A123 Systems is the bankrupt lithium-ion automotive battery company that has received bids from at least three foreign rivals. The company was partially funded by the U.S. Department of Energy. Johnson Controls of Milwaukee and Wanxiang Group Corporation of China both sent out their bids for A123. Two other bidders that recently joined the auction include NEC Corporation of Japan and Siemens AG of Germany.
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A123 Systems is the bankrupt lithium-ion manufacturing company that received a $249 million grant from the Energy Department. Now the U.S. government is saying that A123 cannot be sold without their consent. Two of A123’s bidders are Johnson Controls and Wanxiang Group Corp. If a Chinese-based rival Wanxiang owned a U.S. government backed company, then it would be pretty awkward given that offshoring was a hot ticket issue in this past election.
A123 Systems is the bankrupt electric-car battery company that received a $249.1 million federal grant and won the court approval to borrow $50 million from Wanxiang Group in China. The U.S. Bankruptcy Judge Kevin Carey gave interim approval for the loan on Monday in Wilmington, Delaware. Wanxiang is actually replacing Johnson Controls as the lender for A123’s Chapter 11.
A123 Systems Inc. (NASDAQ:AONE) is a company that manufactures advanced lithium-ion battery systems for the automotive and electric grid sectors. Today the company has announced that Johnson Controls Inc. (NYSE:JCI) will buy the company’s automotive assets in a transaction that is valued at $125 million. Johnson Controls will gain ownership of A123’s automotive technology, products, and customer contracts. They will also gain ownership of A123’s facilities in Livonia and Romulus, Michigan along with the cathode powder manufacturing facilities in China and A123’s equity interest in Shanghai Advanced Traction Battery Systems Co., which is A123’s joint venture with Shanghai Automotive.
Thanks to tax credits and incentives Johnson Controls is revamping an old factory in Holland, Michigan in order to build batteries for hybrid cars for Ford, BMW, and Azure Dynamics.
“Battery technology is strategically important to the future of the U.S. automotive industry and the economy at large,” stated Alex Molinaroli, President of Power Solutions at Johnson Controls. “Our first U.S. plant will bring about 500 jobs to Michigan, and many additional jobs through suppliers and the businesses these employees will support. It is a key element of our broader strategy and commitment to the hybrid vehicle industry in North America.”
The cost of the renovation is about $220 million, but with tax credits the cost will end up costing $71.4 million. This will save Johnson Controls $148.5 million. Currently General Motors orders batteries from LG in South Korea and Chrysler orders batteries from A123 Systems in Massachusetts.
[via Green Sheet]