President Obama’s plan to compete with China in the renewable energy industry took a hit today, as a struggling green car bettery maker that received hundreds of millions of taxpayer dollars is being purchased by a Chinese firm.
A123 Systems, Inc., received a $249.1 million Energy Department grant — plus a phone call from Obama — and another $141 million in tax credits and subsidies from the State of Michigan, but it had to lay off 125 employees as it lost $172 million through the first three quarters of 2011.
Obama had high hopes for A123. “Thanks to the Recovery Act, you guys are the first American factory to start high-volume production of advanced vehicle batteries,” he said in a phone call broadcast to the company’s employees. “I am looking forward to continuing to see the great work that you guys do in the years to come.”
Next time Obama addresses the company, he might want to call it a “Chinese factory” in order to acknowledge the latest news. “China’s Wanxiang Group Corp plans to invest up to $450 million in A123 Systems, taking an 80 percent stake in the U.S. company, A123 said on Wednesday,” Reuters reported today.
The company has faced a lawsuit for $55 million worth of defective batteries and its financial situation has only worsened this year, with “a second-quarter loss of $82.9 million, or 56 cents per share, compared with a loss of $55.4 million, or 44 cents per share, a year earlier,” as Reuters noted.