Auction for assets of A123 begins in Chicago

Fisker was forced to temporarily shut down production of its Karma luxury sedan due to A123’s troubles, and is hoping for a quick resolution.

 

The auction for the assets of bankrupt battery maker A123 Systems, which got underway on Thursday, and could run into next week, is sure to be watched closely not only by EV industry analysts, but by political players as well. Reuters reported that the primary bidders are Milwaukee-based Johnson Controls, Chinese auto parts giant The Wanxiang Group, NEC Corp of Japan and Siemens AG of Germany. Other companies may bid for smaller chunks of A123.
 
A123’s customers include General Motors, BMW, the US military and Fisker Automotive, which depends on A123 as its sole battery supplier. Fisker was forced to temporarily shut down production of its Karma luxury sedan due to A123’s troubles, and is hoping for a quick resolution and a new owner that will get the batteries rolling again promptly.
 
A123 received a $249 million grant from the US government, and the feds will surely be scrutinizing any deal carefully. If one of the foreign buyers wins the auction, it will probably need approval from the US Committee on Foreign Investment. It will be interesting if Wanxiang turns out to be the winning bidder, as there is sure to be substantial opposition to A123’s advanced technology, which was partly funded with taxpayer money, going to a Chinese company.
 
Wanxiang supplies parts to GM and Ford, among others, and does about $1 billion in business in the US annually. It has had its eye on A123 for a while – earlier this year, it launched a $465 million bid to save A123 from bankruptcy, but that deal fell through.
 
 
Source: Reuters