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 Post subject: More Stimulus Money to China- A123 sale
PostPosted: Wed Dec 12, 2012 12:25 am 
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Joined: Sat Jul 31, 2010 12:34 am
Posts: 3850
Chinese billionaire to scoop up failing car battery maker that got $240M from feds
Published October 11, 2012
FoxNews.com

Feb. 21, 2004: Lu Guanqiu, board chairman of Wanxiang Group, sits in his office at the company's headquarters in Xiaoshan, China. (Reuters)

A struggling Massachusetts-based company that makes batteries for electric cars and got $240 million in stimulus money is being saved from bankruptcy by a Chinese billionaire who could move operations overseas.

A123 Systems received a $241.1-million grant from the Obama administration three years ago and more than $125 million in State of Michigan tax credits in the hopes that the company would create jobs, while leading the country away from conventional gas-guzzling vehicles and toward clean energy.

But the lithium ion battery maker is now poised to hand over the reins to Wanxiang Group, a Chinese firm, which agreed in a tentative deal last August to invest up to $450 million so that it can take over as much as 80 percent of the company.


"It’s money that we’ll never get back."
- Jarrett Skorup, Mackinac Center for Public Policy


Since 2009, the Waltham, Mass.-based company has lost a reported $857 million, laid off workers and recalled its products. A123's stock price has plunged from $4.44 about a year ago to 26 cents this week.

"They were wrong," Jarrett Skorup, a research associate with the Mackinac Center for Public Policy, said of the Obama administration. "The problem is that policymakers decided to be in the business of picking economic winners and losers and unfortunately they've picked the losers far too often."

"It’s money that we’ll never get back," Skorup said of the massive amount of stimulus cash. "It was grant money so there were not a lot of strings attached to it." The battery maker's precarious position is due to many factors -- most notably one that is beyond the company's control: a lack of demand for batteries that charge electric vehicles.

"It failed because there's not enough demand and also because there are companies outside of the U.S. – some in China -- where they're able to produce the equipment for cheaper," said Skorup.

"Representatives should not be in this business of trying to determine what the next new thing is in terms of technology," he told FoxNews.com. "The free market does it much better."

A123 Systems supplies batteries to customers, including California luxury carmaker Fisker Automotive. The deal with Wanxiang Group -- owned by Chinese billionaire Lu Guanqiu -- also raises the question of whether the manufacturer will be forced to move to China. A representative from A123 Systems did not return a request for comment on the matter.

Pike Research analyst John Gartner told the Detroit Free Press that such a scenario is highly probable.

"Because of the weight of the batteries, it's much more cost effective to manufacture where they're going to be used in the vehicles," Gartner told the newspaper.

The company was once touted by President Obama as a great example of "what's possible in a clean energy economy.""Truth be told, A123 was looking to build that factory in Asia. But because it received that grant, it chose the state of Michigan for its largest and most innovative plant yet," Obama told reporters at an April 30, 2010, press conference. "And that plant will be one of 30 new plants to go fully operational over the next six years, manufacturing electric vehicle batteries and components right here in the United States of America."So this is what's possible in a clean energy economy," the president said.

The situation with the struggling company is similar to that of Solyndra, a California solar-panel maker that went bankrupt after receiving $535 million in federal loans.

Workers at the Compact Power manufacturing facilities in Holland, Mich., run by LG Chem, have been placed on rotating furloughs, working only three weeks per month based on lack of demand for lithium-ion cells. The Michigan hybrid battery plant, once praised by Obama as evidence "manufacturing jobs are coming back to the United States, was built with $150 million in taxpayer funds.

The facility, which was opened in July 2010, has yet to produce a single battery for the Chevrolet Volt, the troubled electric car from General Motors. The plant's batteries also were intended to be used in Ford's electric Focus.

Production of the taxpayer-subsidized Volt has been plagued by work stoppages, and the effect has trickled down to companies and plants that build parts for it -- including the batteries.

“Considering the lack of demand for electric vehicles, despite billions of dollars from the Obama administration that were supposed to stimulate it, it’s not surprising what has happened with LG Chem. Just because a ton of money is poured into a product does not mean that people will buy it,”

~~ Thats the governments thoughts, more money fixes everything- ~~ always work well in our education system :roll: ~~the story in the paper today said ~ A123 systems announced Sunday that Wanxiang would pay $256.6 million for all of a123s technology,it's manufacturing facitilies in the US and China,and it's contracts with utilities seeking battries for electric and hybrid vehicles.~~so lets see they got $366.1 million of our tax dollars and are selling for $256.6 million.?? :roll: some one please tell me again how we didn't need a business man in the white house...

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"AMERICANS Used To ROAR Like LIONS For LIBERTY,- NOW They BLEAT Like SHEEP For SECURITY."- ~~ Norman Vincent Peale-______ ~~ COPS ARRIVE IN TIME TO DRAW CHALK LINES , ~~~IT'S UP TO YOU TO SEE THE OUTLINE ISN'T AROUND YOU ~~.


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 Post subject: Re: More Stimulus Money to China- A123 sale
PostPosted: Wed Dec 12, 2012 9:46 am 
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Joined: Fri Jul 30, 2010 4:31 pm
Posts: 6244
Don't worry, Obama will just borrow more money from them.


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 Post subject: Re: More Stimulus Money to China- A123 sale
PostPosted: Wed Dec 12, 2012 3:00 pm 
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Joined: Sat Jul 31, 2010 12:34 am
Posts: 3850
Vic wrote:
Don't worry, Obama will just borrow more money from them.

~WOW!! Vic out of 24 views your the only reply ,shows that 23 others are probably taking from the guberment rather than paying taxes, any tax payer would be pissed ,they are spending $700,000 to $900,000 to fix a quote on the MLK statue. A quote that don't need removed ,it's not degrading , just another place they waste money ,BUT seems no one can ever find a place to cut funds. Whats a few mil here a few bil there when your in up to 16 tril. Yo a few here and there adds up sooner or later. the system, it's coming down sooner ot later when it all crashes and no ones supporting those who brought it down cause they are all on the bottom ,see how happy they become then. When survival goes back 100 yrs very few will have any idea what to do,other than take from those who do .That won't work everywhere many of those are also prepared for the takers.

_________________
"AMERICANS Used To ROAR Like LIONS For LIBERTY,- NOW They BLEAT Like SHEEP For SECURITY."- ~~ Norman Vincent Peale-______ ~~ COPS ARRIVE IN TIME TO DRAW CHALK LINES , ~~~IT'S UP TO YOU TO SEE THE OUTLINE ISN'T AROUND YOU ~~.


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