Wanxiang would not acquire A123’s Ann Arbor, Mich.-based government business, which includes all of its U.S. military contracts. Those would be acquired for $2.25 million by Navitas Systems, a Woodridge, Ill.-based provider of energy storage products for commercial, industrial and government agency customers.
Wanxiang, which has been investing in the United States since 1994 and has 3,000 U.S. employees, beat out Johnson Controls and two foreign firms, Japan’s NEC and Germany’s Siemens. The Chinese company is one of China’s biggest private firms with worldwide revenue of $8 billion, and it said that this is its fifth “clean energy” investment in the United States this year.
Johnson Controls, whose bid for automotive and government businesses was paired with NEC’s bid for grid storage and commercial business, said it dropped out of the bidding on Saturday.
“Wanxiang’s offer was beyond the value of those assets to Johnson Controls,” Alex Molinaroli, president of Johnson Controls’ power solutions subsidiary, said in a statement Sunday. Johnson Controls makes lithium ion batteries for automobiles.
The auction, held at a Chicago law firm, had sparked criticism from some leading lawmakers and others who said that a classified A123 contract with the Defense Department was reason to block a Wanxiang purchase.
In addition, many GOP lawmakers used the auction of A123, which received $133 million in Energy Department grants under the American Recovery and Reinvestment Act of 2009, to allege that the Obama administration had made poor use of taxpayer money. Others said that a foreign company shouldn’t benefit from technology developed, in part, with public funding.
“This is the latest in a seemingly continuous cascade of predictable, super-sized clean-tech commercialization failures, which unfortunately hemorrhages our critical national technology and intellectual property advantages to the Chinese and other economic competitors,” said Andy Karsner, who under President George W. Bush was assistant energy secretary for efficiency and renewables with responsibility for vehicle technologies.
But Wanxiang’s top executive and an Energy Department spokesman said last week that the point of the economic stimulus grant was to create jobs by building a Michigan manufacturing facility, which Wanxiang said it plans to keep open. The money was not for research, the Energy Department said.
“We think adding A123 to our portfolio of businesses strongly aligns with our strategy of investing in the automotive and clean-tech industries in the U.S.,” Ni Pin, president of Wanxiang America, said in a statement Sunday. “We plan to build on the engineering and manufacturing capabilities that A123 has established in the U.S. and we are committed to making the long-term investments necessary for A123 to be successful.”