Filed under:
Hybrid,
Government/Legal,
Hirings/Firings/Layoffs,
Technology,
BMW,
Earnings/Financials,
Fisker,
Electric
After a long and bumpy road, battery-producer
A123 Systems has officially filed for bankruptcy. This news comes immediately after word that the Waltham, Massachusetts-based company
may not have enough cash to fund operations, or even seek bankruptcy protection. This news has ramifications elsewhere in the industry, as A123 had contracts with
Fisker Automotive as well as with
BMW.
In a press release issued this morning, A123 announced that it will sell off all automotive assets to Johnson Controls. A123 will file Chapter 11, while
Johnson Controls will provide $72.5 million in debtor-in-possession financing. The aim of the financing is to support A123 while it attempts to pursue alternative business operations.
To anyone following the battery maker closely, this news should not come as a shock. It was estimated that A123 lost about $67 million dealing with a
battery recall for the
Fisker Karma. In May of this year, the company posted a
$125 million net loss. Shares for A123 have fallen 85 percent this year as the company has posted 14 straight quarterly losses.
With news of the bankruptcy, it wouldn't be surprising if A123 were be brought up in tonight's presidential debate. A123 received $249 million in federal grant money in 2009. The company also received $100,000 in 2006 under the Bush Administration, and additional tax exemptions and credits during Mitt Romney's time as a Massachusetts governor, so this issue has many sides.
For Fisker, the issue at hand is finding a new battery supplier. Johnson Controls has had
previous hybrid ventures and continues to explore lithium-ion batteries. This could be an opportunity for the Milwaukee-based company to expand that part of its business, perhaps replacing A123 as Fisker's battery supplier.
Continue reading Battery maker A123 systems defaults on loan, files for bankruptcy
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Report: Battery maker A123 systems defaults on loan, files for bankruptcy
