Republicans criticize Chinese acquisition of government-backed battery maker
Congressional Republicans on Monday expressed their frustration that federally backed battery manufacturer A123 Systems will be sold a Chinese manufacturing company, with one top GOP representative even calling on President Barack Obama to block the the sale.
“As with Solyndra and other failed ‘green’ firms, taxpayers already face a significant loss,” said Alaska Republican Sen. Lisa Murkowski. “The real irony is that these assets were developed in part with stimulus money that the federal government borrowed from countries such as China.”
“So now, not only do we have to pay that money back, we have also lost the technology we spent it on in the first place,” she added.
“It is exceedingly frustrating to stand by and watch the fruits of our taxpayer-funded research and development get shipped overseas to a Chinese firm,” said Georgia Republican Rep. Paul Broun. “It is a dirty cycle: We borrow money from China, use it to fund R&D in America, and then watch as the benefits of that research are reaped on foreign soil.”
On Sunday, the Chinese auto parts manufacturer Wanxiang Group won a high-stakes bid to acquire the now-bankrupt A123 Systems, which had received a $249.1 million federal grant as part of a federal stimulus package, as well as more than $100 million in grants and tax credits from Massachusetts.
The company filed for Chapter 11 bankruptcy protection in October 2012.
The New York Times reports that Wanxiang agreed to pay $256 million for A123’s automotive and commercial operations, which include its three U.S. factories.
A123 was heavily indebted, and had suffered losses every quarter since 2008. The company laid off 123 workers in November 2011, according to the Institute for Energy Research.
The company was in dire financial straits after struggling with costs associated with a recall of batteries supplied to Fisker Automotive, the maker of the luxury hybrid cars that reportedly caught fire and exploded in the aftermath of Hurricane Sandy. (RELATED: No injuries reported after several hybrid cars erupt)
Fisker was the recipient of a $529 million Department of Energy loan guarantee.
A123 was a major supplier to the military and the energy industries, raising national security concerns among some top Republicans.
“The Obama Administration … can – and should – block the sale to Wanxiang on the grounds that it would harm U.S. interests,” wrote Tennessee Republican Rep. Marsha Blackburn in the Hill. “[I]t would be the height of folly to allow a Chinese company – and potentially the Chinese military – to gain insight into, and access to, critical U.S. energy-related capabilities.”
The Times reported that the sale of A123 to Wanxiang will exclude all business with the company’s federal government and military contracts, which will be sold to the Illinois-based energy company Navitas Systems for $2.2 million.
“The results of this auction further expose the folly of the administration’s attempts to pick winners and losers, and provide huge subsidies to force the commercialization of technologies,” Murkowski said.
The A123 bankruptcy was one of many government-backed green-energy bankruptcies. (RELATED: Up to 50 Obama-backed green-energy companies bankrupt or troubled)
“In this case, taxpayers provided $124 million to A123, and now China will ultimately manufacture and sell any technologies that may have been derived from this investment,” Broun, the Georgia Republican congressman, said.
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