Johnson Control still interested in A123 System although Wanxiang Group won the auction

Article by Christian A., on December 13, 2012

Even as Wanxiang Group Co. won the bid to acquire most of the bankrupt assets of A123 Systems Inc. for $256.6 million, the rival bidder Johnson Controls Inc. still keeps its interest in A123's automotive assets (which include its plants in Livonia and Romulus). Alex Molinaroli, president of JCI's power solutions business unit, said that this is because the U.S. government could still move to nullify the bid of Wanxiang (China's largest auto supplier).

The U.S. Department of Energy, which has given $132 million of a $249.1 million federal grant to A123, reasoned that it has liens on the property and equipment. And so, the Committee on Foreign Investment in the U.S. would first need to approve Wanxiang’s bid for Waltham, Mass.-based A123.

The Chinese supplier wasn’t able to secure CIFIUS' approval on a $465 million pre-bankruptcy agreement to purchase 80% of A123, which compelled an insolvent A123 to enter bankruptcy last October. Molinaroli said that it appears that if the government was ever going to approve Wanxiang’s bid, it should have occurred before bankruptcy so that they would have been able to avoid the mess.

He said that Wanxiang is incurring expenses on assets that it may not be able to keep. He added that if that’s the case then JCI will step in. He explained that JCI raised its bid of $125 million during auction, but withdrew with the belief that Wanxiang’s bid won’t be approved by the government.

It certainly seems like the U.S. Congress is opposed to Wanxiang. U.S. Sen. Debbie Stabenow, D-Mich., released a statement to indicate her opposition to the sale of A123 to Wanxiang due to anti-competitive practices by the Chinese. She said that she isn’t supportive of A123's sale to Wanxiang since there are “serious questions” about the possible impact of the technology transfer on U.S. national security and Michigan's economy. She cited China's history of anti-competitive practices as prompting a move to ensure that its businesses' intellectual property is secure.

If you liked the article, share on:

Comments

Recommended

A few months ago, Mercedes-Benz promised that they will be treating everyone to a “big surprise” during the Monterey Car Week. And true enough, many of us were stunned as...
by - August 19, 2017
McLaren has already shown some interest in electrifying their models. And initially, we thought that they will just use hybrid systems to use across their current lineup. Nevertheless, we have...
by - August 19, 2017
Fifty years after its glorious victory at the 24 Hours of Le Mans, Ford launches the 2018 Ford GT ’67 Heritage Edition at the 2017 Monterey Car Week. The red...
by - August 18, 2017
Hyundai has recently unveiled an unnamed pre-production model of its new fuel cell SUV. We don’t know what to call this model just yet, but sources say that this model...
by - August 18, 2017
This weekend at the 2017 Pebble Beach Concours d’Elegance, the BMW Z4 Concept will make its first public appearance. The good news is that we will finally have a real...
by - August 18, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries