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Chinese Firm Buys Massachusetts Tech Company


It's ALL THINGS CONSIDERED from NPR News. I'm Audie Cornish.


And I'm Robert Siegel.

Late today a federal bankruptcy judge gave the nod to a Chinese firm to buy a Massachusetts technology company. A123 Systems makes batteries for electric cars, but some in Congress are fighting to block the deal. Curt Nickisch reports from member station WBUR in Boston.

CURT NICKISCH, BYLINE: Just two years ago, then Michigan Governor Jennifer Granholm cut the ribbon on a state of the art electric car battery factory outside Detroit.


NICKISCH: With technology from Massachusetts brainpower made with Michigan brawn, A123's lithium-ion battery production was heralded as a renaissance of American manufacturing. President Obama phoned in to the ribbon cutting to praise Washington's role paying for the plant with stimulus money.


NICKISCH: Today the bankruptcy court approved A123's sale to a Chinese auto parts company. Wanxiang Corporation bid $257 million for A123 in an auction - more than the nearest U.S. bidder, Johnson Controls of Milwaukee. But Republican Senator Charles Grassley of Iowa says A123 should not go to the highest bidder.

SENATOR CHARLES GRASSLEY: Taxpayers are very concerned about a hundred million dollars of taxpayers' money given to A123 and whether that's going to end up in the pockets of a Chinese company.

NICKISCH: Besides that stimulus money, A123 also got research grants from Uncle Sam to develop its battery technology. Grassley and other Republican senators are now lobbying the Obama administration to nix the sale, but analysts say A123 removed a big stumbling block by agreeing to sell its military contracting business separately to a U.S. company.

SAM JAFFE: It's an economic issue, not a national security issue.

NICKISCH: Sam Jaffe with Pike Research likes the idea of A123 going to a well-funded buyer.

JAFFE: The Chinese company, in this case, is looking for an American manufacturing base to make batteries for an American market, employing American workers.

NICKISCH: The CEO of A123 agrees. David Vieau says the new owner is willing to eat his company's losses until A123 turns a profit, so he's fine with the new owner being from China.

DAVID VIEAU: It's a commercial reality. We shop at Wal-Mart as Americans on an everyday basis and we're going to start challenging the Chinese in terms of them making batteries - I think we're going to have to look at all of the things that we buy.

NICKISCH: The sale of A123 will get a look from federal regulators. The committee on foreign investment in the United States has final say over the deal. For NPR News, I'm Curt Nickisch in Boston. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Curt Nickisch