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Chinese Firm Wins Bid For US-Backed Battery Maker
theodp writes "On September 13, 2010, President Obama called A123 Systems from the Oval Office to congratulate them on opening the nation's first manufacturing facility to mass-produce electric vehicle batteries, which the White House noted was made possible by a $249 million Recovery Act grant the company received the prior August. 'When folks lift up their hoods on the cars of the future,' the President said, 'I want them to see engines and batteries that are stamped: Made in America. And that's what you guys are helping to make happen.' But on Saturday, the assets of A123 Systems were auctioned off to the Wanxiang Group, a large Chinese auto parts maker. Wanxiang agreed to pay $256 million for A123's automotive and commercial operations, including its three factories in the United States. Forbes reports that A123's stock, which closed at 7 cents a share on Friday, is now worthless."
Free market my ass. This is corporatism. Allow the corporation to do what they want at all costs. There is no reason that the government should NOT be allowed to designate that funds it spends benefits its citizens over other people. EVERY OTHER country in the world does this.
Let the nitpicking and the corporate hothead flaming begin below....
This is the free market in action. Would you rather the White House block the sale?
I'd rather the White House not give them $250M in taxpayer money in the first place. How exactly was that free market in action?
all the IP will go to the Chinese.
At least this time we got them to pay for it.
If Slashdot were chemistry it would look like this:Cadaverine
I'd like to say this is speculative investment, and I'd also rather my governmenet not use tax dollars to engage in such speculative investment at all.
But it is, in fact, crony capitalism, or worse, pure fraud.
No, wait, it's just fraud. We are being robbed.
deleting the extra space after periods so i can stay relevant, yeah.
In a free market, a failing company would fail. In this case, the government took $249 million in tax dollars and gave it away. This is not the free market.
Love sees no species.
As of 2012 $129 million of the grant was used to build plants in Michigan (Romulus and Livonia); the remaining grant money has not been tapped (the grant was extended to 2014, but with the company in bankruptcy...) Originally Johnson Controls was going to buy (and use) the plants; it is still unknown if the plants will be used, but speculation is that at least one of the plants will be used. Note that the grants were backed by all of the Michigan members of Congress, despite the party. All of them wrote letters of endorsement to the DOE. The loan program that issued the grants was created in fall of 2008. The loan program predates Obama's presidency; the company applied in January and Obama because president January 2009. Please don't make this a partisan thread. This is what looked like a promising company that had a market in 2009 and needed to build manufacturing capacity - and the market disappeared (Chrysler closing its EV division was the major hit)
I have to admit that I'm irritated that as a US taxpayer my pocket was picked to redistribute $250 million to a company now owned by China.
Because that is not how they play this game.
Look at how they dumped solar cells as a great example.
If we add that A123 is the sole provider of batteries for the Fisker Karma, would you start to care? That A123 is a provider of MW-scale batteries to AES Corp, for use in windfarm smoothing and grid services?
I would have preferred that the government not gotten in the business of payouts to its campaign contributors, but elections have consequences. Usually corrupt consequences, but what can you do.
The Republican politicians who voted for the energy policy act of 2007 were for sale. And like any good investment, they paid off, leaving somebody else to hold the bill.
Lets take a look at the Senate roll call on the bill that actually gave them this money, the American Recovery and Reinvestment Act of 2009:
Democrats - 55 yeas - 0 nays
Republicans - 3 yeas - 38 nays
Independents - 2 yeas - 0 nays (one is an "Independent Democrat")
Now lets take a look at the House roll call on this bill:
Democrats - 244 yeas - 11 nays
Republicans - 0 yeas - 177 nays
Yet again the Democrats blame the Republicans for what the Democrats did all by themselves.
"His name was James Damore."
Public money is best spent on things private companies can't/won't do.
The best long term thing Government can do to help the country is finance research and education that form the building blocks for new companies. By comparison there are boat loads of investment dollars floating around in the private sector, the Government has no special way of knowing who the winners will be over private investors and the dollars are less needed there anyway. Financing companies is much riskier always, I guess I can see floating a loan to an established company in a crisis, but that is about it.
Republicans and, worse yet, Democrats both have become overly hypnotized with the power of "Private Enterprise". But people who run private companies are still just people. Better for Government to refocus on what is does well and assure plentiful funding for that. So if you really want to help produce electric cars, put out money for research at Universities and have open contracts for US manufacturers to sell the Government electric cars.
Xerox Parc were famous for innovating like hell, but being completely unable to monetize that innovation. Other people took their inventions and ran with them.
The USA is doing this on a national level. America innovates -- China, buys or steals the IP, then destroys American business, and yet people whine about the lack of 'pure' free markets, as if the beggar-thy-neighbour, merchantilist Chinese are doing everything they can to destroy Western business.
Time for people, especially the free market idealists to pull their heads out of their arses, and realise that the crypto-fascist Chinese Communist Party is waging a long, generational war against the West, and are hell bent on world domination.
When competing with the Chinese, all options must be on the table. If that means we're not simon-sure free-marketers, so what? If the government puts up seed money to kick-start American national champions and the bet turns sour, so what?
Ideological purity will get us nowhere at the end of the day. Only winning matters. Time to grow some balls, and learn how to fight as dirty as the Red Chinese.
I'd like to say this is speculative investment,
No it wasn't. It was a grant , not a loan, not an investment. That means the government just gave them the money with no requirement or expectation that it would be paid back.
Yes, but I'd like to think the gov't doesn't just give away money for the hell of it.
'When folks lift up their hoods on the cars of the future,' the President said, 'I want them to see engines and batteries that are stamped: Made in America. And that's what you guys are helping to make happen.'
That sounds like an expectation to me.
We are being robbed.
How can you be robbed of something you gave away?
Because I didn't give it away. Some group of assholes did. Most of whom I did not vote for.
all the IP will go to the Chinese.
At least this time we got them to pay for it.
But who receives payment of the auction proceeds? I'm guessing it won't be the people who put up the $249 recovery funds.
This is not the free market.
First and foremost, what do you think a free market is?
Second, we haven't had *free markets for over 100 years and we don't want free markets.
Competitive markets are where the real growth is found and the only way to get competition is to restrain the worst impulses of the free market.
Third, this is what we have: https://en.wikipedia.org/wiki/Mixed_economy
It's better than a completely free market.
*For all definitions of "free"
[Fuck Beta]
o0t!
And the company actually had customers and contracts, but needed money to build manufacturing capacity (hence the grants). Then they had quality issues, plus Chrysler closed down its Electronic Vehicle division, and hence the bankruptcy. Of the 123 million that was actually spent, there are very large physical assets sitting in Michigan which may still be used (to, you know, employ people). The remaining 100 million was never "given" by the government to anyway; its still sitting in an approved grant account controlled by the US government. I now return you to your ranting.
So using tax dollars to lower the price of your products to drive competitors out of business is competition?
So what is your bar for cheating?
There was an engineering professor in California named Terman who taught his students that they shouldn't just study the technology, they should also look at how to start a business, and keep their eyes out for opportunities.
Two of his students were Hewlett and Packard.
You should really read further. Less than half the money was spent, and their sustainable product's sole client pulled out after demanding highly-specialized retooling, rendering their product line worthless without another infusion of cash. The owners have decided to cut their losses and have been in bankruptcy for some time now -- the sale is pending bankruptcy court approval. Outstanding creditors will be repaid out of the $256M sale price, but the US taxpayers (who provided a grant), and the stockholders (who have no recourse), will be left empty-handed. The owners are very likely personally out a very large sum of money, as outstanding creditors will soak up all of the liquid assets, including US grant money, once the sale is complete.
On the upside, as stated, at least taxpayers are not out the entire tab.
Wanxiang has submitted the highest bid, but it has not been approved by the bankruptcy courts. There are a number of senators who are trying to have the buyout blocked because of A123's relationship with the Dept. of Defense. So while it's looking like our tech is heading East, it's not a forgone conclusion.
http://www.detroitnews.com/article/20121209/AUTO01/212090327/1148/rss25
remind me what would you call the "bailout" that saved some American banks
Graft and corruption
Aah, change is good. -- Rafiki
Yeah, but it ain't easy. -- Simba
No, not really. Considering that somewhere around half of the population pays no taxes at all.
The above statement is simply false. The article that you quote says as much, pointing out that not paying income tax is not the same as not paying any taxes. People with low income pay SS and Medicare taxes, state and local taxes, personal property tax, and sales tax. The total tax burden on low income people is substantial.
The reason that low income people do not pay federal income tax is that they are making so little money, and when you add in exemptions, credits, deductions, etc, they are not supposed to pay anything. Retired people, veterans, handicapped people with MS, students, unemployed people don't make enough to justify any taxes as they are written. We can argue about whether those exemptions, deductions, and credits are justifiable. A better idea would be to make sure that they make enough that taxes are justified.
The more people I meet, the better I like my dog.