In October 2012, A123 Systems filed for bankruptcy, citing poor sales of electric and extended range electric vehicles, its prime target market. Now, it’s time to switch targets, if not technologically speaking, then regionally.
A123 Systems, an advanced-technology battery developer, was simply ahead of its time, before the electric-vehicle boom, as well as too specialized, focusing only on electrified vehicles. A123’s customers included, among others, Fisker Automotive, General Motors, and SAIC Motor Corporation, in China. Chinese auto parts company Wanxiang Group, won the bidding to take over A123 Systems assets, which didn’t go over well with potential American Investors.
It’s been just about a year since the takeover, and a new CEO has been named to carry the company forward. A123 Systems‘ automotive division’s former head, Jason Forcier, has been named CEO. Seeing as its former customers have either moved on or failed, A123 needs to look to greener pastures. For example, General Motors is having its batteries, for the Chevy Spark, made by LG Chem, in Michigan, and Fisker Automotive has stopped production has declared bankruptcy . Even though A123’s new CEO, executives, and manufacturing will still be in Livonia, Michigan, its new market will be in China.
Wanxiang Group, who bought A123 Systems assets at quite a bargain, will keep production here in the United States, and has investment interests in quite a few American companies. Unfortunately, the market in the United States is tight, so where better to look than economically-booming China, especially since China has such great incentives for electric-vehicle manufacturers?
UPDATE: Previously, I mentioned that Fisker Automotive had declared bankruptcy. After reading a report on Energy.gov, which stated, “Despite Fisker Automotive’s bankruptcy setback, the DOE loan portfolio remains very strong…” Fisker did hire a bankruptcy and restructuring firm, Kirkland & Ellis LLP, earlier this year, but didn’t declare bankruptcy. The Department of Energy loan has since gone to auction but, since the government shutdown, there has been no new information regarding the status of the auction and whether Fisker Automotive gets a second chance.
Image © A123 Systems
jerrykroll I guess I was getting ahead of myself. I had gathered from this statement from Energy.gov that the bankruptcy was a done deal:”Despite Fisker Automotive’s bankruptcy setback, the DOE loan portfolio remains very strong — and is playing a crucial role in helping America’s auto industry thrive, innovate and compete.” http://energy.gov/articles/update-fisker-automotive-and-energy-department-s-loan-portfolio
They did hire a bankruptcy and restructuring firm, in April, but didn’t file for bankruptcy.I guess they’re looking for second chance judging from the auction of their DOE Loan on October 7. Since the government shutdown, there hasn’t been any news from DOE regarding the auction.
Where did this author hear that Fisker Automotive has “declared bankruptcy”? Is he making things up or does he have some mysterious inside source for this information?