Johnson Controls changes tack in A123 Systems bankruptcy after Wanxiang opposition
Battery maker A123 Systems has had a rough year of battery pack failures that affected customers such as Fisker Automotive. That led to an expensive recall campaign, derailing the company's financial position, and subsequently a bankruptcy filing two weeks ago. On Friday, Fisker Automotive filed a motion seeking to delay the bankruptcy of A123 Systems, and the assets auction. Following that filing, according to the Associated Press, Johnson Controls has agreed to step away from its position as debtor-in-possession of A123 Systems.
In August, A123 Systems agreed to a buyout deal with Chinese autoparts maker Wanxiang. This followed a warning from A123 that it might be unable to continue as a going concern, a warning that became reality when A123 Systems filed for chapter 11 bankruptcy. However that buyout deal led to political backlash over the worry that technology developments that received funding from Federal grants and loans would end up owned by a Chinese-owned business. A123's bankruptcy announcement was accompanied by an announced deal with Johnson Controls where that company, rather than Wanxiang, would be buying A123. But then Wanxiang countered that they were still interested in buying the parts of A123 Systems which Johnson Controls was not buying.