Battery maker A123 files for bankruptcy protection
Posted:
Updated:
A123 Systems Michigan headquarters
By TOM KRISHER AP Auto Writer
DETROIT (AP) -- Short of cash and hurting from weak sales of electric cars, battery maker A123 Systems Inc. filed for bankruptcy protection on Tuesday and quickly sold its automotive assets.
The moves came one day after the company warned it likely would miss debt payments and could be headed for restructuring under Chapter 11. Auto parts maker Johnson Controls Inc. will buy the company's automotive business for $125 million.
A123 has struggled for several years as Americans have been slow to embrace electric cars. The company has yet to post a profit and lost $83 million in the second quarter. Just two months ago, A123 announced a $450 million lifeline from Chinese auto parts maker Wanxiang Group Corp., but A123 said in a statement that the deal has been scrapped.
The Chapter 11 filing is likely to spawn more criticism of the Obama administration's funding of alternative energy companies. The lithium-ion battery maker received a $249 million grant from the Department of Energy in August 2009 to help it build U.S. factories. But such grants have been criticized by republicans, who say Obama wasted stimulus money on the companies. Critics point to Solyndra LLC, a politically connected and now-bankrupt solar power company, which left taxpayers on the hook for $528 million.
A123's stock, which traded for more than $20 on the day of its initial public offering in 2009, fell to 6 cents in late morning trading. The stock closed Monday at 24 cents.
Using its federal stimulus grant, the company set up manufacturing operations in the Detroit suburbs of Livonia and Romulus, Mich. The company has contracts to make batteries for General Motors Co., BMW AG, Fisker Automotive and others.
Unlike a loan, the company's $249 million government grant does not have to be repaid. A123 had to match the grant money as it was used. So far the company has drawn about $129 million of the grant, spokesman Dan Borgasano said Tuesday.
Johnson Controls will get A123's automotive assets, including lithium-ion battery technology, products and customer contacts. It will also take over the factories in Michigan, cathode ray factories in China and an equity interest in a Chinese battery company.
A123 also said it is in talks to sell its grid, commercial, government and other operations that weren't purchased by Johnson Controls.
Subsidiaries outside the U.S. were not included in the bankruptcy filing.
-------- AP Auto Writer Bree J. Fowler contributed to this report from New York.
Tuesday, May 21 2013 9:50 AM EDT2013-05-21 13:50:04 GMT
Find out how you can help the victims of Monday's deadly tornado that ripped through the Oklahoma City suburbs, killing dozens and flattening neighborhoods, schools and businesses.
Find out how you can help the victims of Monday's deadly tornado that ripped through the Oklahoma City suburbs, killing dozens and flattening neighborhoods, schools and businesses.
Tuesday, May 21 2013 7:43 AM EDT2013-05-21 11:43:15 GMT
Gustav Nyquist and Drew Miller scored 31 seconds apart midway through a previously scoreless game, helping the Red Wings beat the Blackhawks 3-1 on Monday night for a 2-1 series lead.
Gustav Nyquist and Drew Miller scored 31 seconds apart midway through a previously scoreless game, helping the Red Wings beat the Blackhawks 3-1 on Monday night for a 2-1 series lead.
Tuesday, May 21 2013 7:35 AM EDT2013-05-21 11:35:00 GMT
Police say a 55-year-old woman is dead and two men are wounded following a shooting at a vacant Detroit residence believed to have been used for drug activity.
Police say a 55-year-old woman is dead and two men are wounded following a shooting at a vacant Detroit residence believed to have been used for drug activity.
Tuesday, May 21 2013 7:23 AM EDT2013-05-21 11:23:29 GMT
Basehunters, a storm chasing team from Norman, Okla., captured over three minutes worth of video showing Monday's deadly monster tornado that roared through the Oklahoma City suburbs.
Basehunters, a storm chasing team from Norman, Okla., captured over three minutes worth of video showing Monday's deadly monster tornado that roared through the Oklahoma City suburbs.
Monday, May 20 2013 11:08 PM EDT2013-05-21 03:08:56 GMT
A small dog was taken from a woman's car on Sunday. Now a woman claims she wasn't trying to steal the dog. She was trying to save its life because it was locked in a car on a hot day.
A small dog was taken from a woman's car on Sunday. Now a woman claims she wasn't trying to steal the dog. She was trying to save its life because it was locked in a car on a hot day.
Monday, May 20 2013 11:03 PM EDT2013-05-21 03:03:59 GMT
Some residents in Clinton Township say they are upset over a horrible smell that seems to be at its peak when temperatures soar. They claim it has been going on for years.
Some residents in Clinton Township say they are upset over a horrible smell that seems to be at its peak when temperatures soar. They claim it has been going on for years.
Monday, May 20 2013 9:54 PM EDT2013-05-21 01:54:16 GMT
Wayne County Circuit Judge Wade McCree is fighting to save his job and his career. Monday, the woman who was once his mistress testified about their numerous sexual encounters.
He once said there was no shame in his game, but now Wayne County Circuit Judge Wade McCree is fighting to save his job and his career. Monday, the woman who was once his mistress testified about their numerous sexual encounters.
A123 Systems Michigan headquarters
