Two Republican senators questioned the Energy Department’s decision to offer A123 stimulus funding.
U.S. Sens. John Thune, R-S.D., and Chuck Grassley, R-Iowa questioned whether the
Energy Department should offer the struggling battery producer a $120 million stimulus funding, taking into consideration that it might be acquired by a Chinese company.
“Billions of U.S. taxpayer dollars have flowed to foreign companies through the Recovery Act, and we are concerned that the recent announcement could lead to even more taxpayer dollars going overseas,” they wrote.
A123 announced last week that it has reached an agreement with a Chinese auto parts company for a $450 million investment that could save the company. If the agreement is approved the Chinese firm will acquire 80% stake in A123. The battery producer has already received loans of millions of dollars from the US government, who plans to add other $120 million. But now with the $450 million investment from the Chinese company, officials wonder whether the US government should continue to help the company.
Until now A123 has received about $500 million in grants, including a $249 million Energy Department grant and $238 million from Michigan, plus a 2-year extension to spent what is left from the $249 million grant.