- The Washington Times - Tuesday, January 29, 2013

The federal government approved a deal allowing a U.S. battery maker backed with tens of millions of dollars from the federal stimulus program to be purchased by a Chinese competitor, officials announced Tuesday.

After weeks of speculation, Wanxiang America Corp. announced that it had won permission from the Committee on Foreign Investment in the United States to purchase A123 Systems.

“We’re pleased the government has completed its review and provided us with the go-ahead to finalize this transaction,” Pin Ni, president of Wanxiang America, said in a statement Tuesday.

“The future is bright for A123,” he said. “It is a company with exceptional talent and potential, and Wanxiang America is committed to its long term success and the continuance of its U.S. operations.”

A spokeswoman for the committee declined to comment, noting that by law officials are barred from discussing particular transactions, including whether certain parties have filed notices for the committee to review. The committee is led by the Treasury Department but includes representatives from other agencies across the federal government.

Some Capitol Hill Republicans were quick to point out that they remain troubled by the approval of the A123 sale.

“Technology produced by A123 and funded by U.S. taxpayers should not simply be shipped off to China so that military applications for these materials can be reproduced abroad,” said Sen. John Thune, South Dakota Republican.

Sen. Chuck Grassley, Iowa Republican, said lawmakers don’t have any answers on what will happen to technology funded by U.S. taxpayers or whether U.S. national security concerns are protected.

Rep. Bill Huizenga, Michigan Republican, said taxpayers shouldn’t be funding technology that, in turn, can be used in competition against U.S. companies.

While Republicans were quick to criticize the approved sale Tuesday, the A123 project enjoyed support from both Republicans and Democrats back when the company was seeking government funding.

An Energy Department spokesman said the federal grant to the company was used for the construction of bricks-and-mortar advanced battery manufacturing facilities at two Michigan locations.

“Consistent with the intent of that investment, the purchase of these assets includes the Energy Department’s requirement that the plants and equipment partially paid for by the Recovery Act stay in Michigan and continue to operate, generating job opportunities for American workers and helping to establish a domestic manufacturing base for this growing global market,” Energy Department spokesman Bill Gibbons said Tuesday.

While Wanxiang America, which has more than 3,000 employees in the U.S., is set to buy most of A123’s assets for $256.6 million, another U.S.-based company would purchase its government contracting business, including U.S. military contracts, for $2.25 million.

• Jim McElhatton can be reached at jmcelhatton@washingtontimes.com.

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