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January 9 2013

EXPERT ADVICE: Don’t Sell A123 to China

Emily Wismer

 

A123, the company that received $1 million in taxpayer money the day it filed for bankruptcy, was recently auctioned to Wanxiang, a Chinese company. The deal must be approved by the administration, and one expert believes the deal should be blocked.

Today, Barry Costello, a member of the Strategic Materials Advisory Council, argues in Politico that A123’s Nanophosphate technology is critical to military opperations:

Throughout history, the U.S. military has been subject to both scorching heat and bitter cold. Our armed forces also are burdened with ever-growing amounts of equipment, with average loads exceeding 130 pounds, including 20 pounds of batteries. The Defense Department has heavily invested in advanced battery technology to support our soldiers regardless of the ground conditions and lighten their loads.

Researchers began tackling this problem more than a decade ago. Founded in 2001, A123 System’s proprietary Nanophosphate technology is built on novel nanoscale materials initially developed at the Massachusetts Institute of Technology... In 2009, the Department of Energy had such faith in this technology that it approved nearly $250 million in taxpayer-funded stimulus grants to foster its commercialization. Now the U.S. military, critical utility and telecommunications grids use it today.

A domestic company purchased them so A123’s defense contracts in order to ease the approval of Wanxiang’s purchase. But Costello believes this is not enough:

What they didn’t resolve is that the core technology will still belong to Wanxiang and is potentially available to the Chinese military. Furthermore, that American company will still have to rely on Wanxiang’s manufacturing assets and willingness to share future intellectual property. In other words, the sensitive technology today will be exported, and our future military supply — and troops — will be dependent upon a Chinese entity….

Moreover, because of the government’s grant to A123 in 2009, U.S. taxpayers essentially funded the development of these assets. It is contrary to the spirit of our country to use taxpayer dollars to pay for the transfer of technology overseas and further disadvantage American firms.

A decision on the A123’s purchase is expected later this month. The full opinion piece may be found here.

 

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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