Oct 17

A123 Systems Files Bankruptcy; Agrees To Be Sold to Johnson Controls, Inc

 

After stating in a regulatory filing yesterday it could not meet debt obligations, and was headed toward bankruptcy, ailing battery maker A123 Systems, Inc.. has announced it has agreed to be sold to Johnson Controls, Inc. (JCI).

The $125 million purchase agreement will prevent the assets and intellectual property of the government subsidized company from going to China’s largest auto parts maker, which intended to invest as much as $465 million which would have entitled it to an 80-percent share of A123.

“We believe the asset purchase agreement with Johnson Controls, coupled with a Chapter 11 filing, is in the best interests of A123 and its stakeholders at this time,” said David Vieau, Chief Executive Officer of A123. “We determined not to move forward with the previously announced Wanxiang agreement as a result of unanticipated and significant challenges to its completion.
 

A123-Passenger-Automotive 

Since disclosing the Wanxiang agreement, we have simultaneously been evaluating contingencies, and we are pleased that Johnson Controls recognizes the inherent value of our automotive technology and automotive business assets. We are also pleased that we have received indications of interest that recognize the value of our grid and commercial businesses. We are encouraged by the significant interest we have received, as multiple parties have submitted proposals for these businesses. As we move through this transaction process, we expect to continue operating and working with customers and suppliers.”

Under the terms of the agreement, JCI will acquire A123′s automotive business assets, including all of its technology, products and contracts with customers.

One of its customers is Fisker Automotive, with which A123 suffered a severe financial setback this year following a recall for Karma propulsion batteries. Another is General Motors, which is engineering its pending Spark EV to utilize A123 technology.

Yesterday GM’S Kevin M. Kelly, Manager, Electric Vehicle and Hybrid Communications, offered no comment whether A123 batteries systems would still be used assuming the JCI deal goes through.

Others have speculated that it will, but this remains to be seen.

A123’s regulatory filing declared it won’t be able to pay an interest installment due yesterday on $143.8 million in obligations expiring 2016, nor will it make a $2.76 payment due yesterday on outstanding 6 percent notes.

It has suffered 14 consecutive quarterly losses and seen its stock price slashed by 85 percent.
 

The Deal

 
 

The agreement with JCI includes A123’s facilities in Livonia and Romulus, Mich. and its cathode powder manufacturing facilities in China along with its equity in Shanghai Advanced Traction Battery Systems Co., A123′s joint venture with Shanghai Automotive.

The purchase further includes provisions through which Johnson Controls intends to license back to A123 technology for its grid, commercial and government businesses.

A123 said it is also continuing ongoing talks regarding strategic alternatives for its grid, commercial, government and other operations, and has received several indications of interest for these businesses.

Yesterday A123 and its U.S. subsidiaries all filed voluntary Chapter 11 petitions for reorganization at the U.S. Bankruptcy Court in Delaware. This action did not include its non-US companies.

The aim of this move was to facilitate the transaction with JCI for an orderly sale of A123’s automotive and other U.S. assets and maximize value for shareholders.

A123 has also received a $72.5 million commitment form JCI for “debtor in possession” financing to allow its continued operations pending finalization of the sale.

It has also filed to necessary court authorization requests to continue business operations during the bankruptcy and sale which would include paying salaries and benefits.

The transaction is being viewed by JCI as a win – if not actually a windfall. In any case, Alex Molinaroli, president, Johnson Controls Power Solutions offered an official statement:

“Our interest in A123 Systems is consistent with our long-term growth strategies and overall commitment to the development of the advanced battery industry,” Molinaroli said. “Requirements for more energy efficient vehicles continue to increase, which is driving automotive manufacturers to pursue new technologies across a broad spectrum of powertrains and associated energy storage solutions. We believe that A123′s automotive capabilities are a good complement to our existing portfolio and will further advance Johnson Controls’ position as a market leader in this industry.”
 

Political Train Wreck Avoided?

 
 

Did A123 narrowly avoid being labeled “the next Solyndra?” While too soon to tell what the publicity fallout will be, it would appear the sale to Johnson Controls, a company begun 127 years ago in the U.S. and major supplier today, will prevent the brunt of criticism that would have come if A123 sold to the Chinese.

The politicized element of A123’s financial woes have not been lost on House Republicans and others given in 2009 the company received a federal grant of $249.1 million.

We have seen how some have decried the prospect of the government betting on “winners and losers” following the September 2011 bankruptcy filing for solar panel maker, Solyndra.

Even an otherwise advocate of alternative energy and champion of the Chevy Volt, former General Motors Vice Chairman Bob Lutz, has had things to say about A123 such as in an August Forbes editorial where he warned the government can’t mandate a market and A123 was ceding technology to Chinese interests.

Not long after the news broke yesterdy, the advocacy group Plug In America offered a commentary as well, perhaps as preemptive to more criticism that may follow by those who will spin the A123 deal as falling short of a success story for the Massachusetts company.

“Government can help facilitate innovation, but the natural business cycle remains – some failures in any emerging industry are inevitable,” said Jay Friedland, Plug In America’s legislative director. “Yet, our country is experiencing tremendous success as we electrify transportation. A raft of companies – Johnson Controls, Envia, Saft, GM, and LG Chem among them – are making great strides in driving down battery costs while creating a U.S.-based manufacturing sector for battery technology. This drives down the cost of plug-in vehicles while creating jobs and keeping at home the $1-billion per day we’re currently sending overseas for oil, creating a better, safer America.”

Plug In America offered also “other key considerations” from the U.S. Dept. of Energy:

“The advanced battery market is expanding dramatically in the United States and around the world — from $5 billion in 2010 to nearly $50 billion in 2020, an average annual growth rate of roughly 25 percent,” it said.

And whether some try to spin a partisan divide, this is not true according to the advocacy group which has tracked its progress from the beginning:

“A123’s promising technology has a long history of bipartisan support. In 2007, the company received a $6 million dollar grant as part of the Bush Administration’s efforts to promote advanced battery manufacturing,

Prior to this investment, Plug In America continued, a battery with a 100 mile range cost $33,000. Because of technology improvements and the high volume manufacturing capability we have today, the estimated cost is down to about $17,000 and is expected to drop to $10,000 by 2015. As costs come down even further, the market for hybrids and electric vehicles – which has nearly doubled in the U.S. since last year – will grow even further.”

So while electrified vehicle advocates are bracing themselves for accusations of “failure” such as were uttered in the presidential debates by the Republican side pertaining to Tesla, and Fisker, proof does exist, says Friedland, that significant progress was made on the government’s investment.

We’ll have more news for you as developments come forth.

This entry was posted on Wednesday, October 17th, 2012 at 5:55 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

COMMENTS: 59


  1. 1
    nasaman

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    Oct 17th, 2012 (6:53 am)

    Great article, Jeff …and exceptionally good news because it means Johnson Controls, an established heavyweight in automotive batteries having the necessary technical savvy and financial muscle to bring the superior A123 battery chemistry to car makers, should make EVs/EREVs even more viable!


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    Oct 17th, 2012 (7:08 am)

    Good coverage, Jeff. Given the trade disputes with China, coupled with the Federal grant money the firm has received, the sale to Johnson Controls is preferable than to Wanxiang.

    Just how much criticism will be avoided is dubious; oil and gas funded right wing politicians are bellicosely critical of any energy source other than oil and gasoline. The national interest only appears in their dialogue when it benefits the oil and gasoline industry.


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    Roy_H

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    Oct 17th, 2012 (7:40 am)

    The aim of this move was to facilitate the transaction with JCI for an orderly sale of A123’s automotive and other U.S. assets and maximize value for shareholders.

    Doesn’t bankruptcy mean that the shares become worthless? I believe this is true of common shares but not necessarily true of preferred shares. So is there someone here who can clarify if the shareholders mentioned are only preferred shareholders?


  4. 4
    Mark Z

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    Oct 17th, 2012 (7:53 am)

    Reminds me of the Jackson 5.

    A B C , It’s easy as
    1 2 3 , as simple as
    do re mi, A B C , 1 2 3
    It’s renamed J C.


  5. 5
    MrEnergyCzar

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    Oct 17th, 2012 (7:59 am)

    For every Solyndra there are more winners than losers…. I’m surprised this didn’t come up in the debate last night. If oil companies were smart, they would be the ones owning all the battery companies….

    MrEnergyCzar


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    joe

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    Oct 17th, 2012 (8:06 am)

    Great story! I remember when it was thought that A123 had the best chemistry in battery technology and people were surprised when GM did not pick them for the Volt battery.

    I’m happy A123 will remained with a great American company, because EV batteries will become a huge industry in the near future.


  7. 7
    Frank

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    Oct 17th, 2012 (8:16 am)

    I’m sure Fox News will spin this information in whatever negative way they choose. Whatever it takes to enrage all their dittoheads. Now my neighbors will tell me that GM will quit making the VOLT because they can’t buy batteries for them and my car is worthless, as they go to the gas station and fill up the SUV with another 150 dollars of gas…


  8. 8
    Nelson

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    Oct 17th, 2012 (8:37 am)

    “The aim of this move was to facilitate the transaction with JCI for an orderly sale of A123’s automotive and other U.S. assets and maximize value for shareholders.”

    I feel sorry for share holders who will likely get nothing in return for the faith and trust they put in a company that could have been a shining example of American ingenuity.

    Alliancebernstein L.P. held 20,000,000 shares on 06/30/2012
    Aristeia Capital LLC held 26,556,000 shares on 06/30/2012
    BlackRock Fund Advisors held 2,352,212 shares on 06/30/2012
    BlackRock Institutional Trust Company, N.A. held 2,985,758 shares on 06/30/2012
    Condor Capital Management held 177,870 shares on 09/30/2012
    GENERAL ELECTRIC COMPANY held 7,372,744 shares on 06/30/2012
    Global X Management Company LLC held 3,844,640 shares on 06/30/2012
    GOLDMAN SACHS GROUP INC held 1,150,367 shares on 06/30/2012
    Invesco Ltd. held 3,124,725 $3,937,153 shares on 06/30/2012
    Lazard Asset Management LLC held 20,625,000 shares on 06/30/2012
    Lord Abbett & Co. LLC held 14,150,000 shares on 06/30/2012
    Mount Kellett Capital Management LP held 1,631,191 shares on 06/30/2012
    NORTHERN TRUST CORPORATION held 1,450,656 shares on 06/30/2012
    Penseco Financial Services Corp held 200 shares on 09/30/2012
    Schwab Charles Investment Management Inc held 245,900 shares on 09/30/2012
    VANGUARD GROUP, INC. (THE) held 5,500,243 shares on 06/30/2012
    Wolverine Asset Management LLC held 15,600,000 shares on 06/30/2012
    Zazove Associates LLC held 9,200,000 shares on 06/30/2012

    NPNS!
    Volt#671


  9. 9
    Tim Hart

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    Oct 17th, 2012 (8:46 am)

    Way to go Johnson Controls!


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    stuart22

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    Oct 17th, 2012 (10:51 am)

    Good news; I was dismayed over the Chinese getting involved with A123.


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    Texas

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    Oct 17th, 2012 (11:10 am)

    The reason why green technology seems like a failure is due to the continued low price of fossil fuels. Yes, fossil fues are getting more expensive but they were still pre-manufactured by Earth over millions of years and resource extraction companies are not starting from scratch. Humans still just have to just pump the best mobile liquid fuel out of the ground, nearly ready for use.

    The same goes for US green industries. The reason why A123 and other companies are going under is not due to products that don’t work but due to China and their strategy to own the markets. Their government has billions to spend to kill the competition and they are spending it.

    It is a similar strategy big box stores like Walmart have been using for decades – come in, cut prices and kill off the local competition. US companies with their high regulations, high labor costs and high taxes will not be able to compete against China because the Chinese government is doing what it takes to win. It is that simple and there is nothing that can be done about it until fossil fuels become too expensive for transportation costs to be ignored.

    By then, it may already be too late as China will own the green markets and have more advanced technology and will not need low labor costs and government help anymore, just like Microsoft doesn’t need such help. Microsoft’s established ecosystem stands like a castle fortress.


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    lousloot

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    Oct 17th, 2012 (11:40 am)

    #8 Oh SH*T! thats my 401k!

    VANGUARD GROUP, INC. (THE) held 5,500,243 shares on 06/30/2012

    gmmt should have done a DARPA grand battery challenge instead of … (insert republican talking points here…) lol


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    Noel Park

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    Oct 17th, 2012 (11:55 am)

    It will be interesting to see what happens with the Spark. It’s a comfort to know that GM has such a robust battery testing capability. At least it seems unlikely that they will get involved in a Fisker like disaster.


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    pjkPA

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    Oct 17th, 2012 (12:13 pm)

    Good to see this company staying American… bad if sharholders are the losers.

    “The politicized element of A123’s financial woes have not been lost on House Republicans and others given in 2009 the company received a federal grant of $249.1 million.”

    It is a disgusting how we vilify our American companies while we give many billions to Toyota Honda VW Hyundai etc every year … as in NOT PAYING US TAXES at the plants they open here and no import duties while they put a $20,000 VAT tax on anything we try to sell in their country!


  15. 15
    James

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    Oct 17th, 2012 (12:30 pm)

    So glad to see Romney didn’t use this as another EV punching bag last night in the debate. Fox jumped on it early yesterday – ( my wife is addicted to Faux News )… The anchor detailed A123′s bankruptcy and segued into a rant on electric cars, saying …”this just reinforces the fact that electric cars-the Chevy Volt are huge sales failures” – “PEOPLE JUST DON”T WANT THESE THINGS – PEOPLE JUST DON’T WANT ELECTRIC CARS!”…. Sure, they forgot to fact-check that the Volt outsold all hybrids with a plug and has had record sales numbers in August and September…and he’s certainly NOT speaking for me…

    Surely Fox’s fans don’t know Saudi Prince Alwaleed bin Talal owns a 7 percent stake in News Corp, the parent company of Fox News.

    So gee….why would they be against electric cars? Hmmmm…

    I’m a conservative – yet I cheered when Obama said that Romney’s energy plan was written by the oil companies. If you go to Romney’s website – it appears this is completely and unabashedly the truth.

    RECHARGE! ,

    James


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    Frank

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    Oct 17th, 2012 (1:05 pm)

    James,

    After what Faux has done with the VOLT I can’t even be in the same room with the TV on that channel. Facts!?!? we don’t need not stinkin’ facts!


  17. 17
    Tim Hart

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    Oct 17th, 2012 (1:14 pm)

    In the short term increasing our domestic supply of petroleum is a good thing–the idea is to eliminate imported oil. That would create jobs and boost our economy bigtime and at the same time reduce the trade deficit and defund terrorism. There will still be a huge push to increase efficiency in the energy sector and EV’s will be at the forefront of that effort. But by far the most important short term goal is to eliminate imported oil.


  18. 18
    James

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    Oct 17th, 2012 (1:48 pm)

    Tim Hart:

    In the short term increasing our domestic supply of petroleum is a good thing–the idea is to eliminate imported oil. That would create jobs and boost our economy bigtime and at the same time reduce the trade deficit and defund terrorism. There will still be a huge push to increase efficiency in the energy sector and EV’s will be at the forefront of that effort. But by far

    Tim Hart:

    Tim, you say – “increasing our domestic supply of petroleaum is a good thing-the idea is to eliminate imported oil” YOU DO HAVE TO BE KIDDING – RIGHT?

    The “idea” is to fool you and I into believing this is some kind of solution – it isn’t.

    SHORT TERM emphasized. Don’t buy the garbage that first, darn it, we need to start drilling one mile off our pristine coastlines, and dang it, first we need to pipe tar sands oil down from Canada, and dadgum it – we need to turn Alaskan government parkland into seives searching for crude….

    It just aint so…In fact, the GOP’s platform of “drill baby drill” of 2008, has only recieved a vocabulary makeover, and is now labeled “American Energy Independence”…. what a farce! Why? Because back in 2008 when I was only a year on in researching the then new concept Volt – it was proven my experts that if we drilled baby back then, it wouldn’t still meet any more than approx 20% of the need at present. It takes five to ten years to explore, then develop a productive drilling platform – and tomorrow’s USA energy needs will be much higher than today’s. So the whole drill today – jobs tomorrow mantra is horribly flawed.

    Before anyone negs me – add the entire problem of refining. Notice not one candidate on either side has even mentioned the word. Why? There are zero, count ‘em, 0 plans today to build or develop even one more refinery on U.S. soil. You see, the big oil companies are even shutting down current refineries and buying up independently-run refineries and shuttering them. It’s called price control and you and I are victims at the pump. You know I’m correct when you follow what oil companies say, and even though they tell the press they just don’t have enough refining capacity – no new refineries are scheduled to be built. You also know they’re full of crap when you live near a refinery and see them shut it down for maintenance ( Washington State ) and your local price of gas goes up to the highest or near highest in the USA for a year!

    During 2008 in June, the peak of the advertised oil “shortage”, Chevron was caught filling up a tanker at Long Beach harbor with DOMESTICALLY SOURCED CRUDE and sending it to S. America! When busted by the government ( info from a dock worker whistleblower ) they had to pay a fine of $2 million dollars – a pittance of the profit they made from selling the oil! Remember, they had told a Congressional panel in 2008 that they had to raise prices to the consumer because they had shortages!

    Let’s talk profits. Check the financials. If all else has not convinced you that we’re getting fleeced by oil companies and politicians who have been paid off by oil companies and countrys who supply us oil….Just look at the bottom line. Every qtr. oil companies claim record profits… it’s supply and demand baby. Yet this is a non-renewable resource – look only to former oil producing giant states like Oklahoma and Texas for stories of how oil barons raked the lands for oil, then, after wells dried up, they set forth drilling lakes and bodies of water only to dry up all those underground reserves – continuing to rape the lands until literally they could find no more. Look to Mexico where “Peak Oil” was reached in 2009.

    To say that oil is a “short term solution” is a farce. It’s non-renewable and we’re being bilked daily for use a refined version of it in our cars. Meanwhile our government subsidizes oil companies to keep up the madness with your tax money!

    I’ll leave you with an analogy/comparison. The same argument you suggest ( and the one fronted by Romney and friends ) was given to major cities ( like Seattle ) re: public transportation. The push decades ago was to insert light rail, and subways into the city to relieve gridlock on the highways and to pre-emptively escape disaster later, when populations increased. Folks began campaigns to stop development of new transportation solutions because “it was too darned expensive” – just like folks today are suggesting developing solar, wind , wave, fuel cell and geo thermal energy solutions are too expensive to be investing in.

    Just like today with energy — these contrarians who’se argument against progress was that the old system of cars and buses was just fine and the solution was far too costly – WERE WRONG! Too little foresight gave us what we have today. The same transportation solutions are being built because the congestion and gridlock on the roads has the cities dying in a standstill. The result? The same systems that would have been expensive have astronomical prices today, costing cities dozens of billions of dollars for what could have cost them a mere pittance of that if they had not listened to the cheapies.

    This is false economy at it’s worst. Don’t ever look at the old energy efforts of squeezing all the remaining fossil fuels from our lands AT ALL COSTS ast some kind of solution. It isn’t.

    RECHARGE!

    James


  19. 19
    James

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    Oct 17th, 2012 (2:12 pm)

    I’d just like to add to my argument – the BP Disaster. Is this how we need to treat our environment?
    Tim, do you really believe the BP ads on TV saying “come on down to the Gulf Coast, it’s all clean now!” ???

    It’s B.S.. The reprocussions to our worldwide environment of the Gulf spill will never be measurable by man, but you can bet those pollutants that spewed from the ocean’s bottom many miles down will be felt , and even eaten in the bellies of humans for over a century. The sheer amount of pollution belched into the seas by a travesty such as we watched for two months is immeasurable.

    This was JUST ONE OIL MISHAP. Oilies argue that it happened because the government is restricting them to search for oil in deep waters. They say had this happened in a near-shore rig they would have had it cleaned up in a week! Well – I’ve been to a “resort” in Singapore where they built fake islands out from the beach to try and hide the visual graffiti of dozens of tall smokestacks belching black smoke from oil refineries not far away! The G.O.P. is saying that we need to open up near shore drilling off fhe coasts of Virginia, California, Washington and Alaska. So hey, let’s take the family on a nice visit to the sandy beach, we’ll set up our umbrella and towels and just revel in the beautiful scenery of oil platforms on the horizon as far as the eye can see.

    Exxon Mobile actually PROFITED from the 1989 Valdez Alaska oil spill! After all was said and done – they recieved so much government assistance in their “cleanup” effort – they pocked a $9,000,000 profit! If you think that this oil spill from one tanker was cleaned up…Ask the fishermen who still cannot work there because oil-tainted salmon still wash up on shore. Ask the displaced or unemployed families who’se entire lives were ruined, and who were paid off a few thousand dollars to just shut up and get on with it. Truly, Valdez Alaska was decimated by this spill and never recovered. 11 million gallons of spilled oil – not even a drop in the bucket compared to the BP mess.

    You see, at what point are you willing to prostitute yourself, and the earth we live in – to drive your car, and receive your goods from transportation that is fueled by fossil fuels?

    This is a legitimate question you and I need to ask ourselves – then take it to your Congressperson.

    You take it in the rear financially – then say “Mommy may I” as you willingly take it to the very planet that sustains us.

    RECHARGE! ,

    James


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    Noel Park

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    Oct 17th, 2012 (2:24 pm)

    James: I’m a conservative – yet I cheered when Obama said that Romney’s energy plan was written by the oil companies. If you go to Romney’s website – it appears this is completely and unabashedly the truth.

    #15

    Thank you. +1


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    Noel Park

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    Oct 17th, 2012 (2:29 pm)

    James: This is false economy at it’s worst. Don’t ever look at the old energy efforts of squeezing all the remaining fossil fuels from our lands AT ALL COSTS ast some kind of solution. It isn’t.

    #18 & #19

    Well I’ve gotta put in with you on both counts. +1 to both. You’re on a roll today Jimbo!


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    Oct 17th, 2012 (3:37 pm)

    Noel Park: It will be interesting to see what happens with the Spark. It’s a comfort to know that GM has such a robust battery testing capability. At least it seems unlikely that they will get involved in a Fisker like disaster.

    Hopefully Tony P. is cleaning up that mess.


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    Oct 17th, 2012 (3:45 pm)

    Well I hope GM’s rollout for the next EV (Chevy Spark) will suffer no delays, because I still can’t buy a Volt and October is half gone. BTW, does GM buy A123 batteries for their “eAssist” hybrids, or those are from another source?

    I believe GM has a backup plan to buy complete batterie packs and individual cells from LG Chem just in case this happened. Then they just have to put the new cells into the correct size and array for each application: BEV (Spark), EREV (Volt, ELR) and eAssist (Regal, LaCrosse, Malibu), and so on.


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    James

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    Oct 17th, 2012 (4:26 pm)

    What’s really bizarre, is listening to Canadian consumers complain about being shafted at the pump for a litre of petrol.

    Being that Canada is second only to Saudi Arabia in total oil reserves, and that Canada is the USA’s top importer of crude – you’d think their citizens would be given a break from the huge peaks and valleys in gas prices that keep Americans re-calculating their annual family budgets…but no…

    Canadians complain that their oil industry is giving them the shaft as well.

    Kinda makes you think that America producing MORE OIL is our big solution – doesn’t it?
    ( BIG SARCASM )

    RECHARGE! ,

    James


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    Uncle Rollo

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    Oct 17th, 2012 (4:27 pm)

    Flame suit on, as a right winger and Volt fan, this is exactly the same process that GM should have went through instead of a bailout. GM would have been taken over and remained in business. The Volt could have stood on its own merits.

    I’m with Tim, drill baby drill. Sure it wont give us independance tomorrow, but neither will not drilling or anything else. Patience, grasshopper! It’s been 10yrs in the making for the oil in NDak. We need to start now for oil later and to pressure the price down. It will also create thousands of much needed jobs if not more. Not just at the site, but think of all the equipment that needs to be manufacture, etc.

    ANWR was created with an area set aside for oil exploration. Now, thanks to the Dems, that area is off limits. Just under 8% was specifically set up for oil. Imagine having a 20 acre lot. Only 1.5 acres would be disturbed, the rest left alone. That is ANWR.

    How can you compare Singapore with the US? Nobody said to do away with the EPA. The clean air/water rules would still apply. Let businesses get to work. If it ins’t made here, it’s made overseas where the EPA doesn’t apply.

    Finally, if it’s ok for the government to pick companies to spend taxpayer (mine) money on, then you wont have any objections if the next president, who will be a Republican, does it?

    Rollo


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    Oct 17th, 2012 (4:33 pm)

    Raymondjram: BTW, does GM buy A123 batteries for their “eAssist” hybrids, or those are from another source?

    Hitachi

    Generation II BAS (eAssist)

    At the LA Auto Show, on November 15, 2010, General Motors announced that it would be releasing an all-new version of the BAS system available in the 2012 Buick LaCrosse.[8] While still a Belted Alternator Starter system, the system is named eAssist and includes a larger more powerful Hitachi-supplied 115 Volt Lithium Ion battery and a 15 kW (20 hp) motor-generator that delivers 79 lb·ft (107 N·m) of torque. The additional power provided by the more powerful battery and motor provides the ability to contribute more power, and more often able to electrically start and assist the 2.4L engine. The eAssist system also includes a specially modified GM 6T40 6-speed automatic FWD transaxle


  27. 27
    kdawg

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    Oct 17th, 2012 (4:51 pm)

    Uncle Rollo: Flame suit on, as a right winger and Volt fan, this is exactly the same process that GM should have went through instead of a bailout. GM would have been taken over and remained in business.

    Let’s see, who’s buying A123 = Johnson Controls. Who was going to go down w/GM/Ford/Chrysler if the auto industry had collapsed = Johnson Controls. Who had any $ to invest at that time of the auto industry collapse = No one.

    Saving the auto industry and A123 going bankrupt, are not the same situation, or the same scale, and didn’t occur in the same credit environment. I could paint you a grim picture of the fallout of letting our manufacturing base disappear, but I would hope you know this scenario already. To say “they would have remained in business” is a joke.


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    kdawg

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    Oct 17th, 2012 (4:54 pm)

    Uncle Rollo: Finally, if it’s ok for the government to pick companies to spend taxpayer (mine) money on, then you wont have any objections if the next president, who will be a Republican, does it?

    George Bush gave 6 million to A123.

    How many billions do we give to oil companies?
    How many trillions do we spend defending oil?

    We need a different fuel, not more of it.


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    Tim Hart

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    Oct 17th, 2012 (4:57 pm)

    Energy independence is an EXTREMELY important goal and it can be done responsibly. We have the technology to safely increase our domestic energy resources which is FAR better than importing arab oil.


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    CaptJackSparrow

     

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    Oct 17th, 2012 (5:36 pm)

    I’m going to get -1 votes so here it goes….

    WTF is the big deal about the IP? They are already manufacturing them in China aren’t they?!?!?!?
    Remember when they found out that the defective cells (that were in the Karma) were manufactured in the US facilities? so they shifted more of the manufacturing to their China facility? They already have the IP, but that’s JMHO.


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    George S. Bower

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    Oct 17th, 2012 (6:09 pm)

    Noel Park: #18 & #19

    Well I’ve gotta put in with you on both counts.+1 to both.You’re on a roll today Jimbo!

    Totally agree.
    Way to go James!


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    Noel Park

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    Oct 17th, 2012 (6:11 pm)

    kdawg: To say “they would have remained in business” is a joke.

    #27

    Tell it like it is brother! +1


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    George S. Bower

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    Oct 17th, 2012 (6:18 pm)

    kdawg: .Who had any $ to invest at that time of the auto industry collapse = No one.

    Saving the auto industry and A123 going bankrupt, are not the same situation, To say “they would have remained in business” is a joke.

    Exactly. This is the point that is lost in the typical anti bailout arguement.

    Besides, the bailout was started by W anyway….and if MCain had been elected the bailout would have happened either way.

    Get over with this discussion about anti bailout.


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    Noel Park

     

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    Oct 17th, 2012 (6:18 pm)

    Tim Hart:

    Energy independence is an EXTREMELY important goal and it can be done responsibly.

    #29

    The Colbert Report or somebody had a great film montage a few months ago of EVERY SINGLE Presidential candidate, both Democrat and Republican, going back at least to Jimmy Carter, if not before, proclaiming their commitment to “energy independence”.

    Hasn’t happened yet and I predict that the likelihood of it happening any time soon, no matter which one of the current guys gets elected is somewhere between slim and none. And what is it they say? “Slim is on life support”.


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    Oct 17th, 2012 (6:20 pm)

    George S. Bower: Get over with this discussion about anti bailout.

    #33

    God send that it shall be true. +1


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    Oct 17th, 2012 (6:22 pm)

    CaptJackSparrow:

    WTF is the big deal about the IP? They are already manufacturing them in China aren’t they?!?!?!?

    Yeh, I thought China had already stolen A123′s chemistry. If you want a cheap FE battery they are all from China.


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    Oct 17th, 2012 (6:48 pm)

    George S. Bower: Yeh, I thought China had already stolen A123′s chemistry. If you want a cheap FE battery they are all from China.

    About 80% of LiFePO4 cells come from China.


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    Koz

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    Oct 17th, 2012 (6:53 pm)

    Tim Hart:
    In the short term increasing our domestic supply of petroleum is a good thing–the idea is to eliminate imported oil. That would create jobs and boost our economy bigtime and at the same time reduce the trade deficit and defund terrorism. There will still be a huge push to increase efficiency in the energy sector and EV’s will be at the forefront of that effort. But by far the most important short term goal is to eliminate imported oil.

    No! By far, the most important thing is to destroy the command that oil has over our domestic economy and that of the world as a whole. In doing that, all of the other good things follow such as eliminating or making the net oil products trade deficit to a negligible amount. The only way to destroy the overarching influence of oil is to substitute for it at a faster pace than growth occurs.

    Pushing domestic supply is fine as a part of a short term band aid for the trade deficit but does next to nothing unless the extra supply outstrips world demand. Ain’t gonna happen unless the world economy is seriously tanking like in late 2008, early 2009.

    I was surprised at the lack of depth and hollow responses to this issue in last night’s debate. They spent a lot of time and were asked in several ways to describe governments role in oil prices. I was disappointed by both candidates’ responses but particularly surprised at the lack of understanding and response from Romney. Were they both afraid to say it isn’t governments to set gas prices? Sure, the strategic reserves could be used as a short term solution for an extreme economic emergency but that is dangerous and does nothing for the long term. Sure they can review regulations and consider other stimulus to encourage more exploration but that encourages unwise risk taking and does anyone really believe that worlds elixir for oil supply just happens to be magically located under public lands AND 8 years of the Chaney/Bush admin couldn’t access it (nor preceding republican administrations that held office 12 of the previous 20 years). Both candidates made mention of increasing exporation and overall US production has actually gone up the past few years as they both acknowledged but yet prices really haven’t gone down. In fact the high prices are the biggest driver for the slight uptick in domestic production because it is mostly high cost, tight oil that is left to be extracted domestically.

    It’s not a big secret and I’m shocked they failed to mention that oil is a fungible commodity, that is traded on a world market. It is also closely linked with world currencies, starting with the dollar, or perhaps I should say the currencies are closely tied to oil. This means, unless there is something hugely wrong in the world economy, oil will remain a commodity on the world market. Let’s hope it remains this way and our Presidents continue to assert no short term or direct control over oil prices, the alternative is far worse.

    Bottom line is that US economy and world economy is basically capped by oil prices and will continue to be so until there are enough suitable alternatives. While both spoke of all of the above approaches in the debate, I did not hear enough urgency or general understanding of the issues from either candidate. I will say, Obama’s policies and comments are less further from what I prefer.


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    Oct 17th, 2012 (7:01 pm)

    George S. Bower: Yeh, I thought China had already stolen A123′s chemistry. If you want a cheap FE battery they are all from China.

    They stole their original formula but not their newer stuff as I understand it.


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    kdawg

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    Oct 17th, 2012 (7:18 pm)

    Noel Park: The Colbert Report or somebody had a great film montage a few months ago of EVERY SINGLE Presidential candidate, both Democrat and Republican, going back at least to Jimmy Carter, if not before, proclaiming their commitment to “energy independence”.

    It was Jon Stewart on the Daily Show. Good stuff.

    (from June 2010)
    http://www.thedailyshow.com/watch/wed-june-16-2010/an-energy-independent-future
    energypolicy.jpg


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    Oct 17th, 2012 (7:28 pm)

    Koz: and does anyone really believe that worlds elixir for oil supply just happens to be magically located under public lands AND 8 years of the Chaney/Bush admin couldn’t access it (nor preceding republican administrations that held office 12 of the previous 20 years).

    #38

    Not me, LOL! +1

    Awesome comment!


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    Oct 17th, 2012 (7:31 pm)

    kdawg: It was Jon Stewart on the Daily Show. Good stuff.

    #40

    You are the man! Well done. +1

    Yeah, I forgot about Jerry and “The Trickster”, LMAO.

    My mother always used to sing a line from an old pop song:

    “Seems to me I’ve heard that song before”


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    N Riley

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    Oct 17th, 2012 (7:33 pm)

    Not the end I would have liked for A123, but being with Johnson Controls is so much better than letting a foreign (Chinese or other) company gain control and access to their battery technology.

    Good report, Jeff.


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    Raymondjram

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    Oct 17th, 2012 (7:37 pm)

    Tim Hart:
    Energy independence is an EXTREMELY important goal and it can be done responsibly. We have the technology to safely increase our domestic energy resources which is FAR better than importing arab oil.

    This can be done by substituting oil with a renewable or non-contaminating source. Obviously it can’t be done overnight or even in four years, but we have to begin now. And the first step is to eliminate oil consumption for transportation and for electrical power generation. Later we have to eliminate all oil consumption (import and domestic) and finally all coal and gas consumption.

    The first generation of EREVs and EVS are leading the way, followed by home installations of solar and wind power. There is much more to do!

    Raymond


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    Eco_Turbo

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    Oct 17th, 2012 (7:38 pm)

    My feeling is that the oil industry is subjected to crazy regulations and that is why we see them doing crazy things sometimes. If we could somehow have a free oil market, prices would be where they were for decades, low enough to stimulate the economy. (Example: winter and summer gas formulas, etc, etc.)


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    Oct 17th, 2012 (7:49 pm)

    Koz: They stole their original formula but not their newer stuff as I understand it.

    Good thought. The latest and greatest could still be in the US!


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    DonC

     

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    Oct 17th, 2012 (7:51 pm)

    James: Before anyone negs me

    Surely you jest. It’s rare that a post down in the list goes green but yours may do it. On a slow day at that!


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    George S. Bower

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    Oct 17th, 2012 (7:55 pm)

    Raymondjram: This can be done by substituting oil with a renewable or non-contaminating source.

    Raymond

    It’s called Nuclear energy. Around 2100 AD the human race may possibly figure it out.
    Till then we have NG as our bridge.
    Renewables come in third.


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    Oct 17th, 2012 (8:39 pm)

    Noel Park: “Seems to me I’ve heard that song before”

    My favorite part of the video: “Fool me once, shame on you. Fool me twice, shame on me. Fool me 8 times, am I a fricken idiot!?”


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    Oct 17th, 2012 (8:43 pm)

    Eco_Turbo: My feeling is that the oil industry is subjected to crazy regulations and that is why we see them doing crazy things sometimes. If we could somehow have a free oil market, prices would be where they were for decades, low enough to stimulate the economy. (Example: winter and summer gas formulas, etc, etc.)

    The price is artificially low now. How much do I pay in taxes to fund a military to make sure the oil keeps flowing? If Exxon had to pay for their own military, you’d see $10/gal gas.


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    George S. Bower

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    Oct 17th, 2012 (8:49 pm)

    Let’s face it.
    When it comes to energy policy
    Romney is a loser.
    At least in my book.


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    Uncle Rollo

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    Oct 17th, 2012 (9:11 pm)

    I’ll agree that Bush started the bail out ball rolling, and that was a mistake. Both the banks and the auto industry. There was plenty of capital then just as there is now. Besides, if GM was overvalued and the free market would have only paid a portion of what the stock was worth, think about how much cheaper the Volt would be.
    The US needs to use what it has at hand now while it develops battery storage. Besides, how much lithium does the US have? Enough so we wont be held over a barrel like oil? If we do, how long until the environuts make it so it cant be mined?

    Rollo


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    Oct 17th, 2012 (9:28 pm)

    Uncle Rollo:
    I’ll agree that Bush started the bail out ball rolling, and that was a mistake.

    Rollo

    It was not a mistake. MCain would have done the same thing. There was no other option.
    Get over it!


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    flmark

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    Oct 17th, 2012 (9:33 pm)

    George S. Bower:

    Till then we have NG as our bridge.

    UH UH!

    Buy your solar PV now before the pendulum swings the other way. I spent a lot of time reading about NG last week, including things like ‘The Oil Drum’- a trade journal for that industry. Fracking is a Ponzi scheme and if we ever do capitalize on NG being a ‘bridge’, it will require about A HUNDRED THOUSAND NEW WELLS EVERY YEAR to be dug. Current pricing doesn’t even support a fracked well. It’s Enron all over again- and I didn’t even mention that EACH of these 100,000 wells takes 2 or more MILLION gallons of water- yeah, after this drought. I could go on. It’s just insane to think NG is a savior; it’s just more of that same oil flavored kool aid. Don’t buy it!


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    Oct 17th, 2012 (9:50 pm)

    Uncle Rollo: Besides, if GM was overvalued and the free market would have only paid a portion of what the stock was worth, think about how much cheaper the Volt would be.

    This makes no sense. You are paying for materials & labor, and some cost for the engineering/R&D.

    Uncle Rollo: Besides, how much lithium does the US have? Enough so we wont be held over a barrel like oil? If we do, how long until the environuts make it so it cant be mined?

    1) There’s very little lithium used in the battery
    2) There’s no shortage of lithium in the world
    3) The batteries are recyclable


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    Jeff Cobb

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    Oct 18th, 2012 (12:48 am)

    Thanks everyone for your kind words today.

    The next couple days we’ll have articles about some pretty good driver-submitted Volt videos.

    So Thursday through Monday morning, it will be GM-Volt at the movies … :-)


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    Pat

     

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    Oct 18th, 2012 (1:44 am)

    To post #7 and many others, fox news Gop dont care about the facts or dont let the facts get in their way. When the policies are based on propaganda and keeping the base angry/hateful, lies are the best answer to anything. That is how they operate.

    US need to invest in alternate energy sources and become dominant in these technologies otherwise China will do it since govt in other countries provide $$$ to industries to get the know how and provide jobs. Gop is the only party which does not believe in this and dont see the reality as their focus is on trickle down economy. US will become like a 3rd world country with the top 2-5% owning all the wealth and the rest getting by week to week.

    US right now locked in battle with Airbus industries in Europe which gets Govt funding and look how they have come to dominate and compete with Boeing where as Lockheed & other cos in US got out of commercial plane business.

    Same thing will happen in car batteries and other technologies unless US invests in such areas.


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    Bob Goldschmidt

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    Oct 18th, 2012 (3:17 pm)

    James,

    James — I agree wholeheartedly with your comments. I would like to add that the desire of the oil companies to increase profits operates directly against our ability to ever achieve oil energy independence. Right now WTI oil sells for about $20/bl less than European Baltic. This is why the portion of the Keystone pipeline between Cushing OK, where the WTI price is set, and the Gulf is currently being reversed to export our oil and make money off this price differential. When the rest of the Keystone is built, they will be able to ship Alberta oil South all the way to oil tankers in the Gulf for export and our energy prices will rise as the relative glut of oil in the interior US is relieved. Given this scenario, the only way we could ever become oil energy independent is if the whole world has enough oil. Don’t hold your breath.


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    Bob Goldschmidt

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    Oct 18th, 2012 (3:21 pm)

    Uncle Rollo,

    Uncle Rollo

    There is plenty of Lithium and it is not used up like oil — it can be recycled. See SQM