chinese billionaire to scoop up failing car battery maker that got $240m from feds - 3.7 volt lithium ion battery
Struggling Massachusetts
A company that makes batteries for electric vehicles and receives $0. 24 billion in stimulus money is being rescued from bankruptcy by a Chinese billionaire who may transfer his business overseas.
A123 Systems received $241. 1-
Three years ago, the Obama administration's million grants and Michigan's tax credit of more than $0. 125 billion were expected to create jobs while leading the country out of traditional gas --
To the direction of clean energy.
But the lithium-ion battery maker is now ready to hand control over to Wanxiang Group, a Chinese company that agreed in an interim agreement in last August to invest up to $0. 45 billion, so it can take over as many as 80% of companies. [pullquote]
Waltham, quality since 2009. -
The company reportedly lost $0. 857 billion, laid off jobs and recalled products.
Shares of A123 plunged from $4.
It was 26 cents this week about a year ago.
"They are wrong," said jararrett Skorup, research assistant at the Mackinac Public Policy Center, when it comes to the Obama administration.
"The problem is that decision makers decide to pick economic winners and losers, and unfortunately they pick too many losers.
"We will never get the money," Skorup said of a lot of stimulus money . ".
"This is a grant, so there are not many strings attached.
"The unstable status of battery manufacturers is caused by many factors ---
Most notably, what the company cannot control is the lack of demand for rechargeable batteries for electric vehicles.
"It failed because there was not enough demand and because companies outside the USS.
-Some of China--
"There they are able to produce the equipment at a cheaper price," Skorup said . ".
"Delegates should not try to determine what the next new technology is," he told Fox News . ". com.
"The free market is doing better.
"The A123 System provides batteries to customers including California luxury carmaker Fisk motor.
Transactions with Wanxiang Group-
Owned by Chinese billionaire Lu Guanqiu-
This also raises the question of whether manufacturers will be forced to move to China.
A representative of A123 Systems did not respond to a request to comment on the matter.
John Gartner, an analyst at Pike Research, told the Detroit Free News that this is likely to happen.
"Because of the weight of the batteries, it is more cost-effective to make the places where they will be used for vehicles," Gartner told the paper . ".
The company was touted by President Obama as a good example of "what is possible in the clean energy economy.
"To be honest, A123 hopes to build that factory in Asia.
But thanks to the grant, it chose Michigan as the largest and most innovative plant to date, "Obama told reporters at a news conference on April 30, 2010.
"The plant will be one of 30 new plants fully operating over the next six years, manufacturing electric vehicle batteries and components in the United States.
"So this is possible in the clean energy economy," the president said.
The situation of this troubled company is similar to that of California solar company Solyndra.
Panel makers who went bankrupt after receiving $0. 535 billion in federal loans.
Workers at Mich Dutch compact power manufacturing plant.
Companies operated by LG Chem have started taking turns on vacation and due to insufficient demand for lithium only work three weeks a monthion cells.
The Michigan hybrid battery plant, which Mr. Obama praised as evidence that "manufacturing jobs will return to the United States," was built with $0. 15 billion in taxpayer money.
The plant opened in July 2010 but has not yet produced a battery for GM's troubled electric vehicle Chevrolet Volt.
The plant's batteries are also intended for Ford's electric Fox.
Production of taxpayers
The subsidized Volt has been plagued by stoppages, and the impact has spread to companies and factories that make parts for it ---
Battery included.
"Given the lack of demand for electric vehicles, even though the Obama administration has provided billions of dollars to stimulate electric vehicles, it's not surprising what happened to LG Chem.
Just because a ton of money is put into the product doesn't mean people will buy it, "Paul cheiser, a deputy researcher at the National Center for Law and Policy, told Fox News. com. FoxNews.
Cristina Corbin and Perry Chiaramonte from Com contributed to this report.