What is in this article?:
- A123 Systems Inc. said it has agreed to sell its assets to Johnson Controls Inc. (IW 500/33) for $125 million.
- Waltham, Mass.-based A123, which reported a net loss of $258 million for full-year 2011, also said it has secured nearly $73 million in "debtor-in-possession" financing from Johnson Controls to keep its operations going during the sale process.
Battery Boom or Bust?
In 2009, the Department of Energy awarded $249 million to A123 Systems as part of President Obama's American Recovery and Reinvestment Act. A123 has used $132 million of that grant, according to the Energy Department.
In September 2010, the company opened a new 291,000-square-foot factory in Livonia, Mich., and then-Gov. Jennifer Granholm declared that it was part of her plan to make Michigan "the advanced-battery capital of the world." A123 secured $100 million in refundable tax credits from the Michigan Economic Development Corp. to help finance the facility.
Under President Obama, the Department of Energy has awarded "$2 billion in grants to 29 companies to build or retool 45 manufacturing facilities spread across 20 states to build advanced batteries, engines, drive trains and other key components for electric vehicles," according to Dan Leistikow, director of public affairs for the Energy Department, in a blog post on Wednesday.
Leistikow asserted that the investments have enjoyed "strong bipartisan support."
"More than 30 of these plants are already in operation, employing thousands of American workers, and our grants were matched dollar for dollar (or more) by private investments," he wrote.
Regarding A123 Systems, Leistikow asserted: "In an emerging industry, it's very common to see some firms consolidate with others as the industry grows and matures."
"A123, which has been building batteries for electric vehicles as well as for the nation's power grid, quickly established itself as an innovative player in the market," he wrote. "[The] news means that A123's manufacturing facilities and technology will continue to be a vital part of America's advanced battery industry."
Leistikow noted that A123 Systems received a $6 million grant in 2007 as part of the Bush administration's efforts to promote advanced-battery manufacturing.