The spoils of a bankrupt company funded with a $249 million grant from President Barack Obama’s stimulus package for alternative energy will go to a Chinese business if the federal government approves the deal.
The Wanxiang Corporation successfully bid last week for the assets of the failed A123 Systems, prompting warnings from both sides of the political aisle that the sale poses a risk to national security.
Lawmakers say that A123’s core intellectual property is used in several contracts worth millions of dollars with the Defense Department to build unmanned aerial and underwater vehicles, power grids, unmanned ground and portable power systems, high-energy lasers and advanced armor.
“That gives us pause and it does concern us,” said Rep. Marsha Blackburn (R-Tenn.), incoming vice chairman of the House Energy and Commerce Committee. “I just think that this is something we don’t want in China’s hands.”
Wanxiang’s purchase price of $256 million does not include the research and development contracts with the military or the sensitive technology that A123 manufactured—lithium-ion batteries for military vehicles and renewable energy. That end of the business has already been sold to Massachusetts-based Navitas Systems for $2.25 million.
But Blackburn says that only a bookkeeping process separated the commercial and government contracting side of the business. “The core technology was used in all of their applications,” Blackburn said.