A123 Systems, a lithium-ion battery maker and the recipient of a $249 million grant from the U.S. government, filed for bankruptcy protection Tuesday in Delaware.
Johnson Controls, a major global auto supplier and battery maker, plans to acquire A123's automotive-related assets for $125 million. This includes plants in Michigan, a cathode powder factory in China, and A123's stake in Shanghai Advanced Traction Battery Systems, a joint venture with Shanghai Automotive.
Johnson Controls' offer was conditional on Tuesday's bankruptcy filing.
The advanced car battery industry has been hurt by overcapacity and Americans' reluctance to buy more plug-in hybrid electric vehicles.
A123 had promised to create 38,000 U.S. jobs, including 5,900 at its own plants, in return for the government funding under the 2009 American Recovery and Reinvestment Act.
The company received a $465 million lifeline from Chinese auto-parts maker Wanxiang Group Corp. earlier this year.
A123 had said on Monday that it could default on some debt agreements and that it was considering strategic alternatives.
A123 listed total assets of $459.8 million and liabilities of $376 million in its Chapter 11 petition.
(c)2012 Detroit Free Press
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