Tuesday, October 16, 2012

Battery Maker A123 Files For Bankruptcy, Sells Business to Johnson Controls

This is an interesting story for reasons other than those which we'll receive the press.  A123 Systems a company that was a beneficiary of government grants both before bankruptcy and even in being bought out by a company that is a recipient of government grants, and President Obama signaled this one out in promoting his initiatives.

Battery Maker A123 Files For Bankruptcy, Sells Auto Business - Corporate Intelligence - WSJ:
After last night’s announcement of a debt default, here’s the news from electric vehicle battery maker A123 Systems Inc.
“On October 16, 2012, A123 Systems, Inc. announced that it has entered into an asset purchase agreement with Johnson Controls, Inc. , which plans to acquire A123’s automotive business assets, including all of its automotive technology, products and customer contracts, its facilities in Livonia and Romulus, Mich., its cathode powder manufacturing facilities in China, and A123′s equity interest in Shanghai Advanced Traction Battery Systems Co., Alpha’s joint venture with Shanghai Automotive. The asset purchase agreement also includes provisions through which Johnson Controls intends to license back to A123 certain technology for its grid, commercial and government businesses. A123 also continues to engage in active discussions regarding strategic alternatives for its grid, commercial, government and other operations, and has received several indications of interest for these businesses.
Continue Reading at the Wall Street Journal Blog:

The interesting part of the story, to me, is that Johnson controls seems interested in the manufacturing capability, designed to service an electric automobile segment that is not developing rapidly, as it will, "license back to A123 certain technology for its grid, commercial and government businesses."
This fits with a narrative of batteries in the facilities industry (Johnson Controls having a strong building automation, and intelligence presence); a narrative that looks to be developed out of Germany, given the information in the August 2012 Spiegel Online report, Grid Instability Has Industry Scrambling for Solutions.  While Germany's grid has been stable in terms of measured outages measured by a certain duration (I believe the figure is 15 minutes), it has not been stable at hitting the regular cycles per second.
The technology may be failing for automobiles but viable for delivering a UPS.

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