* Battery maker filed for bankruptcy in Delaware
* U.S. objects to terms of proposed sale order
* Retired military leaders oppose sale to Wanxiang
By Tom Hals
Nov 28 The U.S. government said bankrupt A123
Systems Inc cannot be sold without its consent because the
battery maker received a $249 million grant from the Energy
Department, according to court documents.
Johnson Controls Inc of Milwaukee and China's
Wanxiang Group Corp are battling over who will buy A123, a maker
of lithium ion batteries for electric cars. The prospect of a
U.S. government-financed company being sold to a Chinese rival
has drawn opposition from some politicians, who say technology
underwritten by U.S. taxpayers should not fall into foreign
The government objected on Tuesday to the terms of the
company's proposed sale order, saying in a court filing that its
approval was needed before the government's clean energy grant
could be assigned to a buyer. A123 can still draw $120 million
under various government grants, according to court records.
The government also said the terms of the sale must include
its right to demand compensation for the sale of assets such as
equipment or property that were financed with the clean energy
In the filing by Stuart Delery, a principal deputy assistant
attorney general, the government did not indicate whether it
supports or opposes any specific buyer for the company. Other
parties that have expressed an interest in A123 include NEC Corp
of Japan and Siemens AG of Germany.
A spokesman for A123 declined to comment.
A123 filed for Chapter 11 bankruptcy protection in October
with a plan to sell its battery business to Milwaukee-based
Johnson Controls for $125 million. The planned sale is subject
to better bids at an auction next month. Wanxiang, an auto parts
supplier, has said it intends to make a bid.
The money from the auction will go toward paying off A123's
Also on Tuesday, a group of retired military leaders and
industrial consultants urged the Committee on Foreign Investment
in the United States to block the possible sale to Wanxiang.
"This transaction would no doubt result in the loss of
American jobs and the transfer of technologies critical to our
nation's infrastructure and military hardware to China," said
the letter from the Strategic Materials Advisory Council. Among
those who signed the letter were Barry Costello, a retired vice
admiral, and two retired major generals from the U.S. Air Force,
Robert Latiff and Jeffrey Reimer.
Two Republican U.S. senators, John Thune of South Dakota and
Chuck Grassley of Iowa, warned earlier this month Wanxiang could
gain access to A123's military contracts if it were allowed to
buy the company.