fair, the free market advocates were probably opposed to any tax money going to A123 right?
          Marcopolo
          • 2 Years Ago
          @Joeviocoe
          @Joeviocoe Joe, the problem is that only America, and the west, plays by the rules of free trade. Most countries bend the rules to some extent, but the PRC doesn't even attempt to implement the rules. The PRC economy would collapse if the WTO rules were enforced and the PRC was obliged to compete on a level playing field.
          DB
          • 2 Years Ago
          @Joeviocoe
          The US doesn't always play buy the rules. Raising tarrifs for imported products just to protect domestic industries isn't a problem in Korea and China. A few years ago Whirlpool announced that it is closing many of its US manufacturing plants. Much of its manufacturing would be done overseas or in Mexico. At Whirlpool's request, the Commerce Department adds trafifs (up to 74%) on Korean and Mexican (NAFTA be damned!) washing machines. Like Magic Whirlpool announces it plans to bring all manufacturing back to the US. http://www.freep.com/article/20120730/BUSINESS06/120730054/commerce-dept-grants-whirlpool-request-for-tariffs Isn't this the type of behaviour that we criticize Korea and China for?
          DB
          • 2 Years Ago
          @Joeviocoe
          Meant to say: "Raising tarrifs for imported products just to protect domestic industries isn't a problem that is limited to Korea and China. "
        SNP
        • 2 Years Ago
        @lad
        That poor management was the original inventor of the A123 battery chemistry. I think they screwed up when they got pressure from Fisker and sloppily tried to deliver an untested product. If Fisker wasnt in such a rush to build their cars, they wouldnt have had so much quality issues as well.
          lad
          • 2 Years Ago
          @SNP
          I must tell you that their hunt for an OEM was poorly done; why would you, as a startup battery company, pair with an unproven car company? Did you notice that no other battery company went that way?You as a new company are looking for stability and deep pockets; There is still a market for the A123 products and it's in the U.S....selling on the open market to DIYers, Race Car builders and smaller OEMs. Their starter battery product could catch fire easily when start/stop comes to the auto world. But, they will never be successful with their current management. The act of selling out to China does nothing to advance EVs in our country...it only serves to save the bank accounts of the current failed A123 managers. Keep the product in American and out of the hands of the Chinese Traders.
      brotherkenny4
      • 2 Years Ago
      The point is that the republicans criticize government investment in technology and now they are upset by the chinese buying what the GOP implied was not practical or created by the free enterprise system. The hypocrisy is astounding. In my opinion they are upset because now A123 might survive, and they (the GOP) wanted them to fail. The GOP is saying they don't want millions of Chinese dollars to flow into the US to produce something they believe is a waste of time. These "green" cars will never work right? Obama is just sending money to his buddies in the "greenie companies", right? For the GOP to prosper they need to cause pain, and without the failures they need, that won't happen. Their desire for power is so strong they would destroy us before they would give up. Not that the DFL doesn't have some of that characteristic too.
        EZEE
        • 2 Years Ago
        @brotherkenny4
        For the democras to prosper, they need to cause pai , and without thr failures they cause, people won't need them. Their desire for power is so strong that they would destroy us, as they have in Detroit, and elsewhere, before they would give up. What, is a democrat, without an endless supply of victims, to 'help?'
      Levine Levine
      • 2 Years Ago
      "Yellow Peril" hysteria has officially been inaugurated. After years of anti-Chinese propaganda from various special interest groups that demonizes the Chinese, the American red-necks and bigots, brainwashed into a frenzy, are ready to throw down the gauntlet over China's investment in A123. Like rabid dogs foaming at the mouth, these madmen chased down WalMart because it sells many Made-in-China products. Instead of criticizing their own government's flawed economic policy, ignorant Americans attack China for manufacturing much of the consumer goods that USA had stop producing.
        EZEE
        • 2 Years Ago
        @Levine Levine
        Is shipping jobs to china a bad thing then? Not asking to be sacastic, but curious on your opinion.
        SNP
        • 2 Years Ago
        @Levine Levine
        Well I can say that there has been a slight anti chinese tone in american politics for the past 10yrs, but it has died down a bit since the Obama election. Now it's more relegated to the republican party. @Levine Levine, the american economic policy is not flawed. We go through this whole push and pull scenario with the global market system that we started. China will have a social/poltical/economic hiccup and when it happens, the results of their response will not be pretty. So far, they've been riding on the backs of the ever willing poor folks in china - the same people who grew up eating 1 meal a day dont see $10/day salary as being bad. Once the newer generation comes in with some modern expectations of what life should be, you will see huge problems. FYI - it took the US, 40-50yrs to realize the social impact of the WW2 baby boomers retirement cycle. And this isnt even as extreme as japan or china. If you look at the population swell mostly geared towards male births, coupled with a one child policy for 30yrs, you've got disaster coming down the pipes in china. That is actual failed policy. The US giving the banks more power is not failed policy because freedom with individual restraint and govt regulation has always been US policy. It's what has differed the US from every other nations for almost a century.
        Marco Polo
        • 2 Years Ago
        @Levine Levine
        @ Levine Levine With every post you always manage to slip in a little anti-US propaganda ! Why don't you try posting criticism of the Peoples Republic of China's human rights violations, on the PRC internet ? What's that ? Oh, you can't, because the PRC censors the internet? What's the attraction in being an apologist for the PRC ? Do you imagine the Chinese respect those who betray their own people ? Or are you just a sad sort of loser, in the Lee Harvey Oswald mold, bitter, and blaming America for your own shortcomings and failures ?
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