Michigan battery maker files for bankruptcy

10:02 AM, Oct 16, 2012   |    comments
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(DETROIT FREE PRESS) - A123 Systems, a lithium-ion battery maker with more than 700 employs in Livonia, Romulus and Ann Arbor and recipient of a $249 million grant from the U.S. government, filed for bankruptcy protection this morning in Delaware.

At the same time Johnson Controls, a major global auto supplier, battery maker and climate control systems, plans to acquire A123's automotive-related assets for $125 million. This includes plants in Livonia and Romulus, a cathode powder factory in China and A123's stake in Shanghai Advanced Traction Battery Systems, a joint venture with Shanghai Automotive.

Johnson Controls offer was conditional on today's bankruptcy filing.

The advanced car battery industry has been hurt by overcapacity and Americans reluctance to buy more plug-in hybrid electric vehicles.

A123 had promised to create 38,000 U.S. jobs, including 5,900 at its own plants, in return for the government funding under the 2009 American Recovery and Reinvestment Act.

The company received a $465 million lifeline from Chinese auto-parts maker Wanxiang Group Corp earlier this year.

A123 had said on Monday that it could default on some debt agreements and that it was considering strategic alternatives.

A123 listed total assets of $459.8 million and liabilities of $376 million in its Chapter 11 petition.

A123 shares, which closed Monday at 24 cents fell 75% to 6 cents in early trading this morning.

 

Detroit Free Press

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