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Tue October 16, 2012
Battery maker A123 files for bankruptcy protection
DETROIT (AP) - The U.S. operations of electric car battery maker A123 Systems filed for bankruptcy protection and its automotive assets are being acquired by Johnson Controls for $125 million.
The announcement Tuesday comes one day after A123 warned in a regulatory filing that it likely would miss some debt payments and could be headed for bankruptcy court.
A123, based in Waltham, Mass., got a $249 million U.S. government grant to help it build a battery factory in Michigan.
The bankruptcy filings do not include A123's subsidiaries outside of the U.S. But those assets also will be sold.
Johnson Controls got its own Department of Energy grant for $299 million to open a plant in Holland. This summer the company announced plans for a major expansion. Meanwhile, a nearby LG Chem battery plant (which got $151.4 million in DOE grants) has reportedly not produced a single battery and had it's workers on furlough.
President Barack Obama visited Holland twice to highlight the plants, for LG Chem's groundbreaking in 2010 and the opening of Johnson Controls plant in 2011.
A Johnson Controls spokeswoman confirms the company will "acquire A123’s automotive business assets, including all of its automotive technology, products and customer contracts, its facilities in Livonia and Romulus, Michigan, its cathode powder manufacturing facilities in China, and A123’s equity interest in Shanghai Advanced Traction Battery Systems Co., A123’s joint venture with Shanghai Automotive."
She says the company has a long-term commitment to being a market leader in the advanced battery industry and the move is consistent with that goal. She also said the "process is in its early stages" and would not provide further details or an interview at this point.
Calls to A123 Systems haven't yet been returned.