Jan 30

Wanxiang Gets Go-Ahead to Acquire Non-Government Assets from A123 Systems

 

By Philippe Crowe

It looks like the A123 acquisition saga by Shanghai-based Wanxiang Group is coming to an end with today’s ruling from the U.S foreign investment committee.

Wanxiang America Corporation has received approval from the Committee on Foreign Investment in the United States (CFIUS) to complete its acquisition of substantially all of the non-government business assets of A123 Systems, Inc.
 

 

“We’re pleased the government has completed its review and provided us with the go-ahead to finalize this transaction,” said Pin Ni, president of Wanxiang America. “The future is bright for A123. It is a company with exceptional talent and potential, and Wanxiang America is committed to its long-term success and the continuance of its U.S. operations. Wanxiang America looks forward to closing the transaction and to continuing to foster the technologies A123 has worked so hard to develop.”

The Strategic Materials Advisory Council responded without delay today to the CFIUS ruling.

The Council mentioned in a press release the fact A123 Systems owns 91 patents for sensitive military and space battery technology.

“This disappointing decision represents a 180-degree reversal by the Obama administration in just 8 days, from the President’s Inaugural pledge to no longer ‘cede to other nations’ critical energy technology,” Council Co-chair and former Army Acquisition Executive, Dean Popps said. “Far from protecting America’s lead, as the President promised on the West Front of the Capitol, his administration has just allowed China to leapfrog the world in advanced batteries at the expense of American taxpayers.”

The Council opposed the sale of A123 to Wanxiang citing the massive national security risk the deal carries.

“The Chinese will now have direct access to a US-funded and developed technology that powers our military satellites and military drones and supports our soldiers in the field” said the Council in today’s press release.

Popps added, “The approved sale marks yet another step in the coordinated strategy by foreign countries to acquire leading US companies who are researching, developing and producing critical technologies. CFIUS itself has recognized this strategy but it appears they continue to fail to do anything to prevent it.”

This entry was posted on Wednesday, January 30th, 2013 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: 34


  1. 1
    xiaowei1

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    Jan 30th, 2013 (7:01 am)

    I’m not even American I can see this is just scare mongering:
    “The Council mentioned in a press release the fact A123 Systems owns 91 patents for sensitive military and space battery technology.”
    1) All patents are open to public viewing, how can they be sensitive?
    2) If we are actually talking about “trade secretes”, these secrets are known by people not patents and it would mean Americans selling out America for that to be released. Contractual agreements keep them trade secrets
    3) http://appft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2FPTO%2Fsearch-bool.html&r=0&f=S&l=50&TERM1=A123&FIELD1=AS&co1=AND&TERM2=&FIELD2=&d=PG01 There you go, 78 patents owned by A123 (other19 must be under a different assignee), I just the bulk of all the sensitive patented secrets to the Chinese and anyone else that wants them… took about 2 and a half minutes to find the data base and do a search on A123 as assignee.

    and this? what the…?
    “Far from protecting America’s lead, as the President promised on the West Front of the Capitol, his administration has just allowed China to leapfrog the world in advanced batteries at the expense of American taxpayers”
    1) how exactly do you leap frog when the exact same technology now exists in 2 countries?
    2) how do does the writer know if A123 is the world leader?
    3) this is just bashing the US president over something he would not directly regulate.
    4) either you believe in a free market or you don’t. can’t have your cake and eat it too.


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    xiaowei1

     

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    Jan 30th, 2013 (7:05 am)

    oh, and if the government REALLY thought A123 was worth keeping in US only hands, they would not have authorised the sale.


  3. 3
    James McQuaid

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    Jan 30th, 2013 (7:15 am)

    Without commenting on the degree to which Wanxiang America has been a good corporate citizen, it should be noted that the U.S. presidential elections may have served to interfere with the application of rational policy. Note the insane luchadores here:

    http://gm-volt.com/forum/showthread.php?24553-A123-Sale-Approved


  4. 4
    kdawg

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    Jan 30th, 2013 (8:26 am)

    xiaowei1: either you believe in a free market or you don’t. can’t have your cake and eat it too.

    That’s the part that cracks me up. The free-market people b!tch all the time about the government interfering, but I’m sure they will complain about this too. “The government didn’t stop the Chinese from using the free market, boo hoo”. Its very hypocritical.

    Personally, I don’t have a problem with some government interference (regulation), but I just don’t have enough *real* info on this matter to form a valid opinion. I was pulling for JCI to get Aone.

    My questions are, will Fisker start making cars again, and how does this affect the Spark EV?


  5. 5
    Raymondjram

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    Jan 30th, 2013 (8:39 am)

    That battery pack isn’t space efficient, as it could be using flat cells. Rolled cell can have more density if used individually, or in small packs (as in the Optima car battery), but encasing each cell wastes space. That package is only useful if any cell needed replacing, and it can only use air cooling, unless the pack was submerged in another case with liquid coolant. That type of pack with parallel cells was the same concept that Ford originally used for the Escape Hybrid’s battery pack. I hope the newer Ford hybrids are better.

    The LG/GM battery design for the Volt is much more efficient in space and cooling. I don’t know how GM designed the battery pack for the new Spark EV, but I wish it wasn’t like this.

    Raymond


  6. 6
    George S. Bower

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    Jan 30th, 2013 (9:07 am)

    Raymondjram:
    That battery pack isn’t space efficient, as it could be using flat cells.Rolled cell can have more density if used individually, or in small packs (as in the Optima car battery), but encasing each cell wastes space. That package is only useful if any cell needed replacing, and it can only use air cooling, unless the pack was submerged in another case with liquid coolant. That type of pack with parallel cells was the same concept that Ford originally used for the Escape Hybrid’s battery pack. I hope the newer Ford hybrids are better.

    The LG/GM battery design for the Volt is much more efficient in space and cooling. I don’t know how GM designed the battery pack for the new Spark EV, but I wish it wasn’t like this.

    Raymond

    Raymond,
    Tesla packs the batteries this way AND has liquid cooling also. In addition Tesla has one of the highest energy density packs.


  7. 7
    Tim Hart

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    Jan 30th, 2013 (9:15 am)

    GM should have bought A123 and then could have increased their lead in EV development.


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    Bonaire

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    Jan 30th, 2013 (9:53 am)

    It’s a battery. New battery tech will leap-frog what A123 has done with its blend of LiFEPO4.

    Face it – if it was “that good” then everyone would have climbed over everyone else trying to OEM from them. However, that didn’t happen and the excess prices A123 charged for packs, their QA troubles, financial problems and top-heavy management sunk the company. None of those things would have been an issue if the cells were “that good”.

    Our US Govt. has to watch over their grants and loan guarantees closer to make sure that companies who receive them provide good results for the investment. Writing a check and hoping for good results isn’t good enough. Trust – but verify!


  9. 9
    kdawg

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    Jan 30th, 2013 (9:55 am)

    Tim Hart: GM should have bought A123 and then could have increased their lead in EV development.

    I think GM’s strategy in this is to let all the battery people battle it out. They will keep testing the new technologies in their test center. May the best tech win.

    (However, they did invest in Envia, which seems to be a winner)


  10. 10
    Steve

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    Jan 30th, 2013 (10:00 am)

    Since when is China a “free market” economy?


  11. 11
    kdawg

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    Jan 30th, 2013 (10:02 am)

    Here’s an interesting article on 13 battery companies to watch. (A123 isn’t on the list).

    http://gigaom.com/2013/01/14/13-battery-startups-to-watch-in-2013/


  12. 12
    Energy Tyrant

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    Jan 30th, 2013 (10:48 am)

    Steve:
    Since when is China a “free market”economy?

    Since it started being “free” enough that corporate fatcats used that line to justify shipping American jobs to China. The neo-cons are upset that this will give A123 a chance to live on, and continue improving alternative energy technologies.


  13. 13
    joe

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    Jan 30th, 2013 (11:46 am)

    I just can not believe at how stupid the US government is. We are on the route of self destruction. I feel sorry for the young generation.


  14. 14
    kdawg

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    Jan 30th, 2013 (11:48 am)

    OT: Cap’n Jack – here’s your cheap EV

    http://insideevs.com/2500-third-generation-smart-fortwo-electric-drive-still-coming-to-us-this-spring/

    After the federal tax credit of $7,500, the 2013 Fortwo Electric Drive costs only $17,500 and if you factor in state- and local-level rebates, then pricing drops below $15,000 for some potential buyers. Smart claims the Fortwo ED will become the most affordable pure electric vehicle available in the US. That’s likely true, but with deals like $69 per month the lease the similar-sized Mitsubishi i, the 2013 Fortwo Electric Drive certainly enters a field with some cheap competition


  15. 15
    Noel Park

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    Jan 30th, 2013 (12:06 pm)

    kdawg: My questions are, will Fisker start making cars again, and how does this affect the Spark EV?

    #4

    Yeah, mine too. +!

    I hate it but, if U.S. companies won’t step up to pick up the pieces, the maybe the Chinese just have a longer view than we do.


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    Noel Park

     

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    Jan 30th, 2013 (12:11 pm)

    kdawg: OT: Cap’n Jack – here’s your cheap EV

    #14

    Man, that’s gotta get your attention. +1 I wonder how many miles you get with the Mitsu lease?

    Looks like the Spark is headed for some serious competition.


  17. 17
    pjkPA

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    Jan 30th, 2013 (12:31 pm)

    Steve:
    Since when is China a “free market”economy?

    Got that right!
    Try to buy advanced tech company from China.. see what the Chinese government does.


  18. 18
    Dave G

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    Jan 30th, 2013 (12:33 pm)

    xiaowei1:
    either you believe in a free market or you don’t. can’t have your cake and eat it too.

    Well said, +1.


  19. 19
    CaptJackSparrow

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    Jan 30th, 2013 (12:50 pm)

    kdawg: OT: Cap’n Jack – here’s your cheap EV

    http://insideevs.com/2500-third-generation-smart-fortwo-electric-drive-still-coming-to-us-this-spring/

    WooooHoooo!!!!

    /Actually we’re saving for a Volt…….


  20. 20
    CaptJackSparrow

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    Jan 30th, 2013 (1:07 pm)

    The vast majority of A123′s manufacturing was already in China!

    +1 for xiaowei1


  21. 21
    CaptJackSparrow

     

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    Jan 30th, 2013 (1:08 pm)

    hey, where’d the edit thingy go?!?!?!?!?


  22. 22
    Bonaire

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    Jan 30th, 2013 (1:17 pm)

    joe: I just can not believe at how stupid the US government is. We are on the route of self destruction. I feel sorry for the young generation.

    Heh – that’s what our parents said. :) But now, it’s far more true than back then.


  23. 23
    Streetlight

     

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    Jan 30th, 2013 (1:39 pm)

    Why Strategic Materials Advisory Council opposition is not overcome by Poster #1.

    Here recopied from today’s article is the Strategic Materials Advisory Council link.
    http://www.strategicmaterials.org/

    I suggest a look-see at its council members. Each eminently qualified.

    Fact is, China is awash in several trillions of our bucks. Which happened because of exactly the kinds of inequities between our open culture and China compelling Strategic Materials Advisory Council opposition. As we speak, this country’s engaged in fending off China’s rare Earths embargo’s; China’s unabashed South China Sea ownership claims; while all competing against China’s $10/day state labor rates.

    Obviously this Administration auto industry policies are inconsistent just as expressed by Strategic Materials Advisory Council.


  24. 24
    Loboc

     

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    Jan 30th, 2013 (1:43 pm)

    Bonaire: Heh – that’s what our parents said. But now, it’s far more true than back then.

    If you can’t get a real job, legislate.


  25. 25
    Noel Park

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    Jan 30th, 2013 (2:00 pm)

    pjkPA: Got that right!
    Try to buy advanced tech company from China.. see what the Chinese government does.

    #17

    Slightly but not totally OT IMHO, there was an amazing feature on NPR this AM about electronic eavesdropping in China. Evidently bugs and tiny video cameras are easily available and sold by the thousands (millions?) to people who want to snoop on spouses, business associates, political rivals, you name it. Also bug detectors are sold over the counter at their equivalent of Best Buy or whatever.

    They had a great sequence where the guy went to the above, bought a detector, and started walking around a business office with the thing alarming on the copy machine, the fax machine, various phones, etc.

    The last Chinese person interviewed had some interesting comments on what the massive upheavals of “capitalism” have done to the sort of “moral compass” of the nation.


  26. 26
    DonC

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    Jan 30th, 2013 (2:31 pm)

    I think the reality is that A123′s Chinese partners had already stolen its IP. This deal is more about the legal right to distribute than anything. This is one of those situations where the horse has already left the barn.

    I do find it humorous that the same actors who opposed the DOE grants to A123 now say the grants produced such super important technology.


  27. 27
    kdawg

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    Jan 30th, 2013 (3:32 pm)

    DonC: I do find it humorous that the same actors who opposed the DOE grants to A123 now say the grants produced such super important technology.

    LOL, never thought of it that way.

    “Hey China, you can’t steal our advanced technology, …um.,….. that’s worthless, I mean that was never produced!… wait?”


  28. 28
    Bonaire

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    Jan 30th, 2013 (4:43 pm)

    From reading above by the government official, it sounds like A123 produced the batteries for our satellites? Who’d a thunk that! Now, China can control our satellites! :)


  29. 29
    RANDY

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    Jan 30th, 2013 (5:24 pm)

    As much as i dislike our trade imbalance with china ,it possible that good battery tech will help china and in turn the us and the rest of the world away from oil. If china continues its global thirst for oil based energy it will drive the price out of reach to the average american.


  30. 30
    Noel Park

     

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    Jan 30th, 2013 (5:40 pm)

    Bonaire:
    From reading above by the government official, it sounds like A123 produced the batteries for our satellites?Who’d a thunk that! Now, China can control our satellites!

    #28

    Maybe I dreamed it, but I thought for sure that I had read that there were 2 divisions of A123. The one that made “civilian” products such as car batteries went to Wanxiang (cool name BTW, sounds a lot like a derisive British slang word that comes to mind) and the one that made sort of “military” related products to some U.S. firm. No?


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    Jan 30th, 2013 (5:45 pm)

    RANDY:
    As much as i dislike our trade imbalance with china ,it possible that good battery tech will help china and in turn the us and the rest of the world away from oil. If china continues its global thirst for oil based energy it will drive the price out of reach to the average american.

    #29

    On a related topic, there was another feature on NPR this AM about the continuing deadly Beijing smog situation. There is apparently strong agitation for stronger air pollution control laws.

    They quoted someone there as saying that “The only ones opposed to stronger pollution controls are polluters and creatures who do not breathe.”


  32. 32
    Dave K.

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    Jan 30th, 2013 (6:04 pm)

    A123 makes good batteries. The problem all along is overhead. Here’s an example: China based Advanced Battery Technologies is a producer of e-bikes and lithium batteries. They opened a new facility in December 2011 with the specific intent to increase small type battery output. They realize that manufacturing of large style batteries will be profitable in a few years. But it isn’t profitable now. This company also constructed dorms for the 1000 or so employees to live on site. Combine this with a modest pay schedule and you see the heavy advantage China based distributors have over a company based in New England.
    With A123 now in the hands of China, most of the businesses in China will benefit from direct access and cross-over effect of doing business with a close neighbor. Overall this sale to China is a short term positive for the EV industry. Long term it’s one more step toward America becoming a service society.
    American’s need to understand that the common worker can no longer strike for a shorter work week. Or demand % increases over a several year extended contract. It’s going to take old fashioned hard work and determination to hold our ground or allow or sons and daughters to wait tables all their lives. Another example is the medical industry. Where do you think the new wave of lower paid physicians are coming from? A large percent are moving here from India.

    Stop complaining and get back to work.


  33. 33
    Eco_Turbo

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    Jan 30th, 2013 (8:23 pm)

  34. 34
    Eco_Turbo

     

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    Jan 30th, 2013 (8:48 pm)

    Here’s what a bunch of Panasonic 18650s welded together can do:

    And you’d have trouble paying more than $4000 for 388 of them.

    http://www.youtube.com/watch?v=VLCdP6sMN9k