Wednesday, August 8, 2012

First Opposition to Chinese-backed A123 Systems Deal Surfaces ($AONE)

I asked in my previous post whether there's a chance that the DOE grant to AONE will go away now that the company is in the clutches of a Chinese company? The first article attacking the deal on these grounds is already out, from Forbes.

"The recipient of a $249 million 'green technology' grant from our federal government, A123, believing their own (and everyone else’s) hype about the millions of electric vehicles that would soon be filling the nation’s highways (it will happen, but not soon) set about proving an old adage: stupidity and waste increase with the amount of money available. Production capacity was set at a level that was way overly optimistic, and the headquarters complex, with its magnificent office suites and marbled lobbies, was something only a company with tons of money would dream of. [...]

If the U.S. can’t find a way back to self-accountability, to the abnegation of the 'entitlement' philosophy, to hard work, to a focus on exports, an emphasis on value-added production rather than import-driving consumption, the A123 example will be repeated many times. If we can’t get our act together soon, the country will 'go Chinese' company by company, institution by institution, industry after industry.
Much of the value of this company is the future DOE money, and WX cleverly insisted on provisions protecting them in case those grants are cancelled. The risk is all on AONE shareholders.

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