New Information
Classified Hill briefing set on A123 sale
John McArdle, E&E reporter
Published: Wednesday, January 30, 2013
A classified Capitol Hill briefing is scheduled for tomorrow with the obscure federal panel that approved the sale of a stimulus-funded American electric-car battery maker to a Chinese auto manufacturer's U.S. subsidiary.
The Committee on Foreign Investment in the United States (CFIUS) doesn't release details about its reviews, which are designed to determine whether certain sales might affect U.S. national security interests. But the Chinese company, Wanxiang America Corp., announced yesterday that the committee had greenlighted its purchase of A123 Systems Inc.
Some members of Congress who object to the deal believe the sale of A123, which has worked on military contracts, could put critical technologies in the hands of the Chinese government.
By law, CFIUS is required to brief certain congressional leaders upon request. And yesterday Sens. Chuck Grassley (R-Iowa) and John Thune (R-S.D.) called for such a briefing. It will take place tomorrow afternoon and include certain Senate staffers.
According to a release from Wanxiang, the sale of A123 will include all the company's automotive, grid and commercial business assets, including technology, products, customer contracts, and U.S. facilities in Michigan, Massachusetts and Missouri; its manufacturing operations in China; and its equity interest in Shanghai Advanced Traction Battery Systems Co., A123's joint venture with Shanghai Automotive.
The sale won't carry with it A123's Ann Arbor, Mich.-based government and U.S. military contracts. Those assets are set to be sold to Woodridge, Ill.-based Navitas Systems LLC for $2.25 million.
But some lawmakers had pushed the administration to block the sale through CFIUS because they argued that A123's business and military intellectual property could not be so easily separated. Members who object to the deal are also upset with the sale because, before it went bankrupt, A123 won a $249 million grant through a Recovery and Reinvestment Act program funded by the Department of Energy.
"Technology produced by A123 and funded by U.S. taxpayers should not simply be shipped off to China so that the military applications for these materials can be reproduced abroad," Thune said yesterday.
To date, DOE has paid about $133 million of the grant amount, and the agency has said it will not disburse any additional funds to Wanxiang.
In addition, DOE spokesman Bill Gibbons yesterday said that all grant dollars were used to facilitate the manufacture of automotive-grade lithium-ion batteries and not for research and development.
"The Energy Department's Recovery Act grant to A123 was used for the construction of brick and mortar advanced battery manufacturing facilities at two Michigan locations," Gibbons said.
"Consistent with the intent of that investment, the purchase of these assets includes the Energy Department's requirement that the plants and equipment partially paid for by the Recovery Act stay in Michigan and continue to operate, generating job opportunities for American workers and helping to establish a domestic manufacturing base for this growing global market," he added.
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