Lithium-ion battery maker A123 Systems continues to be a source of drama and intrigue, from bankruptcy and court filings to investor relations and national security.

Two US Senators want the Committee on Foreign Investment in the United States (CFIUS), led by Treasury Secretary Timothy Geithner, to review an acquisition deal to make sure military and taxpayer interests in A123 are protected. China's Wanxiang Group Corp. wants to acquire bankrupt A123, and has been locked in a battle with US-based Johnson Controls Inc. to buy A123. Wanxiang was granted permission to offer a loan to A123 by a federal bankruptcy judge.

US Sens. John Thune of South Dakota (R) and Chuck Grassley of Iowa (R) think that if Wanxiang is allowed to buy A123, the Chinese company would have access to the company's military contracts and grid storage technologies. Along with lithium-ion battery systems for electric cars, A123 had two contracts worth more than $4 million to develop batteries for the Air Force, one of which is still in process.

To acquire A123, Wanxiang needs approval from the Chinese government and from CFIUS, a US inter-agency panel that analyzes foreign investment deals for security concerns. A123, which was awarded a $249-million grant from the Obama administration, continues to be something of a political football.

A123 has been granted permission from US Bankruptcy Judge Kevin Carey to borrow $50 million from Wanxiang. After the initial bankruptcy filing, JCI made a bid to buy A123 assets for $125 million, and Wanxiang stepped forward last week saying it wants to be the lead bidder at auction for the assets.

Carey has been hearing testimony from objectors, including Fisker Automotive, which want to extend the bid deadline, auction date, and deadlines in the bidding procedures request, at least 30 days. Fisker has been deeply embedded in A123's technology and wants to see the legal process carried out thoroughly.


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    • 1 Second Ago
  • 28 Comments
      GasMan
      • 2 Years Ago
      So the senators don't want the US government to invest in green technologies but they don't want the Chinese to do so either? Let's just let them go under and lose all the jobs and technology.
        Marcopolo
        • 2 Years Ago
        @GasMan
        "Let's just let them go under and lose all the jobs and technology.Type your comment here" In that case, the technology and the jobs would be purchased by JCI, and remain in the US ! I really wish you would read the articles before commenting !
          Marcopolo
          • 2 Years Ago
          @Marcopolo
          @ Scambuster You are an odd sort of a guy, scambuster ! You always bustle up, and post these definitive pronouncements, unfortunately you always get it wrong ! 1) A123, was a 'public' not private company. 2) In every bankruptcy the company's assets are protected to achieve the maximum benefit for creditors. The difference between Chapter 11 and chapter 7, is Chapter 11 permits the business to continue while seeking reorganization or sale as a going concern. . In contrast, Chapter 7 governs the process of liquidation. 3) The US federal government has no authority to 'purchase the entire company out of bankruptcy court." The federal government can authorize one of agencies to guarantee loans, lend money and accept shareholding as collateral, or even purchase shares, but the US government has no mandate to operate nationalized businesses, without special legislation. 4) A great many, non-communist countries have nationalized industries. (Even the US Postal Service is a sort of nationalized business). Try to do just a little research....
          Scambuster
          • 2 Years Ago
          @Marcopolo
          "Let's just let them go under and lose all the jobs and technology.Type your comment here" Some one is intentionally misquoting the GasMan. That is a major unforgiveable writing sin. In a Chapter 11 filing, it is important that the bankrupt company receives the highest bid for its asset so that creditors are protected. A123 is a private company whose fiducial duty is to advance the interest of its investors while honoring as much as possible the financial obligation to debtors. If the national government were really interested in sustaining the A123 jobs and technology at home, it can very well just purchase the entire company out of bankruptcy court. Having elected not to do that, the national government's dictating to A123 its choice of buyer-savior would be akin to communism.
          brotherkenny4
          • 2 Years Ago
          @Marcopolo
          Only if JCI is not just buying it to bury the tech. They are the leading manufacturer of lead acid batteries. Which is a good business cause you need a new one about every four years.
      Giza Plateau
      • 2 Years Ago
      It's probably in our interest that china gets it since they tend to be more willing to sell product
        brotherkenny4
        • 2 Years Ago
        @Giza Plateau
        Your correct. JCI likely knows that the operating temperature range for the A123 technology makes it a likely candidate to replace starter batteries that are now lead acid. JCI is the worlds largest manufacturer of lead acid starter batteries. Wanxiang probably just want to make and sell stuff.
      Grendal
      • 2 Years Ago
      Computer says no...
      mikeybyte1
      • 2 Years Ago
      You would think they would want to keep it US owned and let Johnson Controls get A123.
      Marcopolo
      • 2 Years Ago
      @brotherkenny4 JCI, is a 139 year old, huge multi-industrial company with 162,000 employees in more than 1,300 locations across six continents. JCI produce everything from car batteries to air-conditioning and have done so since 1885. JCI's three business units: Automotive Experience, Building Efficiency and Power Solutions have revenue of US$ 44.833 billion annually. JCI have the capacity and the technical infrastructure to incorporate and expand A 123's technology. In contrast, Lu Guanqiu's Wanxiang Corporation is much smaller, but like it's dynamic founder, Wanxiang is a very aggressive competitor. Both corporations will be determined to realize the best potential from the A123 technology. No one, not even the crazies at Fox are interested in your absurd conspiracy theory.
      Spec
      • 2 Years Ago
      Everybody have fun tonight, everybody Wanxiang tonight. (I didn't have anything to add, I just wanted to sing that.)
      Zzzz...
      • 2 Years Ago
      Wanxiang had intention of investing into A123 business and wanted to let it grow. Wanxiang already investing in US economy and have got around 2 dozen factories here. A123 have a very strong China ties. The most hi-tech factory, cathode material production that belong to A123 located in China. I wont be surprised if anode also sourced from China(anode materials for li-ion are almost commodity). Furthermore, A123 have development centers in China and participate in joint ventures with Chinese partners. Johnson Controls already have li-ion development / production division. They are not investing in A123, but buying A123 for patents, contracts and other assets. And paying pennies for a dollar. Wanxiang investment into A123 would have benefited US, China, shareholders and A123 customers. Johnson Controls "buy" essentially liquidating business. Good for Johnson, but that is it.
        Marcopolo
        • 2 Years Ago
        @Zzzz...
        @ John H. Wanxiang is a good PRC firm, with an interesting history, and would be a good purchaser of 'civilian' A123 technology. But, I think you're unfairly condemning the US giant. Johnson Controls are one of the USA's oldest companies. JCI, have a very good record of developing the full potential of the companies and technologies they acquire. JCI's offer of $ 120 million, is not peanuts, and is generally considered a fair offer. (Basically the difference between the assets, and the losses) . Some of JCI's major acquisitions, include: 1968 - Penn Controls (refrigeration and gas heating controls) 1978 - Globe Union Inc (automotive batteries) 1985 - Hoover Universal (automotive seating and plastics machinery) 1989 - Pan Am World Services (facilities management) 1996 - Prince Corporation (automotive interiors and electronics) 2000 - Gylling Optima Batteries AB of Sweden (spiral-wound battery technology)[4] 2003 - Borg Instruments AG (automotive electronics) 2005 - USI Real Estate (office real estate) 2005 - York International (air conditioning, heating and refrigerating), $3.2 billion 2006 - Environmental Technologies (air conditioning, heating and refrigerating) 2007 - Skymark International (air conditioning, heating and refrigerating) 2008 - Plastech (injection-molded components and assemblies) 2008 - PWI Energy (energy management consulting and software services) 2008 - Gridlogix (building automation integration) 2010 - National Energy Services, Inc. (lighting services) 2011 - C. Rob. Hammerstein GmbH (CRH Group), (automotive seat adjuster manufacturer). 2011 - Keiper automotive seating from Keiper Recaro group 2011 - EnergyConnect Inc. (Demand Response Aggregator) 2012 - Mitch Speechley (Tillsonburg Hub) Most of these corporations have benefited from JCI's ownership. Don't be too hasty to sell US assets to foreign bidders, so easily ! But, by all means, let a bidding war take place for the highest price, between the two potential 'white knights'.
      Marcopolo
      • 2 Years Ago
      This is a not a difficult issue for Judge Kevin Carey, if A123 has no significant technology that must remain secret for reasons of US national or military interests, . ( as a mere $4 mil contract would suggest) then the assets should be sold the highest bidder, so creditors, US taxpayers etc , get the maximum return. If there are significant US national or military interests involved, then the bidding should be restricted to 'approved' bidders only ! Fisker Automotive's position is somewhat more difficult to decide. Fisker Automotive may be in the position of having no other suitable supplier, and be said to 'own' the A123 technology specifically designed for Fisker. But a delay of thirty days to explore these aspects doesn't seem unreasonable. JCI has clearly based it's bid on the difference between A123 declared assets, and the amount owed to creditors. Interestingly, A 123's co-founder and owner of many battery patents, Taiwanese born Professor Yet-Ming Chiang of MIT, has expressed no preference. This could be because Dr Yet-Ming Chiang, and his fellow founders have already moved on from the problems of A123 ! Dr Yet-Ming Chiang, formed a new venture, 24M Technologies, before the demise of A123, and transferred the newly developed technology of crossing a Li-Ion battery with a fuel cell to develop a semi-solid flow battery to 24M Technology. 24M's radical new energy storage and distribution system, could be exactly the 'holy grail' EV's have been seeking. If it proves viable, all other Electricity storage systems may become be superseded.
        brotherkenny4
        • 2 Years Ago
        @Marcopolo
        Li-air and flow batteries will never be the holy grail for EVs. What these guys don't tell you is that on a volumetric basis these are not energy dense technologies. They be cheap however, and thus should primarily be considered for stationary apps like solar and wind storage. Which of course, makes them even scarier than EV batteries in how far they may disrupt the profitability of the current industrial masters. Thus also why the senate and house guys will hammer on the people who seek government money for these projects. You know, unless they can find some fakey false companies who pretend like they want to commercialize the tech, but are definitely not going to make it sucessful. I am thinking of a number of recovery act companies who now appear to be fakers, on the side of the status quo. All for oil and oil for all, right?
          Marcopolo
          • 2 Years Ago
          @brotherkenny4
          @ brotherkenny4 A conspiracy theory for every situation, huh ? ''industrial masters '', ! Where do you get this stuff ? It's bad enough listening to crazies on Fox TV, at least their motivation is stupid, but understandable, but your nonsense, just makes no sense at all ! Professor Yet-Ming Chiang. could take his patents anywhere, for development. Believ it or not, there are other places on the planet other than the USA ! A Two very highly motivated, experienced Venture Capital Funds are heavily backing Professor Yet-Ming Chiang with significant funding. These guys only make money if the product becomes successfully commercialized. Now, I'm not a scientist, or an engineer, and without wishing to be too offensive, if it comes to preferring the explanation of an MIT Professor and his highly qualified them of scientists, against the opinion of a conspiracy theory crank,.......well, I hope you won't feel too offended if I prefer to accept the opinions of guys who've actually done stuff ! No offense......
        DaveMart
        • 2 Years Ago
        @Marcopolo
        Marco: I may be wrong, but it looks to me as though you are confusing a fuel cell with a flow battery, two very different beasts: http://www.smartgridnews.com/artman/publish/Technologies_Storage/More-details-emerge-on-24M-Technologies-3793.html No mention there of using air to provide oxygen, which is what fuel cells are all about.
          DaveMart
          • 2 Years Ago
          @DaveMart
          Hi Marco: Yeah, fair enough. Your sources say exactly what you said. They are creating confusion though, with inappropriate analogies. That ain't a fuel cell, nor nothing like it, save in the sense that you can pump the fuel around. Dumbed down explanations normally create more confusion. If you ain't taking oxygen from the air or water, it ain't a fuel cell, even if it has equivalently short charge times or energy density. My Latin is of the canis variety, and rather like Chaucer's Prioress's French, is switch as never was in Rome spoke! The Romans were also rather silent on both fuel cells and flow batteries, but of course the writings may not have survives.
          Marcopolo
          • 2 Years Ago
          @DaveMart
          @ Dave Mart I was quoting directly from the US Dept of Energy publication, ARPA-E : [quote] " 24M Technologies: Semi-Solid Flowable Battery Electrodes Organization Name: 24M Technologies, Inc. (24M) Project Title: Semi-Solid Flow Cells for Automotive and Grid-Level Energy Storage Scientists at 24M are crossing a Li-Ion battery with a fuel cell to develop a semi-solid flow battery. This system relies on some of the same basic chemistry as a standard Li-Ion battery, but in a flow battery the energy storage material is held in external tanks, so storage capacity is not limited by the size of the battery itself. The design makes it easier to add storage capacity by simply increasing the size of the tanks and adding more paste. In addition, 24M’s design also is able to extract more energy from the semi-solid paste than conventional Li-Ion batteries. This creates a cost-effective, energy-dense battery that can improve the driving range of EVs or be used to store energy on the electric grid." [/quote] I hope that this will make better sense to you, than me ! Unfortunately, I haven't got around to having an engineer explaining the intricacies of the technology to me, so my knowledge is limited to this explanation ! ( Unfortunately, my classical education equipped me with the ability to translate it into Latin, but that's not of much practical use ! :)
          Marcopolo
          • 2 Years Ago
          @DaveMart
          @ DaveMart Ehu ! But seriously, what do you think of the potential of this technology ? ( Incidentally, did you know the Romans actually developed the steam engine in the 1st century, but only used it in the Cornish tin mines ?)
      Ugo Sugo
      • 2 Years Ago
      typically republican to have a one (convenient) side view of their fundamental pillar that is the free market
        brotherkenny4
        • 2 Years Ago
        @Ugo Sugo
        They are just doing what they can to stop the EV industry. JCI will be more compliant to the wishes of the conservatives than Waxiang will be.
        dexbusy
        • 2 Years Ago
        @Ugo Sugo
        Sounds like standard liberal gibberish. Lemme guess: in your world anyone that doesn't agree with your pov is either a.) Racist b.) Homophobic c.) Standing in the way of progress, cause YOU know better, right? Don't worry soon the world will soon listen to you! (sic)
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