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Posted on Wed, Jan 30, 2013 : 7:44 a.m.

Sales of A123 Systems operation in Ann Arbor finalized by US bankruptcy court

By Paula Gardner

Two deals for the assets of bankrupt A123 Systems — including an office in Ann Arbor — were completed late Tuesday, according to reports in the Detroit News. The moves are expected to preserve about 1,000 jobs in Michigan.

Navitas Systems LLC plans to acquire about 40 A123 Systems Inc. employees in Ann Arbor, as it completes it $2.3 million acquisition of the government and research side of the battery maker's business.

The company hopes to double the size of the office, according to the report.

At the same time, Chicago-based Wanxiang America - the U.S. based headquarters of the $4.2 billion Wanxiang Group Corp., based in China - finalized its $256.6 million acquisition of the nongovernment business assets of A123 Systems, including facilities in two other states and operations in Livonia and Romulus.

The deals were worked out in December, according to previous reports.

The bankruptcy filing came in October.

A123 landed a $249.1 million economic stimulus grant from the U.S. DOE in August 2009. That came after the battery manufacturer won $125 million in tax credits and incentives from the Michigan Economic Development Corp. in spring 2009 and a $10 million cash grant from the state in fall 2008. The company received about $135 million of the grant.

From a New York Times report on the filing:

"A123, based in Waltham, Mass., was once considered one of the most promising grant recipients under the (Obama) administration’s $2 billion stimulus program for electric car development."

Ann Arbor-based T/J Technologies was acquired by A123 Systems in 2006. The company retained its Ann Arbor office as it planned to grow lithium-ion battery making capacity in the state.



Wed, Jan 30, 2013 : 6:20 p.m.

I'm confused! I thought our president recently said he was going to make sure this would not happen to the US. I guess it has nothing to do with spending money or increasing welfare payments. Go figure!


Wed, Jan 30, 2013 : 5:37 p.m.

98% of the Department of Energy's guaranteed loans are getting paid back. They made thousands of these loan guarantees for American companies. The *net* interest coming to the US Treasury, even after the 2% failures like Solyndra and A123 will be about 8 BILLION dollars. Not to mention the jobs created.


Wed, Jan 30, 2013 : 5:14 p.m.

The Chinese evidently value the possibilities for the technology. They have a longer term view of the markets and absconded with the technology developed with our tax dollars. We have a short term view of the m arrest and our domestic firms let it slide through their fingers.


Wed, Jan 30, 2013 : 7:57 p.m.

The Chinese also have the money to do so. They are the titans of industry. They steal our technology, manipulate their currency, and laugh at how stupid our government is................


Wed, Jan 30, 2013 : 4:23 p.m.

All the anti-Obama rhetoric is interesting. You forgot to mention that Michigan invested your money in this company too.


Wed, Jan 30, 2013 : 7:56 p.m.

Obama is Bush on steroids and a hard core ideologue..............bad combination when we needed just the opposite called fiscal conservative. We could have been emerging from the hard cuts if they were done four years ago. Instead we find an even deeper hole with the pain still to come only ten fold.


Wed, Jan 30, 2013 : 5:27 p.m.

thank you Jennifer Granholm


Wed, Jan 30, 2013 : 4:22 p.m.

And to think that in 1910 Tom Swift powered his electric runabout with a LI-Ion battery ("Tom Swift and his Electric Runabout", pub. 1910), claiming lead-acid was outdated and K-Ion was not suitable. And 100 years later we still can't make it work right.


Thu, Jan 31, 2013 : 3:41 p.m.

Obviously few Ann Arborites get the irony of Tom Swift and the Lithium Ion battery, which is not at all suprising. The book is a young boy's science fiction book, and the fact that he worked on Li-Ion batteries 60 years before scientists did, is remarkable to me. And the K-Ion battery wasn't looked at until recently, about 2006 or so - for which numerous patents have been submitted. Additionally, every single objection to electric vehicles was raised in the book. Surprisingly, the agreed to goals were precisely what they are today. Mileage, recharging stations and power. Too bad Tom Swift's author didn't patent it and develop it, he'd be rich today and perhaps we'd have had electric vehicles on the road instead of still scratching our heads while being told it's impossible by the experts. Innovation is not new, the will to do it is and will always be the obstruction.


Wed, Jan 30, 2013 : 4:29 p.m.

You seem to forget that there are billions of li-ion batteries that work just fine. I can remember lead acid batteries blowing up once in a while, too.

G. Orwell

Wed, Jan 30, 2013 : 4:13 p.m.

Our government, from Bush, Clinton, Bush to Obama are selling out the American people. First they purposely put in place all the extremely lopsided trade agreements in order to outsource all of our good manufacturing jobs. Now our government is selling off choice infrastructure, including hundreds of thousands of acres of oil and natural gas rich fields to the Chinese. Who needs enemies when we have a government like this.

Lizzy Alfs

Wed, Jan 30, 2013 : 2:34 p.m.

It will be interesting to see if the local office actually doubles in size.


Wed, Jan 30, 2013 : 7:50 p.m.

LIzzy; Could you do a follow up on this in a few months and see is we are on track? Seriously, it would generally be a good practice with any tax abatement/grant/government funded thing to see if anybody actually kept any promises. (ever)


Wed, Jan 30, 2013 : 3:49 p.m.

and it will be interesting to see if I wake up tomorrow morning as a 24 year old, 5'10" supermodel....not thinking either scenario is of a high probability...


Wed, Jan 30, 2013 : 2:23 p.m.

"A123 landed a $249.1 million economic stimulus grant from the U.S. DOE in August 2009. That came after the battery manufacturer won $125 million in tax credits and incentives from the Michigan Economic Development Corp. in spring 2009 and a $10 million cash grant from the state in fall 2008. " How many stories are we going to have to read about these alternative technologies failing taking more and more of our hard earned dollars with them? We're asked by the government to sacrifice, give up our carbon-based jobs and work for lower wages. We're told to accept Obamacare and then watch our jobs become part time while the system is overloaded and prices continue to rise. Borrow more and more and saddle future generations with that debt to meet the needs of the ruling environmentalist and socialist class. Regulations after regulation is added to the cost of doing business while that money could be used to increase wages and improve benefits it is spent to support government regulator and watchdogs. Taxes are too high, regulation is out of control, our government has sold us a bill of goods. We need to cut back spending and taxes, get the economy re-stabilized, and then spend money on things that have not had much success. The only problem know is the debt load is so high that there will be no relief for a long time to come even if cuts are made. Four more years...............of pain and agony.............


Thu, Jan 31, 2013 : 4:47 a.m.

timjbd - smart capitalists have money to spend to look for bargains. We blaze the trail with bad investments, run our country into the ground, and then sell to the bargain hunters who save their cash and grow their economy. It's much easier to prop up industries as you suggest when you don't have to borrow the money from your great grand children so they can pay it back to China............Fix the economy and lower taxes then we'll have the cash that China has. Too many entitlements and government is too big............


Wed, Jan 30, 2013 : 8:09 p.m.

The Chinese company that bought the assets of A123 is entirely propped up by the Chinese government. To whatever extent that it takes. That's how THEY win. Our companies cannot win because our Congress and the people that vote for them and fund their campaigns won't allow our government to act on behalf of American companies in nascent industries. As your comments show. The Chinese have no such restrictions. They just do what it takes. The "capitalists" (oil companies) in this country who won't allow the government to "pick winners and losers" have saddled us with their losing ideology and it's on display here. It fuels the status quo as far as they're concerned and status quo is where they rule.


Wed, Jan 30, 2013 : 7:52 p.m.

Epengar - I have no problem with any of them if they pay with their own money. We are financially broke as a nation. That money is taken from the private sector where real jobs are created and from the disposable income of the general public. Since 70% of our country's GDP is based on private sector spending it doesn't take a genious to see that when government takes that money and spends it foolishly there isn't much left to power consumer spending. You then get what we have today; a growing government and shrinking private spending and job growth. Four more years..............I can hardly wait.


Wed, Jan 30, 2013 : 5:29 p.m.

There are more stories about alternative technologies succeeding. Did you overlook them?


Wed, Jan 30, 2013 : 2:19 p.m.

The company received about $135 million of the $225 million from the DOE. $125 million from the Michigan Economic Development Corp. and a $10 million cash grant from the state. All together about $270 million in taxpayer value that provided 1,000 jobs in Michigan including 40 in Ann Arbor. Boy, what a stupid idea that was! To try and slow the January rains in Michigan. Why, we could have wasted $1 trillion on Iraq to keep the Chinese oil and A2 water flowing instead. But then the free-marketeer peanut gallery might complain about those wasted peanuts, too. Ha! Or that free-market governor who takes struggling taxpayer and senior's money to prop up his own favorite corporations. With only the empty 'promise' of more American jobs still yet to materialize. The Chinese government is not stupid. They know what a good investment is. Too bad your government is giving it all away to them - for peanuts!

Nicholas Urfe

Wed, Jan 30, 2013 : 2 p.m.

How much did the executives and board members make out of everything - the operations and the bankruptcy?


Wed, Jan 30, 2013 : 8:03 p.m.

No doubt they used the Romney Bain Capital model.

Paula Gardner

Wed, Jan 30, 2013 : 1:52 p.m.

Thanks to commenters who pointed out the lack of clarity of the corporate parenthood of Wanxiang. I just modified that paragraph to include links to some relevant background and also to clarify that the US arm of the company is part of the Chinese operation.


Wed, Jan 30, 2013 : 1:42 p.m.

Given the fires in the Li-Ion batteries on the 787 Dreamliner, the future of Li-Ion batteries may not be as bright as once thought. The jobs at A123 may all be gone shortly, depending on the findings of the NTSB.


Thu, Jan 31, 2013 : 3:01 a.m.

Sorry Mr. Urfe - My battery in my mobile phone is Ni-Cad, as are most of my portable tool batteries. I don't use those new fangled smart phones. When I move to one - then I will have to deal with Li-Ion batteries. But my comment stands - the NTSB is doing a deep dive on the Li-Ion batteries in the 787 and that may have knock on effects for that battery type.

Nicholas Urfe

Wed, Jan 30, 2013 : 2:02 p.m.

Don't look now, but that phone in your pocket, next to your other junk- It has a Li-Ion battery! Panic!


Wed, Jan 30, 2013 : 1:25 p.m.

I expected comments about Obama wasting our tax money , which is true , but at this point I think it's just beating a dead horse.This includes all the other billions wasted that went down the tubes


Wed, Jan 30, 2013 : 7:48 p.m.

Those who don't study history are doomed to repeat it. How is that latest budget coming along?

Kai Petainen

Wed, Jan 30, 2013 : 1:24 p.m.

it's a bit misleading to say that it is based in Chicago.... it's the US office for their operations... "Wanxiang America Corporation, based in Chicago, is the U.S. home office of Wanxiang Group Companies China. U.S. companies and customers can deal in U.S. dollar currency and U.S. contracts when working with China. Involved in automotive and industrial markets in the U.S., Wanxiang America is the source for all of Wanxiang Group/China's products in the United States"


Wed, Jan 30, 2013 : 1:21 p.m.

"Chicago-based Wanxiang America" Wanxaing would be more appropriately defined as a Chinese Company. A123's assets AND technology were purchased by the Chinese government.

Atlas Shrugged

Wed, Jan 30, 2013 : 1:04 p.m.

There was Solyndra. And now... "A123, based in Waltham, Mass., was once considered one of the most promising grant recipients under the (Obama) administration's $2 billion stimulus program for electric car development." And along come the Chinese to buy another failed enterprise we funded with our hard-earned tax dollars. Yipee!


Wed, Jan 30, 2013 : 8:07 p.m.

Tim help me understand how your comment relates to this article and this sale?


Wed, Jan 30, 2013 : 8:01 p.m.

Not to mention how much $$ was wasted by Bush/Cheney administration trying to set up US control of the middle east oil from Iraq... Astounding.


Wed, Jan 30, 2013 : 1:15 p.m.

Not to mention they now have gained patents and access to very sensitive military grade batteries. That we developed- despite what the administration is saying