A123, one of the most innovative lithium-ion battery makers around, has filed for Chapter 11 bankruptcy, after having its hopes of being bought out by a Chinese concern raised, then dashed.
“Being firstest with the mostest”—a 19th century cavalry officer's succinct definition of strategy—isn’t always enough to ensure success in the biz-tech world, where the initiators of new ideas often do worse than the me-too crowd. Such is the case for A123, of Waltham, Mass., which just sold most of its assets to Johnson controls, of Milwaukee, Wisc., for US $125 million. That sum will come with additional financing to enable A123 to continue operations while the sale goes forward.
IEEE Spectrumfirst wrote about A123’s innovative cathodes back in 2007, when the details of that technology —based on iron phosphate—were still under wraps. We’ve covered the company and its travails ever since.
Our interest has been purely technical, but A123 has now risen to prominence in the political world, thanks to the $129 million in federal loan guarantees it obtained as part of the Obama Administration’s support for green-energy projects. A123 has used about half of that money; whether any will be paid back during the reorganization isn’t clear.
The issue could come up in tonight's televised debate between President Obama and his Republican challenger, Mitt Romney, who has criticized such subsidies as “crony capitalism.”
Everyone sings the praises of A123's batteries. It’s just that no big car company doubled down on them. Its only automotive client was little Fisker, which took longer than expected to bring its electric car to market—and afterwards a lot of those cars were recalled.