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A123 sale complete to Chinese automaker

Thu, 01/31/2013 - 17:36 -- Ruth Williams

The sale of A123’s automotive assets to Wanxiang Corporation has closed for US$256.6 million. An assurance has been made that Wanxiang America will continue to operate A123 as a wholly owned subsidiary, focussing upon making micro-hybrid batteries. 

Wanxiang America President Pin Ni, said:  “A123 is a company with exceptional talent and potential, Wanxiang America is committed to the long-term success and the continuance of its US operations.”

The US Department of Energy gave A123 a grant of US$249 million to build new plants in Michigan and create 3000 new jobs. Up until bankruptcy proceedings it had only spent $132 million and created 1300 jobs. This loan will only be repaid if A123 cannot fulfill the initial promises. 

Amid fears of US-taxpayer funded development going into the hands of a foreign company, federal approval for the sale had to be obtained. The defence and security contracts were sold to a small US-based pack maker called Navitas for US$2.2 million. By ensuring these contracts remained within the US reduced fears of security breaches if technology developed for US military was in the hands of a non-allied nation.

Navitas’s founder and COO Alan ElShafei said: "I don't want to say we're a savior on the government side, but that's kind of our role. There are some unique technologies we're acquiring that Wanxiang will not have access to."

The Chief Executive of A123, David Vieau, has left the company to “pursue other interests.”

 

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