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Wire & Cable ASIA – March/April 2013
Automotive
The Wanxiang America subsidiary of
a large Chinese auto parts maker has
big plans for a Massachusetts battery
company
Wanxiang Group, a manufacturing conglomerate based
in Hangzhou, was highest bidder in an auction for assets
of auto battery maker A123 Systems, which filed for
bankruptcy in October after chronic losses and a damaging
battery recall. The deal would expand Wanxiang’s share
of the global market for lithium-ion batteries used in such
plug-in electric hybrids as the Fisker Karma (base price:
$102,000), an early “green car” whose production in the US
was halted last year by the A123 bankrupcy. According to
A123 (Waltham, Massachusetts), Wanxiang has agreed to
pay $256 million to acquire its automotive and commercial
operations, including three factories in the United States.
Wanxiang would also take control of A123’s fledgling
operations in China, including its interest in a joint battery
venture with Shanghai Automotive, the country’s biggest
carmaker.
Bill Vlasic, the Detroit bureau chief for the New York Times,
noted that the sale excludes A123’s business with the US
government and its military contracts. That portion of the
company is to be sold to Navitas Systems, a small energy
company based in Illinois, for $2.2 million. A123’s chief
executive, David Vieau, told the Times that spinning off
the government-related business to an American buyer
was meant to quell concerns about transferring sensitive
military technology to China. (“Chinese Firm Wins Bid for
Auto Battery Maker,” 9th December). From the start, Mr
Vlasic wrote, some members of Congress had opposed
Wanxiang’s efforts to buy A123, which had received a
$249 million federal grant to spur domestic manufacturing
of batteries and was a centrepiece of the Obama
administration’s $2 billion programme to stimulate the
electric-car industry in the United States. The deal for A123
requires the approval of a US bankruptcy judge; but also of
the Committee on Foreign Investment in the United States,
a broad-based group led by the Treasury Department that
reviews foreign takeovers of American companies.
Mr Vlasic recalled that Wanxiang began its aggressive
pursuit of A123 earlier in the year, when the Chinese
company offered emergency loans to keep the failing
battery maker afloat. Wanxiang outbid three other
companies in the auction conducted for the bankruptcy
court, one of which, Johnson Controls, based in Wisconsin,
had tried to buy A123 as it was entering bankruptcy.
❖ Pin Ni, the president of Wanxiang’s wholly owned
and fast-growing subsidiary Wanxiang America, said
the deal would accelerate its growth in the American
automotive and alternative-fuel industries. The privately
owned company – which moved into its Chicago-area
headquarters in Elgin, Illinois, in 2001 – owns several
auto parts firms and other companies and employs
3,000 American workers.
Mr Ni expressed confidence that Wanxiang was the best
owner for A123, which he said would need considerable
investment to meet production commitments for auto-
makers like Fisker Automotive (Anaheim, California) and
General Motors. He told the Times: “We think adding
A123 to our portfolio of businesses strongly aligns with
our strategy for automotive and clean-tech industries in
the US [and] we are committed to making the long-term
investments necessary for A123 to be successful.”
❖ The A123 news is the latest in a series of
announcements of sales of North American manufac-
turing and energy companies to Chinese firms both
privately held and state-owned. In the previous week,
the Canadian government cleared a $15 billion takeover
of Nexen, the energy giant, by the state-owned China
National Offshore Oil Corporation, or CNOOC.
Telecom
The perceived threat that will not go
away: a United Nations takeover of
the Internet
“In calendar year 2012, the search giant Google has spent
more on Washington DC lobbyists than in any previous
year, and watchdog site OpenSecrets.org lists the company
as a top contributor to 118 Congressional members, on
both sides of the aisle. Judging by the vote, the approach
seems to be working.” Reporting from San Francisco in
the Register, the British-based online tech publication, Neil
McAllister was referring to the unanimous 5th December
vote of the US House of Representatives in favour of a
resolution to keep the Internet “free from government
control.”
The move, clearly aimed at those attending the
United Nations World Conference on International
Telecommunications (WCIT) in Dubai, was an extraordinary
display of legislative bipartisanship: 397 in favour of the
resolution, none opposed. With a new information and
communications treaty on the WCIT agenda, the US
Senate had already passed its own version of the House
resolution, also in a unanimous vote, in September.
(“Entire US Congress Votes Against ITU Control of Internet,”
5th December).
While wryly observing that this mightily united front was
marshalled against “a thing nobody has proposed,”
Mr McAllister took note as well of broader-based concern
that the UN’s International Telecommunications Union (ITU)
might be planning to use the WCIT to stage a power grab
for governance of the Internet. In November, the European
Parliament approved a resolution similar to that of the US
House. For its part in the campaign to forestall the ITU,
Google launched a website seeking supporters of a “free
and open Net.” The site, picturing a schoolgirl seated at her
computer and facing a brick wall topped by barbed wire,
warns that an unchecked ITU could require services like
YouTube, Facebook and Skype to pay new tolls in order to
reach people across borders.
Google’s worry that the ITU could limit access to
information – particularly in emerging markets – might be
entirely sincere.
Statue of Liberty Image from BigStockPhoto.com
Photographer: Marty