Chinese Connection Controversy

 

A123 Systems (Nasdaq:AONE), a developer and manufacturer of advanced Nanophosphate® lithium iron phosphate batteries and systems, has announced the execution of definitive agreements with Wanxiang Group Corporation, which follows the non-binding memorandum of understanding (MOU) that A123 signed with Wanxiang on August 8, 2012. Wanxiang is China's largest automotive components manufacturer and one of China's largest non-government-owned companies. Under the terms of the agreements, Wanxiang plans to invest up to $465 million in A123, which includes an initial credit extension of $25 million that A123 expects to receive this week. The full investment from Wanxiang is expected to provide A123 with the capital necessary to strengthen the company's competitive position in the global vehicle electrification and grid energy storage markets.

Is this a good thing? A123 Systems believes so, according to its chief executive officer, Dave Vieau.

 "We consider today's announcement to be a strong validation of A123's technology and the company's ability to compete in high-growth markets," said Vieau, CEO. "We believe that the significant commitment of capital from Wanxiang would help strengthen A123's financial position, and by leveraging Wanxiang's global capabilities, we expect to see increased demand for our products. Further, Wanxiang has demonstrated its commitment to partnering with and investing in U.S. companies, so we also believe that we will continue to expand on our strong manufacturing and systems engineering capabilities in Michigan and Massachusetts."

However, there are others, primarily in Washington, who are very bothered by this Chinese connection, as documented by Crain's Detroit Business.  A link to that article is here.

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Author's note: Automotive manufacturing doesn't begin and end in Detroit anymore. And the industrial sector doesn't begin and end within the U.S. shores either.  I am exploring this international connection, this concentric circle around the globe, as the creation of my next book,  Manufacturing Renaissance, continues.

And you will find other stories on manufacturing at my web site, www.rodkackley.com

The story of Grand Rapids, Mich.'s transformation is available now, Last Chance Mile: The Reinvention of an American Community.

You can also find more information on that at www.rodkackley.com