Bob Lutz Takes Washington To Task Over A123′s Failure

[JamesMcQuaid]

Jay Cole (known here as statik) has a good review at InsideEV's of Bob Lutz's Forbes opinion piece regarding A123 Systems' acquisition by Chinese auto parts company Wanxiang. You will want to give it a read.

There are several items worth noting:
1) Either General Motors or General Electric could have acquired A123 Systems, but they chose not to do so. The management of A123 can be faulted for many things, but its unpardonable sin was the failure to assure QC (quality control). In manufacturing, at the barest minimum, management must ensure QC. At this point, there is no telling what else is under A123's bed covers, and this was enough to drive away potential suitors.

2) A123 is not Solyndra. The company continues to produce product. The company continues to employ people.

3) A123's financial problems were not simply a result of profligacy empowered by subsidy. Mr. Lutz cites over capacity, but this is less than specific, and may be something of a simplification. A123 has faced the same struggles as the rest of the battery manufacturers. It is much more likely that A123 was diminished (but has not died) of "a thousand cuts". A123's financial problems are most attributable to an inefficient and inexperienced management.

4) The shake out in the battery industry will continue, and this is good. The survival of the fittest is resulting in a more fit battery industry, which drives down cost, and makes it possible to put 1,000,000 EREVs on America's highways.

This is a happy ending.

[mikeg3]

China has demonstrated some very effective motivational tools for under-performing management. It will be interesting to see if those methods can be exported outside of their borders or if they will have to rotate managers into China for "training".

Are you referring to the market for salvaged body parts?

[Noel Park]

Are you referring to the market for salvaged body parts?

Or maybe that highly efficient motivational tool the AK47

[bonaire]

The Chinese will know how to make a Battery company's executives energetic. The company surely has the ability to "charge up" management. To "prod" them to produce. To "Amp" them up.

If you ever hear A123's CEO talk, Mr. Vieau, it always sounds like he just woke up from a nap. Maybe it was his upstate NY schooling (Syracuse) or perhaps his continued fights trying to get product sold to partners. They should have built a small, battery-powered, CEO-prod to animate him