Today, October 17th, A123 Systems announced it filed for bankruptcy protection and that Johnson Controls Inc. will buy its automotive business assets.
The fact that A123 Systems has filed for bankruptcy is expected to fuel the political debate concerning President’s Obama financing of transportation and alternative-energy businesses. Federal loans and grants offered to companies such as A123, Fisker and Tesla have also been the main point of interest during the October 4th debate, when Republican Mitt Romney called Fisker and Tesla ‘losers.’ The subject drew scrutiny from Republicans after solar-panel maker Solyndra LLC filed for bankruptcy in September 2011, two years after it was offered a $535 million loan from the U.S. Energy Department.
“I mean, I had a friend who said you don’t just pick the winners and losers, you pick the losers, all right? So this — this is not — this is not the kind of policy you want to have if you want to get America energy secure,” said Romney.
Johnson Controls will be the company that will buy A123’s automotive-business assets, worth $125 million, and will also offer financing of $72.5 million to support the company’s operations. On August 31st, A123 Systems listed a debt of $376 million and assets of $459.8 million.