recommended reading

Chinese firm rescues beleaguered Energy-backed company

An electric car battery being charged.

An electric car battery being charged. // Koji Sasahara/AP file photo

A123 Systems, a Department of Energy-backed company that makes advanced batteries for electric vehicles, had to be rescued from collapse by a Chinese firm, the American company announced Wednesday.

Wanxiang Group, one of China's largest auto parts makers, agreed to provide A123 a $450 million lifeline. "Today's announcement is the first step toward solidifying a strategic agreement that we believe would remove the uncertainty regarding A123's financial situation," A123 Systems Chief Executive Officer David Vieau said in a statement.

The company’s losses have been mounting. For the quarter ended June 30, A123 reported a loss of $82.9 million, or 56 cents per share, compared with a year-earlier loss of $55.4 million, or 44 cents per share, the Wall Street Journal reports. Revenue fell 53% to $17 million.

A123 was awarded $249 million in grants from the Energy Department and has used about half so far to pay for some of the costs of building a factory in Livonia, Mich. Energy would not approve any changes that allowed the grant money to be used for anything other than investment in the U.S. manufacturing facilities, a White House spokesperson told the Journal. The Wanxiang deal met with criticism on Capitol Hill. In a statement to Bloomberg, Rep. Cliff Stearns, R-Fla., charged Energy and the Obama administration of failing to prevent taxpayer-funded intellectual property from being transferred to foreign competitors. He added that the deal raised national security risks.

Stearns has also been a vocal critic of the Obama Administration’s decision to finance failed solar power company Solyndra.

Threatwatch Alert

Thousands of cyber attacks occur each day

See the latest threats

JOIN THE DISCUSSION

Close [ x ] More from Nextgov
 
 

Thank you for subscribing to newsletters from Nextgov.com.
We think these reports might interest you:

  • It’s Time for the Federal Government to Embrace Wireless and Mobility

    The United States has turned a corner on the adoption of mobile phones, tablets and other smart devices, outpacing traditional desktop and laptop sales by a wide margin. This issue brief discusses the state of wireless and mobility in federal government and outlines why now is the time to embrace these technologies in government.

    Download
  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

    Download
  • A New Security Architecture for Federal Networks

    Federal government networks are under constant attack, and the number of those attacks is increasing. This issue brief discusses today's threats and a new model for the future.

    Download
  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

    Download
  • Software-Defined Networking

    So many demands are being placed on federal information technology networks, which must handle vast amounts of data, accommodate voice and video, and cope with a multitude of highly connected devices while keeping government information secure from cyber threats. This issue brief discusses the state of SDN in the federal government and the path forward.

    Download
  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

    Download

When you download a report, your information may be shared with the underwriters of that document.