Skip to comments.A123 Systems Won't Get Rest of Federal Grant if Owned by Chinese Company
Posted on 12/12/2012 10:12:12 AM PST by Ernest_at_the_Beach
A123 could lose the rest of its $249 million grant
We can put this under the "Duh" files: A123 Systems won't receive the remaining amount of its federal grant if Wanxiang Group is approved as the new owner.
According to Reuters, which spoke to an unnamed official from the U.S. Department of Energy (DOE), the DOE will cut A123 off from its $249 million grant the company received in 2009. A123 has only used $133 million of the grant so far.
The official, who noted that all parties were aware of this consequence during last weekend's auction of A123, said that the grant requires equipment and facilities funded by taxpayers to stay in the United States.
DOE also has the right to compensation if it doesn't approve of Wanxiang's purchase of A123. Wanxiang Group said it would respect the DOE's wishes, no matter the outcome.
Many have been very critical of A123's purchase by a Chinese company. Some concerns include the fact that taxpayer dollars were wasted on a grant for a company that is now in China's hands, and the fact that A123 has contracts with the U.S. Department of Defense (meaning, China could potentially get a hold of sensitive U.S. military information).
However, Wanxiang Group didn't purchase the government contracts with the DOD; Illinois-based Navitas Systems did for $2.25 million.
Chinese firm Waxniang Group won the auction for A123 Systems on Saturday for about $260 million. The sale is expected to be approved by the Delaware Bankruptcy Court today.
Back in mid-October, A123 Systems officially filed for bankruptcy and agreed to sell its automotive business assets to Johnson Controls -- a company that optimizes energy efficiencies in car batteries, buildings and electronics. However, Johnson Controls clearly lost the bid to Wanxiang last weekend. If the sale for Wanxiang isn't approved, Johnson Controls said it would like to bid again.
Before October's bankruptcy filing, A123 was missing its loan payments. It had received $249.1 million in grants from the U.S. government in 2009 to develop green, electric car batteries. It was discovered that the U.S. government gave A123 a $1 million grant the day it filed for bankruptcy.
A123 Systems suffered a huge kick earlier this year when it announced a $55 million battery replacement program for Fisker Automotive's Karma. The vehicle had issues with the batteries' hose clamps.
This Chinese deal really ought to be DOA, given the Pentagon-related R&D.
The Chinese are interested in the technology and the R & D , not necessarily for the money.
This is a Bernie Schwartz ( Loral Space and Communications) moment redeux .
I'm really surprised the DOE isn't going to shell out the balance of the grant to the Chinese company.
Hopefully the sale to Wanxiang will not be approved and Johnson Controls or some other American company will get it, the Chinese are after the technology.
Why in hell would our federal government pour more money down a bankrupt shithole, when it’s clear we’ll never get paid back??
We must live in bizzaro land!
There is probably some crony Obama Bundler somewhere in the chain that expects payment on his efforts to get Obama reelected.....
The Chinese already have the money. The difference is only that in this case Obama will not borrow it to immediately return.
Im willing to wager they will.
Lets check this story and details in about a years time...
The federal government has no business of granting money to anyone in the first place, Who did they steal it from?
Headline: “A123 Systems Won’t Get Rest of Federal Grant if Owned by Chinese Company”
Isn’t that racist?
Gotta ask because I lost my copy of the playbook.