“The work you’re doing will help power the American economy for years to come.”
— President Obama in a Sept. 13, 2010 phone call to battery maker A123 Systems, congratulating the firm on using the bulk of a $249 million government grant to open new facilities in Michigan.
President Obama travels to Detroit today to talk about the need for increased taxes on top earners to finance federal spending, and is using an announcement of a $100 million investment from German auto giant Daimler to illustrate that his economic prescription is working.
Obama is not likely to discuss another big business story of the day – the sale of the assets of battery maker A123 to a Chinese competitor. A123 spent at least $132 million of its $249 million stimulus package grant to build two Detroit-area factories, including one in Livonia, right next door to Redford Township, where Obama is speaking today.
Assuming a bankruptcy judge and the Obama Treasury Department approve of the sale of A123’s assets to Wanxiang Group, the Chinese battery maker would immediately become the dominant force in the industry.
So for $256.6 million, the Chinese firm would get all that the stimulus package purchased plus the company’s existing operations in Massachusetts and Missouri and have the chance to pare down the company to profitability without the overhead of A123’s debt.
A very good deal to be sure, but not one that American firms were willing to take on. As the president has often said, China and its economic central planners are betting very big on the battery business – for cars, for the electric grid, etc. And with A123, they get to take advantage of not only their own government subsidies, but those provided by American taxpayers.
An additional irony: Whatever share of the original $249 million stimulus grant that the Treasury borrowed from China will still have to be paid back. The boys in Beijing must be having a happy Monday. Obama gave A123 lots of subsidy money to expand to compete with subsidized Chinese firms and the subsidized Chinese firms win anyway…
…If Republicans can’t use the example of Obama pitching spending in Detroit the day after beneficiary of a previous Detroit subsidy fell into the arms of the Chinese to make the case against his spending proposals, they might as well go home for Christmas now.
Read the complete article at FoxNews.com
A Chinese group agreed to buy 80.1 percent of American International Group Inc. (AIG)’s plane-leasing unit for $4.23 billion in the nation’s largest acquisition of a U.S. company.
The International Lease Finance Corp. acquirers, led by New China Trust Co. Chairman Weng Xianding, have an option to buy another 9.9 percent, New York-based AIG said today in a statement. The transaction, which values ILFC at $5.3 billion, passes China Investment Corp.’s $3 billion purchase of a stake in Blackstone Group LP (BX) in 2007 as the biggest Chinese-U.S. deal….