Wanxiang Group has insisted A123 Systems will remain an American company operationally following intense scrutiny from US lawmakers. China's largest parts manufacturer purchased A123 Systems at auction after the company fell into insolvency, but the battery maker holds a number of defense contracts with the US government. Pin Ni, head of Wanxiang's US operations, told Reuters that A123 will not be folded into the group's lithium-ion battery unit and will instead remain an American company. The $257 million Wanxiang bid excludes the A123 defense contracts.

David Vieau, A123 CEO, said many of the concerns are overblown since his company has been manufacturing batteries in China for the past six years. The company has also worked to develop battery technology with SAIC Motor Corporation, a Chinese-state owned entity. Even so, insiders close to the deal say the battery maker hasn't shared some of its more important advancements with its partners, including tech that helps increase a battery's power density.

Meanwhile, Johnson Controls, the company that lost the bid to acquire A123 Systems by $6 million, has said it continues to be interested in the bankrupt company should the US government not approve Wanxiang's purchase.


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  • 55 Comments
      dukeisduke
      • 2 Years Ago
      "Diffuse"? No, the word you'e looking for is "defuse". Diffuse means spread out over a large area.
        Smith Jim
        • 2 Years Ago
        @dukeisduke
        If your name is Duke, even if it's a nickname, the "D" should be capitalized. Everyone enjoys being corrected for spelling and grammar errors, don't they? (snark)
          ThinkAboutIt
          • 2 Years Ago
          @Smith Jim
          I didn't see any snark in duke's response. It's an observation and correction. You, on the other hand, didn't rise to that level
      navypond
      • 2 Years Ago
      Well, we all know that North Korea's communist government & human rights violations for the last 60 decades has all been possible thanks to the financial & political support given by the Chinese. Good luck Americans. Just remember to watch your back....
      jamesblogspot
      • 2 Years Ago
      It appears that both China And the USA or more like pre war Germany and Italian corporate fascist states. and when it comes to China I do not believe that any one or a group of people can go there and buy 100% of a company, the way foreigners can in the USA mainly because of the crazy free market tea party nuts in US politics. At least in China they protect their national companies. and they do thing for the their society as a whole such as build high speed rails to get cars off the road and help commerce.
        Marcopolo
        • 2 Years Ago
        @jamesblogspot
        @ jamesblogspot 100% ownership of foreign assets is the mark of developed economies. If the entire world adopted your ideas multinational corporations would cease to exist, the flow of international capital would cease to exist, and economic progress would cease to exist. The US would, like the entire world sink into a morass of poverty and starvation ! The PRC only became a successful economy when they started to embrace the concepts of a modern economy and embarked upon world trade. The PRC is not a paragon of social virtue, nor are PRC government policies free from errors and disasters. The PRC, is a nation at a cross roads economically. Soon it must reform both politically and economically to become a fully developed nation. It's has benefited from developing nation status too long, and rest of the world is beginning to resent the unfair competition. The PRC must also become more accountable for it's massive contribution to the worlds pollution, along with India, it can no longer be allowed to substitute propaganda for real pollution reductions.
      jamesblogspot
      • 2 Years Ago
      The best economies in the world or the ones that opted out of the world trade organizations and built their own local economies. All the world trade organizations do is impoverish the masses and make a few very rich while destroying the planet. Local economies always work best. When I eat at my local restaurant the money stays in my town and when people eat at a chain restaurant their money goes to some other city hundreds of miles away. The same applies to international companies. This is the real reason we should stop the sell of foreign companies buying American ones.
      Randy
      • 2 Years Ago
      If the government didnt approve the merger of staples and office depot or max whichever, they should certainly not approve this.
        Levine Levine
        • 2 Years Ago
        @Randy
        When a merger of two viable companies result in a monoply or restraint of trade, the Court will disallow it. China is not involved in such a merger. China is offering to buy a bankrupt company with the approval of the Bankruptcy Court, US Trustee, and creditors. This is typical of bankruptcy proceedings. The hysteria and drama over the A123 sale is due to American fear of Yellow Peril and years of propaganda.
      GR
      • 2 Years Ago
      It's amazing that the "Communist" Chinese are better capitalists than we are as Americans. A123 is a company that got millions from the Obama Administration (sounds like corporate welfare to me). The company then still fails and goes bankrupt. Now a Chinese company won the highest bid to buy the company? With the poor performance of the company despite the millions in gov't provided cash, sounds like A123 should be from a socialist or communist country. But it's from the USA. And then a wealthy company seeking to buy it out by paying the highest bid is... Chinese? 50 years from now (or less) it's a near 100% guarantee that China is the leading world super power. They are not communist anymore other than by title. They have better a sense of economics than Americans. The Chinese buying up US bonds while the US spends itself to death is a sure sign.
        Essende
        • 2 Years Ago
        @GR
        @GR, obviously you must be either very young or naive or else you would know that Wanxiang is in hands of Chinese government officials and there is absolutely nothing capitalistic about it... As a US citizen, please go to China and open up your own business without entangling with Chinese government into some type of a partnership with another Chinese "private" company... Reality is that most of big business in China is in hands of their government officials, average Chinese will never become successful as they do not know the right people on top. To top it all off, there are no copyright/intellectual property laws in China which pretty much kills the idea of innovation, why innovate when you can just wait and copy for a lot less... 50 years from now China is a ticking demographic time bomb that will have a lot of social issues to resolve, also, with their large population I just don't see how they will be able to provide equal amounts of food for everybody and with the technology advancing and automation replacing human labor, there will be masses of people without work, its already happening anyway...
          Essende
          • 2 Years Ago
          @Essende
          @GR, you have been there for a year, you don't really know the connections that your millionaire friends had. I am more than willing to bet that they were someones aunt/uncle/cousin/relative of government level officials. I do a lot of business in China and for every Shanghai/Beijing/Tianjin there are villages all around with over 500 million of people who live in 3rd world country conditions (especially the western part of China). I mean, if I would go to China and just visit Shanghai then I would be extremely impressed. Unfortunately I have also seen the other half of Chinese success story and it does not look pretty. And as I have mentioned, without western world investments, there would be no modern Shanghai. Also, innovation is part of what makes countries a super power. I agree that the ability to purchase/own and produce is part of it but last I have checked most of the stuff that China makes is really low end products, nothing of real INNOVATION value. Which Chinese company leads in any technology? Even their wind farms that they manufacture were really designed in California. I mean I can go on and on but I guess it really doesn't matter. All I know is that a lot of western people in love with China will soon get burned financially. Anyone that is into finance and crunches the numbers knows that Chinese bubble is slowly starting to burst anyway. A lot of jobs there will be lost and they are not coming back. Also, Chinese debt of today is equivalent to Japanese owning our debt in 1980s and how that turned out for them. Everyone loves US dollar and countries get hooked on it to the point where they become too dependent on it with no real alternative in sight. Lend me a dollar and its my problem. Lend me a billion and its your problem. Anyway, my only point was to be rather careful with China and to not to give them as much credit as they really deserve. Every country has its problems and China is far from perfect.
          DaveMart
          • 2 Years Ago
          @Essende
          @Essende, obviously you must be either very young or naive or else you would know that the American car industry is in the hands of US government officials and there is absolutely nothing capitalistic about it. If there were they would all be bankrupt and out of business except Ford. You also seem to imagine that regulations such as that the maximum subsidy for battery electric vehicles just 'happens' to be set at 16 kwh, when purely by coincidence that is what the GM Volt has. There is not a country in the world, and certainly not the US, where big business and Government are not intertwined. Look up 'campaign contributions'.
          GR
          • 2 Years Ago
          @Essende
          Essende, Actually I was in China exactly one year ago. I looked around and noted what I needed to make my assessment. You seem to focus on the American doing business in China. Pfft. Who cares? It's the CHINESE BUSINESS MEN (and women) IN CHINA that I am talking about. Also, if you think the only ones with power and money is the gov't then please explain the people I personally know there who are millionaires but have nothing (except for loathing of) to do with the government? Clearly, you don't know modern China or the Chinese. Also, you think innovation is key to being a super power. No, it's actually the power to produce and own. As this article points out, the Chinese have the wealth and power to just buy up "innovative" American companies. Oh, they also buy up American debt and enjoy interest on it. Also, what makes you really think the Chinese will still be communist in 20, 30 years from now? Even their leaders are the embodiment of capitalists.
          Will
          • 2 Years Ago
          @Essende
          They're "better capitalists" because their businesses have so much involvement with the central planning authorities. For example: They have been out buying contracts for natural resources. The central government is behind this. We mainly leave it up to markets to determine who gets what. If enough American business people think it's a good idea for us to get contracts on foreign natural resources, we'll have them. If not, oh well. Germany is the same way, to a lesser degree; they get their companies involved heavily in central planning for their future. In fact, most industrialized countries do this. We call it socialism, though. Americans won't let their government do anything in their interest for fear of black helicopters.
          Essende
          • 2 Years Ago
          @Essende
          @DaveMart & 2 wheeled menace, reading comprehension 101, where did I state in my earlier post that US was a true capitalistic economy??? Every time there is regulation or any slightest involvement of government into private business, its not capitalism. I don't care about capitalism anyway. I was looking at China as a whole, as GR is giving China too much credit, without really analyzing their big future problems. USA has a lot of issues right now too but China doesn't even have any intellectual property laws, doesn't have any workers rights laws, and their manufacturing sector is already showing signs of a slow down even without organized unions crippling them. Also, if it weren't for Western capital investments in the 1970s and 1980s, China would still be a fourth world country. Reality is that China for a so called future superpower doesn't really innovate. From their bullet trains (Siemens rip off) to their stealth fighter (based upon the shut down wreck F117 in Yugoslavia), they just don't seem to care about real innovation. Even most of their modern architecture was mostly designed by European architects. Leaders don't follow, they lead. And again, their population is still growing, manufacturing jobs (their bread and butter of economy and too keep people from revolting) are slowly being misplaced by either outsourcing or technology, and its a recipe for a social disaster. Again, USA is facing similar issues but we do have top universities in the world which tend to lead in innovation and our population is 1/5 of Chinas.
          DaveMart
          • 2 Years Ago
          @Essende
          @Essende: You should give up on the patronising comments in view of your own condition of unilateral intellectual disarmament. If you were not claiming a difference between China and the US in control of industry, why mention it? Logic 101, young fellow.
        2 wheeled menace
        • 2 Years Ago
        @GR
        GR: Actually it's China's pet project - Hong Kong - that does capitalism better than we do here in the USA. Their government continues to have a budget surplus while the western world continues to erode. As far as the mainland goes, China is pretty smart in their investments but the people are not economically free. They're winning right now due to artificially low labor costs, low labor rights, and lack of proper environmental regulations. When the citizens get truly fed up with either of those 3 things, China's centrally planned economy will be in big trouble, and not have the advantage over freer places.
          GR
          • 2 Years Ago
          @2 wheeled menace
          Essende is right about HK. It was under British rule for 100 years until 15 years ago. Not really a Chinese creation. Even then, you all seem to think communism is just this constant variable. I don't this will be the case in a few decades. Also, HK is a financial hub, but not really an industrial one. Ever heard of Guangzhou located near HK? It's only China's 3rd largest city and a huge industrial powerhouse.
          Essende
          • 2 Years Ago
          @2 wheeled menace
          Actually Hong Kong was a UKs pet project and UK gave back Hong Kong to China in 1997. China took over the city where pretty much everything was already built, set, and business connections well established. China didn't do a lot of work there. Also, there is a lot is mismanaged investments by China, mainly real estate development. They have whole ghost towns built so that the people have some work to do but then no one can really afford to buy it. It is very well documented.
          2 wheeled menace
          • 2 Years Ago
          @2 wheeled menace
          I was not aware of that, thanks for the tidbit.
        Bird2112
        • 2 Years Ago
        @GR
        If you really believe they are not communist anymore, I suggest a field trip. You don't know jack...but the Chinese people do.
          GR
          • 2 Years Ago
          @Bird2112
          I was there last year. Stayed with people who obviously have money and are no way connected to the government. Oh, these are private business owners. So your point about Chinese people and Communism? Sounds like someone thinks China is not evolving.
        Levine Levine
        • 2 Years Ago
        @GR
        In "Animal Farm" the author had the Animals with Power issue edicts and dogma in a parody that illustrates the irony and ludicracy of government propaganda. Almost in parallel with Animal Farm, the American government criticizes China as a "communist" nation, while America's Men of Power nationalizes private business, bailout Too-Big-To-Fail firms, expands the welfare state, orchestrates centralized economic planning, and increasingly curtains economic and personal liberty. Once the world's greatest nation, today's America is the world's greatest debtor. In fact America is a dead-beat debtor unable to pay its debt other than repaying with a debased currency courtesy of the Federal Reserve's printing press. It is a technical default at best, theft as worst. As the holder of the world reserve currency, America abdicated its responsibility to a stable world monetary system by borrowing and spending more than it produces, and subsequently exporting waves of inflation abroad that creates havoc on other nations. Adding insults to injury, America turns around and accuses other nations of manipulating their currency, despite the Bretton Wood Agreement. This is beyond Animal Farm; it's the Brave New World.
        Sir Duke
        • 2 Years Ago
        @GR
        It's amazing that the "Communist" Chinese are better capitalists than we are as Americans. That's the "beauty" of a dictatorship, one voice. Most chinese "companies" are government funded, or started out that way. Our founding fathers in all their wisdom, created a cluster-*****.
      Smith Jim
      • 2 Years Ago
      I don't get how some people are so damn paranoid about China stealing military secrets. China's economy is thriving due to exports. Starting some kind of war would be economic suicide for China. They know it, we know it, and anyone with half a brain knows it. Wanxian is bailing out A123 for no other reason than making money. Get a grip, people.
        Sir Duke
        • 2 Years Ago
        @Smith Jim
        The single most ignorant post ever. Here is what the big deal is all about. China is light years late to the "technology ball", they are desperately trying to play catch-up, and intend to do so, by begging, borrowing bullying (forcing auto manufacturers to partner with their hapless car companies) and stealing technology from the west. Do you think it would be okay for the Chinese to buy NASA and all its technological expertise paid for by the US taxpayer? We spend quite a bundle of cash for our peerless military, its not okay for the chinese to just buy it at fire sale prices.
          Levine Levine
          • 2 Years Ago
          @Sir Duke
          Strawman arguement. China is not buying NASA, a high tech semi-US government agency. A123 is a private company with a unique battery tech. China is not buying anything involving 'our peerless military,' it bought the asset of a bankrupt company at US Bankruptcy Court at a price approved by the Court, the US Trustee and creditors. In a bankruptcy proceeding, the Court appoints a US Trustee whose job is to ensure a maximum price for A123 asset so that optimum number of debtors are paid. China is not " light years late to the "technology ball." " It's electronic, manufacturing, and industrial production are self evident. It's space exploration and accomplishment is also proof. Essentially, your angst is a result of US propaganda, fear mongering, and "Yellow Peril" hysteria-phobia. The diagnosis: The Duke needs to travel more. To Europe, to Asia, to China ..... to learn about the world.
          NY EVO X MR GUY
          • 2 Years Ago
          @Sir Duke
          I agree. This anti-China campaign is nothing more then propaganda. Have you been to China? Have you seen their beautiful architecture? Their buildings? Their skyline? No? That's what I thought. Stop trying to make China look inferior because they're not. .
      cointel
      • 2 Years Ago
      The government gave A123 a bunch of grant money for R&D, now that money is going to China to improve their battery technology.
        Will
        • 2 Years Ago
        @cointel
        That happens with all government research. Toyota's hybrid technology came from a government program called Project for a New Generation of Vehicles (Bush killed the program as soon as he entered office). It has to be done this way, or else all the people with shallow gene pools will start screaming: "Socialism."
          Levine Levine
          • 2 Years Ago
          @Will
          Toyota hybrid tech came from Toyota R&D under Watanabe's watch. Toyota did not copy it from GM, Ford, or Chrysler as some arrogant Americans had claimed -- the same ones who would claim Americans invented the wheel.
        Val
        • 2 Years Ago
        @cointel
        since nobody else WANTED it, it will go to the highest bidder, yes, it's not the chinese fault that JC cheapened out and didn't offer at least twice the valuation to make sure they get that "critical technology". Just like Ener1 went to the russians. And the government didn't give the money for R&D, it gave the money to build the damn factories in michigan, that are sitting idle because nobody wants the magic batteries A123 has. Why did they hurry up with the building of factories when there is no demand will forever remain a mystery. They quote "over 12 customers", which probably means 13, but they never say what VOLUME are those customers ordering. So the management saw the DoE program, decided to gamble that if they built the factory maybe they will land a fatty government contract for some government sponsored electric car or something, and they lost.
      Maddoxx
      • 2 Years Ago
      Sending all this R&D to a Chinese company instead of Johnson controls over a difference of a mere 6 million dollars? Why is our government so incompetent? It's a no brainier. Sell it to the highest bidder in the US.
        Maddoxx
        • 2 Years Ago
        @Maddoxx
        No I am not for government subsidies, but to lose all that money spent on R&D to a Chinese company over $6 million difference in bid is foolish.
          Val
          • 2 Years Ago
          @Maddoxx
          Well then some government officials should pay a visit to the HQ of Johnson Controls and bust some kneecaps belonging to the fools who cheapened out and didn't bid AT LEAST twice the estimated value, something like $500 mil. But probably what A123 has is not that important then, since if it was, not only JC but EVERY automotive supplier would be bidding billions for the magic stuff.
          Val
          • 2 Years Ago
          @Maddoxx
          and let's not forget that the government gave the management of A123 $900 000.00 on THE DAY THEY FILED FOR BANKRUPTCY... that's a funny coincidence...
        Brody
        • 2 Years Ago
        @Maddoxx
        I totally agree, but the Government gets criticism from both angles. If it went to the high bide the criticism would be, "Why are you spending so much more".
      Lunch
      • 2 Years Ago
      I go to China for business all the time. Most tech companies are partnered with the govt, and in fact, in some case, u have to marry the govt to get your business started. If u think the Chinese govt is not going after the battery IP, then I have the SF to Hawaii bridge to sell u.
      X8664
      • 2 Years Ago
      The ignorance of dumb Americans on this blog is baffling.
      ThucBiDza
      • 2 Years Ago
      Look at it as a repayment plan, since we still own them over a trillion in treasuries ;)
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