Dec 10

Johnson Controls Cedes A123 Systems To Wanxiang

 

By Philippe Crowe

Johnson Controls is opting out of the planned acquisition of A123 assets.

Johnson Controls said Dec. 9 it officially withdrew from the bankruptcy auction to acquire portions of A123 Systems when it declined to match a higher bid submitted by Wanxiang.
 

A123-Battery-module-for-hybrid-vehicles 

 

Subsequently A123 representatives have announced they selected Wanxiang’s bid of $257 million as the best offer for the total company over a set of competing complementary bids by Johnson Controls for the automotive and government assets and NEC for the grid and commercial assets.

As is usual for such matters, the final sale is subject to approval by the bankruptcy court. A hearing is currently scheduled for Dec. 11.

The sale to Wanxiang is also subject to review by the Committee for Foreign Investment in the United States (CFIUS) and requires approval by the U.S. government. None of the involved parties can confirm any timing for such review and approvals.

“While A123′s automotive and government assets were complementary to Johnson Controls’ portfolio and aligned with our long-term goals, Wanxiang’s offer was beyond the value of those assets to Johnson Controls,” said Alex Molinaroli, president, Johnson Controls Power Solutions. “Reports by other parties that our proposal involved an elimination of jobs in Michigan are inaccurate.”

Johnson Controls said as it was announcing the withdrawal of its bid that it was the first in the world to produce li-ion batteries for mass-production vehicles, and also launched the first U.S. facility to produce complete li-ion battery cells and packs for hybrid and electric vehicles, in Holland, Mich.

“Johnson Controls remains committed to the advanced battery industry and shares the Department of Energy’s goal to advance the domestic capability in the United States,” said Molinaroli.

A123 had not yet commented on the matter when we uploaded this article, early Monday morning, Dec. 10. We will update with any relevant info as soon as possible.

This entry was posted on Monday, December 10th, 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: 37


  1. 1
    Loboc
    Loboc Says

     

    Dec 10th, 2012 (7:11 am)

    This is a surprising turn of events. Last I looked at A123 the Johnson Controls deal was expected to go through.

    Hopefully, the US will keep some momentum and hooks into tha nascent automotive propulsion piece.

    GM is still sourcing A123 for Spark?


  2. 2
    James McQuaid
    James McQuaid Says

     

    Dec 10th, 2012 (7:13 am)

    If the Committee for Foreign Investment in the United States (CFIUS) rejects the Chinese acquisition, which many Republican congressman prefer, then it will be incumbent upon the Energy Department to provide more funding to A123. That will not be uncontroversial; fortunately, we are past the election.


  3. 3
    JDan
    JDan Says

     

    Dec 10th, 2012 (8:38 am)

    A123 is being bought out by the Chinese, hmmm. I’m not sure which is worse that or having the US government prop up another company. (sigh)


  4. 4
    George S. Bower
    George S. Bower Says

     

    Dec 10th, 2012 (8:55 am)

    James McQuaid:
    If the Committee for Foreign Investment in the United States (CFIUS) rejects the Chinese acquisition, which many Republican congressman prefer, then it will be incumbent upon the Energy Department to provide more funding to A123.That will not be uncontroversial; fortunately, we are past the election.

    Why wouldn’t it just go to the next highest bidder.??


  5. 5
    kdawg
    kdawg Says

     

    Dec 10th, 2012 (9:05 am)

    How about the DOE increase the $120 million set aside for Argonne to develop batteries, by $260 million, and buy A123 to assist development and build the batteries?

    Or the US Government could follow Chinese policy and tell Wanxiang they must partner with a US company if they want to own A123. Maybe they could partner with JCI.


  6. 6
    Nelson
    Nelson Says

     

    Dec 10th, 2012 (9:31 am)

    Not agreeing or disagreeing since I don’t know all the details.
    But….
    First companies are “too big to fail”.
    Now…
    Too technically advanced to let fall into the hands of foreign countries.
    I say the US should allow Wanxiang to buy A123 only if the entire DOE grant paid back in full.

    NPNS!
    Volt#671


  7. 7
    George S. Bower
    George S. Bower Says

     

    Dec 10th, 2012 (9:54 am)

    I vote we do to them as they do to us and “stick it to ‘em”


  8. 8
    Randy
    Randy Says

     

    Dec 10th, 2012 (9:54 am)

    kdawg:
    How about the DOE increase the $120 million set aside for Argonne to develop batteries, by $260 million, and buy A123 to assist development and build the batteries?

    Or the US Government could follow Chinese policy and tell Wanxiang they must partner with a US company if they want to own A123.Maybe they could partner with JCI.

    Exactly And while they are at it start charging china 24% tarriff on all their imported goods like they do to us as well.


  9. 9
    MrEnergyCzar
    MrEnergyCzar Says

     

    Dec 10th, 2012 (10:00 am)

    As the dollar loses its value, we’ll see more and more of China buying our assets… Several countries no longer trade in dollars with each other….

    MrEnergyCzar


  10. 10
    haroldC
    haroldC Says

     

    Dec 10th, 2012 (10:05 am)

    George S. Bower,

    I’m with you George. Bad week for us in Canada too….Looks like the Chinese are getting the ok to buy the Alberta oil sands or much of it. I’m to old to learn Chinese but if l did l would tell them to stay home…except for Chinese food…..
    Just my mouthin’ off a bit.
    haroldC


  11. 11
    Logical_Thinker
    Logical_Thinker Says

     

    Dec 10th, 2012 (11:04 am)

    we should absolutely be charging the same tariff on Chinese imports as they do on ours.

    our politicians are addicted to low cost imports, but the approach is short-sighted.


  12. 12
    John
    John Says

     

    Dec 10th, 2012 (11:06 am)

    I’m not much for government intervention… but this is a foreign business (from a communist country) purchasing American IP that tax payers (willingly or not) invested in. In this case, I think all intellectual property should be made public domain before the purchase. We invested in the research and damn if everyone else shouldn’t gain from it.

    -John


  13. 13
    Steve
    Steve Says

     

    Dec 10th, 2012 (11:14 am)

    kdawg:
    How about the DOE increase the $120 million set aside for Argonne to develop batteries, by $260 million, and buy A123 to assist development and build the batteries?

    Or the US Government could follow Chinese policy and tell Wanxiang they must partner with a US company if they want to own A123.Maybe they could partner with JCI.

    Golden Rule trade policy. Sounds like an idea with merit.

    It’s troubling to me too that another US technology is likely to leave and be commercialized overseas.


  14. 14
    BLIND GUY
    BLIND GUY Says

     

    Dec 10th, 2012 (11:22 am)

    I certainly don’t want to pretend to know all the details or facts about how A123 has been run. With the high demand for all kinds of batteries and having a next generation EV battery; it just looks like a case of bad management, perhaps too top heavy? Perhaps the Quality control wasn’t thorough enough to catch the problem with Fisker’s batteries? Or did A123 try to expand before having enough contracts in hand? All I know is in a few years, when we get a BEV with comfortable range; I really don’t want the batteries imported from China. Congress better get serious about trade or risk losing future manufacturing jobs to other nations! It certainly wouldn’t hurt to read about some DOE loan success stories as well.


  15. 15
    Texas
    Texas Says

     

    Dec 10th, 2012 (11:26 am)

    Why should we be surprised? The Chinese government has put renewable energy at the top of their priority list. They subsidize their solar industry as well as many other industries because they feel owning these industries will be critical in the future.

    It is the Walmart strategy – come in, put in a huge store and undercut the competition until those small businesses are forced to bow out.

    Also, China holds a huge amount of our debt and can be considered shareholders of the US.

    On the bright side, peak net energy has already been reached and China’s growth model is completely unsustainable. Their bubble should not last through this decade.

    Then we will all be in the game to see who can hold on, at the expense of our neighbors – negative sum game.


  16. 16
    kdawg
    kdawg Says

     

    Dec 10th, 2012 (11:49 am)

    I was in Detroit on Saturday (Ford Field) to watch the US Women’s Soccer match against China. The US started strong, but then it appeared China took over the game with physical play. In the second half, the US’s teamwork allowed them to rally, score 2 goals, defend their lead, and win 2-0.

    I’m hoping the soccer match ends up being an analogy to US battery development, and right now it’s only half-time.


  17. 17
    Steverino
    Steverino Says

     

    Dec 10th, 2012 (12:48 pm)

    If GM had gone bankrupt without government intervention, guess who would have bought the company for pennies on the dollar? I think we are seeing this scenario played out before our eyes.


  18. 18
    Noel Park
    Noel Park Says

     

    Dec 10th, 2012 (12:55 pm)

    kdawg: I’m hoping the soccer match ends up being an analogy to US battery development, and right now it’s only half-time.

    #16

    God send that it shall be true. +1

    But I’m not holding my breath.


  19. 19
    Noel Park
    Noel Park Says

     

    Dec 10th, 2012 (12:59 pm)

    haroldC: Bad week for us in Canada too….Looks like the Chinese are getting the ok to buy the Alberta oil sands or much of it.

    #10

    Now THAT’s scary! I hadn’t heard that one. Where did you see it?

    Would that mean the they would give up on the Keystone pipeline and throw their weight behind the one going to the coast in BC? Or would they want to send it to Houston and refine it here before sending the products home?


  20. 20
    Noel Park
    Noel Park Says

     

    Dec 10th, 2012 (1:00 pm)

    Texas: Then we will all be in the game to see who can hold on, at the expense of our neighbors – negative sum game.

    #15

    Alas, too true IMHO. +1


  21. 21
    Noel Park
    Noel Park Says

     

    Dec 10th, 2012 (1:21 pm)

    MrEnergyCzar:
    As the dollar loses its value, we’ll see more and more of China buying our assets… Several countries no longer trade in dollars with each other….

    MrEnergyCzar

    #9

    Captain Arab he started
    Writing up some deeds
    He said, “Let’s set up a fort
    And start buying the place with beads”

    Bob Dylan’s 115th Dream

    It looks like what went around is coming around. How sad.


  22. 22
    DonC
    DonC Says

     

    Dec 10th, 2012 (1:24 pm)

    I’m thinking that the low value placed on A123 may simply reflect that its IP isn’t worth as much as some assumed. The basic chemistry may be great but A123 is licensing the rights to that chemistry from the University of Texas. Maybe the extra that A123 has added isn’t that special.


  23. 23
    kdawg
    kdawg Says

     

    Dec 10th, 2012 (2:07 pm)

    DonC: I’m thinking that the low value placed on A123 may simply reflect that its IP isn’t worth as much as some assumed. The basic chemistry may be great but A123 is licensing the rights to that chemistry from the University of Texas. Maybe the extra that A123 has added isn’t that special.

    Or *was* special, and now the competition has either caught up or surpassed.

    http://www.engadget.com/2012/02/29/envias-gm-backed-battery-delivers-huge-energy-density-lower-co/

    Envia’s GM-backed battery delivers huge energy density, lower costs, headaches for competitors


  24. 24
    Streetlight
    Streetlight Says

     

    Dec 10th, 2012 (2:10 pm)

    If you believe what’s good for the goose is good for the gander…hear this.
    China’s cold war like intolerance to settle its fabricated claims against Taiwan and South China Sea countries represents the most serious threat to anything one can call ‘Pacific Rim’ peace. On January 1, 2013 China escalates its South China Sea demands with a so-called new policy as authority to “inspect, seize, deport or force ships to alter course out of areas within China’s claimed territorial waters”. You got it — essentially a military blockade. Isn’t that just ducky.
    http://www.eurasiareview.com/10122012-trespassers-to-be-prosecuted-chinas-latest-billboard-in-south-china-sea-analysis/

    Most of us know pre-election 2012 the Administration touted its WTO record against China as ‘we’ve never lost a case’. And we all know well China’s virtually complete rare earth exports embargo. So comes China after anything that sticks. Bid half-a-rock (rock=billion) –so what. Its not their money – its ours.

    Now the A123 bid tests the Administration. In the past, the Administration always folded. Why we might offend China — our biggest creditor. They (China) implements a war-like South China Sea policy…why not an economic version of the Monroe Doctrine.


  25. 25
    James McQuaid
    James McQuaid Says

     

    Dec 10th, 2012 (2:19 pm)

    Why wouldn’t it just go to the next highest bidder.?
    Hi George, well it could; although I read “Johnson Controls said as it was announcing the withdrawal of its bid”. A123 has used $132 million of its $249 million federal grant, so I suspect that Johnson would want some of the remaining grant money in order to reenter their bid.

    The sale does not include A123′s Michigan-based government business that works with the U.S. Defense Department, which was instead sold to Woodridge, Illinois-based Navitas Systems for $2.25 million.

    A123 is in a joint venture with Shanghai Automotive Industry Corp. called Shanghai Advanced Traction Battery Systems Company, and owns a cathode powder plant in China. Wanxiang probably wants those assets.

    Wanxiang America Corporation also has offices and a warehouse in Illinois. Note: http://www.wanxiang.com/

    the low value placed on A123 may simply reflect that its IP isn’t worth as much as some assumed
    agree.

    If GM had gone bankrupt without government intervention, guess who would have bought the company for pennies on the dollar? I think we are seeing this scenario played out before our eyes.
    agree.


  26. 26
    Tall Pete
    Tall Pete Says

     

    Dec 10th, 2012 (3:27 pm)

    Noel Park: Now THAT’s scary! I hadn’t heard that one. Where did you see it?

    It’s all over the place :
    http://www.desmogblog.com/2012/12/07/harper-approves-foreign-acquisition-nexen-progress-energy


  27. 27
    CogWheeler
    CogWheeler Says

     

    Dec 10th, 2012 (3:54 pm)

    So, is it time to sell the stock?

    …I wish it weren’t true.


  28. 28
    Noel Park
    Noel Park Says

     

    Dec 10th, 2012 (3:55 pm)

    Tall Pete: It’s all over the place :

    #26

    Thanks. +1

    Pretty scary stuff, not least of which is that they are also evidently weakening environmental controls. Good luck Alberta. Not to mention the rest of us.


  29. 29
    Raymondjram
    Raymondjram Says

     

    Dec 10th, 2012 (6:34 pm)

    Noel Park: #9

    Captain Arab he started
    Writing up some deeds
    He said, “Let’s set up a fort
    And start buying the place with beads”

    Bob Dylan’s 115th Dream

    It looks like what went around is coming around.How sad.

    Are you referring to the purchase of Manhattan? I was born there and I know the whole story, including where the name comes from and what it means (Captain Jack Sparrow will love to learn this!).

    Raymond


  30. 30
    Eco_Turbo
    Eco_Turbo Says

     

    Dec 10th, 2012 (7:12 pm)

    If the JCESR is successful, all A123′s stuff may be obsolete in a few years anyway.


  31. 31
    George S. Bower
    George S. Bower Says

     

    Dec 10th, 2012 (7:56 pm)

    Steverino:
    If GM had gone bankrupt without government intervention, guess who would have bought the company for pennies on the dollar? I think we are seeing this scenario played out before our eyes.

    So true and exactly why the US guvm’nt should step in and do something.

    You would think the Obama admin would do it to increase the political leverage they already have to get this thing fixed…..and not let the Chinese steal our tech!


  32. 32
    George S. Bower
    George S. Bower Says

     

    Dec 10th, 2012 (8:03 pm)

    Unless as DonC says they don’t have that much to steal.


  33. 33
    Noel Park
    Noel Park Says

     

    Dec 10th, 2012 (8:04 pm)

    Raymondjram: Are you referring to the purchase of Manhattan?

    #29

    Well it’s Bob’s song, and nowhere does the name “Manhattan” actually appear, but I assume that such is what he was alluding to. I printed out the lyrics to make sure I got them right. the last lines of the song are:

    But the funniest thing was
    When I was leavin’ the bay
    I saw three ships a-sailin’
    They were all heading my way
    I asked the captain what his name was
    And how come he didn’t drive a truck
    He said his name was Columbus
    I just said, “Good luck”


  34. 34
    Eco_Turbo
    Eco_Turbo Says

     

    Dec 10th, 2012 (8:34 pm)

    MrEnergyCzar,

    Does anybody remember the late 80s and early 90s when the exact same thing happened with the Japanese? What goes around always comes around.


  35. 35
    Pat
    Pat Says

     

    Dec 11th, 2012 (1:25 am)

    China and many other countries govt invest in technologies so as to spur manufacturing ib their countries but also kill the competion as they have cheap labor. Only in US folks hate for the Govt to invest in new technologies to spur growth. Just look at Airbus in Europe, built and run by govts in that area. Now Airbus is the 2nd largest commercial aircraft producer. Lockheed, vought and others in US gone …only Boeing left.

    Short sightedness in US and dubious rationale by political party will only lead to US losing its advantage. Many CEO in Us are not interetsted in R/D they want to pocket the $$ for their inflated salaries, damn the R/D. Look at HP, destroyed by greedy CEO and a mighty firm used to be run by engineers and now it is a shell run by greedy CEO, who come and go collecting their golden parachutes, Recall Fiorina. What a dumb lady to run HP into the ground.

    Oh well…


  36. 36
    Sean
    Sean Says

     

    Dec 11th, 2012 (3:11 am)

    I rather support American and I bought some American made baking sheets at Whole Foods called USA Pan not to long ago I wish A123 was still an American company not some bought out Chinese piece of corruption bs.

    Wouldn’t you agree?

    Best of all the cookware I bought has no Teflon in it.

    What ever that is I’m going to find out.

    Now tell that to the Chinese!

    I bet there stuff has Teflon, lead, and other harmful chemicals in there no good biased cheap quality bangers that’ll go bad in just a few years not these babies!

    Here some info about Teflon.

    http://en.wikipedia.org/wiki/Polytetrafluoroethylene


  37. 37
    Sean
    Sean Says

     

    Dec 11th, 2012 (4:00 am)

    Though is Silicone safe I hope it’s not as bad as Teflon?