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:

  • 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
  • PIV- I And Multifactor Authentication: The Best Defense for Federal Government Contractors

    This white paper explores NIST SP 800-171 and why compliance is critical to federal government contractors, especially those that work with the Department of Defense, as well as how leveraging PIV-I credentialing with multifactor authentication can be used as a defense against cyberattacks

    Download
  • Toward A More Innovative Government

    This research study aims to understand how state and local leaders regard their agency’s innovation efforts and what they are doing to overcome the challenges they face in successfully implementing these efforts.

    Download
  • From Volume to Value: UK’s NHS Digital Provides U.S. Healthcare Agencies A Roadmap For Value-Based Payment Models

    The U.S. healthcare industry is rapidly moving away from traditional fee-for-service models and towards value-based purchasing that reimburses physicians for quality of care in place of frequency of care.

    Download
  • GBC Flash Poll: Is Your Agency Safe?

    Federal leaders weigh in on the state of information security

    Download
  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

    Download

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