A123 Saved By Chinese Investor
|   Friday, August 10, 2012
A123 Systems, an American high tech lithium-ion battery maker and centerpiece of the Obama administration's "green jobs" revolution, will be rescued by a Chinese auto part company, Wanxiang. This move will enable the Chinese to acquire up to 80% of the company in return for an investment of 450 million dollars.

A123 is the recipient of a 249 million dollars "green technology" grant from the federal government. It believed in their own and everyone else's propaganda about millions of electric vehicles that would soon be filling the nation's highways.
That will happen, but not in the immediate future.
Therefore, it jumped the gun and went on to prove the old saying that goes like this: "stupidity and waste increase with the amount of money available". A lot of money went into a headquarters complex, filled with its magnificent office suites and marbled lobbies, however that was something only a company with entire cartloads of money would afford. The production capacity was way, way too optimistic to ensure such investments are feasible, not to mention buyers were not looking their way.

The market was in favor of speed, range and lower prices of conventional cars, even at the high price a gallon of fuel costs these days. Government critics were just waiting for this opportunity to bash the program and say that money could have been invested in more productive ways. And you have to admit, they have a legitimate point of view. At the end of day, results matter, and the result is that a Chinese company will get its hands on American technology.

If you believe in the free market approach, and leave behind all the political rhetoric about communism and the likes, then you would have nothing against this move. We could start an Internet war based on for and against positions, but that is not the issue here. The issue is that it proves to the world how the old ways of thinking are slowly and steadily superseded. The new global market cares only about money and the survival of the fittest, just like things were a century ago. That is a good thing, but also has a great potential for disaster.

The consequences of this move are easy and yet hard to foresee. Some workplaces are saved in the US right now, but what about in the future? A new factory could easily be set up in China to reduce costs, while the old one will be shut down. Endless speculation could be brewed here.

The fault lies with the government for its lack of action and long term vision, but the private sector is also to blame. They grew complacent based on past successes and lost sight of the current reality. They also grew greedy, and while they had things going for them they didn't want to share, but when things were a bit shaky, they suddenly scream to be helped by the ones with whom they didn't want to have anything to do back when things were rosy.

A123 is just another victim, but the way things are going, the future doesn't seem particularly encouraging. The Chinese are starting to move in.
PHOTO GALLERY
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