Opposition mounts against DOE-funded battery company’s sale to Chinese firm

The federal government’s review period concerning the sale of a bankrupt taxpayer-subsized battery company to a Chinese firm ends this month, and opposition to the deal from industry experts and competitors continues to mount.

A123 Systems, a battery manufacturer and supplier for the automobile company Fisker, went bankrupt in October 2012. It was then purchased in December 2012 by the Chinese company Wanxiang Group, through an auction run by Latham and Watkins, a law firm that contributed more than $200,000 to President Barack Obama’s re-election bid.  (RELATED: Latham conducts auction of troubled battery corporation)

A123 received a $250 million federal grant in 2009 from Obama’s stimulus program, making it a recent addition to the growing list of failed energy companies funded by Energy Department grants.

“I’m ringing alarm bells, and so are my colleagues,” Dean Popps — who served as acting United States assistant secretary of the Army for acquisition, logistics, and technology, and as co-chair of Strategic Materials Advisory Council (SMAC) — told The Daily Caller.

Popps expressed concern that the U.S. is losing its manufacturing, industrial and technological strength, and becoming more vulnerable to China.

“We are not taking a critical look at what China is doing in terms of assembling a portfolio of things that allow her to control our supply chain and  control our national security concerns,” Popps said.

“These batteries are used in satellites; these batteries are used in combat vehicles; these batteries are used in precision munitions – you know, wherever there’s sensitive stuff. It is the technology not only of the hour, but of the decade.”

A bankruptcy judge approved A123’s sale to the Chinese firm shortly after the corporation’s military contracts were sold to the newly-formed company Navitas, alleviating some national security concerns. Navitas still has to go through Wanxiang to make its product.

But the deal must be reviewed by the Committee on Foreign Investment in the United States. CFIUS is an inter-agency committee that determines whether a particular foreign investment into a U.S. company poses a national security threat.

A spokesperson for CFIUS declined The Daily Caller’s request for comment.

By law, information filed with CFIUS may not be disclosed by CFIUS to the public. The Energy Department also does not comment on information relating to specific CFIUS cases, including whether or not certain parties have filed notices for review.

The CFIUS review process, which takes 30 days, was extended to another 45 days in mid-December 2012. The review process ends this month, and SMAC — which is comprised of former U.S. government officials and industry experts — is trying to raise opposition to the deal before the review process ends.