A123 Bankrupt - $0.25 Billion Loss - More Ammo for Romney
I actually own 20ah A123 cells on my ebike so this kind of sucks.
Did the Chinese company turn down the deal?
I thought A123 was going to be bought and avoid this...-
Slow down .. don't have to focus on the negativizers ..
Assets to be sold to Johnson Controls
This means the technology is not going to the Chinese.
It probably also means that hobbyists like us will be locked out of getting A123 cells in the future.
I've just started putting together a news article to cover this. I posted a list of links to my prior news articles on the events that led up to this here: http://visforvoltage.org/forum/13139-a123-waltham-ma
Well maybe if the company sold cells to hobby people like us then they might actually make money.
It's hit the news now... links everywhere.
So the government gives a startup $0.25 Billion and that startup fails and is bought for about half that price.
Apparently the "grant" wasn't maxed out, so the new company is still playing this game where they expect the government to play a part. (as in cough up more money)
They bought the company for LESS than the money left in the "grant".
You would think if a startup goes bankrupt that the people that take over don't get leftover funds, but that's not what happened.
In my mind this "second scandal" is almost as bad as the bankruptcy itself... if a government started startup fails the money ought to go back to the taxpayers.
The government did not start A123 Systems. It was MIT researchers who started the company, just like a zillion other companies get started by university researchers looking to capitalize on their findings.
Read it carefully .. the deal with Johnson is only for the automotive batteries business. A123 also has a line of business selling grid energy storage systems. A123 is maintaining control over that part of the business, and looking to sell it to other companies.
The way I see it there are two parts to this failure - http://blog.longtailpipe.com/2012/10/why-did-a123-systems-go-to-bankruptcy.html
- A123 made a couple expensive business mistakes -- quality control wasn't good enough, and problematic batteries made it out to OEM vehicles -- overly dependent on a primary customer, Fisker Automotive
- Fisker Automotive did not start Karma production when expected, and then when the DoE froze Fisker's loans that halted plans for Fisker to start production of the Atlantic this year. If Fisker had started Atlantic production when expected, A123 would instead be ramping up production right now.
But don't you think that if the company goes bankrupt that they should give up the remainder of the grant?
Basically those are yet unspent tax dollars ($0.125 Billion) that could be not spent in a time when our debt is out of control.
I have less problem with the bankruptcy and the losses so far... but in effect the extension of the grant is like a sort of theft of taxpayers dollars.
Think of it like this:
Johnny breaks into a house and steals a tv.
Sammy buys the $250 tv for $125 from Johnny.
Johnny is arrested for the theft, but Sammy gets to keep the tv.
...that's not how things work in real life. If the tv can be identified as stolen then Sammy should have to give up the tv.
The unspent tax dollars of a bankruptcy should be returned !!!
(Romney did not mention A123 last night)
The Chinese company finally bought A123.
The acquisition has been controversial because US taxpayers provided tens of millions that supported the development of A123’s technology that allows batteries to produce more power and charge more quickly. Critics charged that the acquisition would put sensitive technology in the hands of the Chinese government.
...so my A123 20Ah cells aren't going to become obsolete. (good news)