A123 Systems lays off 125 workers at Michigan battery plants

[TylerDurden]

A123 Systems lays off 125 workers at Michigan battery plants

Karen Smith
Staff Writer
OBSERVER & ECCENTRIC

A123 Systems expects its layoff of 125 employees from its Livonia and Romulus facilities to be temporary, public relations manager Dan Borgasano said Friday.

“We expect to be calling these people back in six months or less,” he said. Approximately 700 workers remain employed following the layoffs just prior to Thanksgiving.

The layoffs resulted from an unexpected reduction in orders from Fisker Automotive in California, one of its largest customers, Borgasano said. A123 Systems manufactures advanced Nanophosphate lithium ion batteries and energy storage systems for the transportation, electric grid and commercial markets.

“It’s certainly unfortunate, but we are a supplier subject to situations like this just like any supplier,” Borgasano said. “The part we really want to stress is we expect it to be temporary, hopefully a blip we all get past.”

The Livonia plant opened in September 2010, heralded by Democratic congressional leaders and then-Gov. Jennifer Granholm as the birth of a new era in advanced manufacturing. It is the largest lithium ion automotive battery production facility in North America.

Half of the Livonia plant’s first 300 workers hired in September 2010 had been laid off from their previous jobs.

A123 was awarded a $249 million grant from the U.S. Department of Energy as part of the American Recovery and Reinvestment Act to help the company execute its strategy to ramp up U.S. manufacturing capabilities.

In addition to the DOE grant, the company received $125 million in state incentives from Michigan as part of its 21st Century Jobs Fund to help finance these manufacturing facilities.

It also received a 50-percent reduction in taxes to the city of Livonia for 12 years.
Livonia Mayor Jack Kirksey said the layoffs are the result of “a little bit of a glitch in supply and demand.

“So far they are a huge success story,” he said.

A123 had promised to create 500 jobs in three years in Livonia, he said, and wound up hiring about 800. “They’ve exceeded that pledge,” he said.
To continue receiving tax credits, companies are monitored, he said. “This is just a bit of a blip. I think they are going to be consistent.”

Borgasano said Fisker needed to rebalance its inventory for all suppliers. “We expect them to be back up and ordering second quarter of next year,” he said.
He said the layoffs are part of growing pains. A123 Systems has 21 vehicle programs — battery cells, modules and full battery packs — in production or going into production, including the battery packs that will power the Spark EV, the all-electric version of the Chevrolet Spark mini-car.

“We do intend to be there in Michigan for years to come and we expect to grow,” Borgasano said.

Borgasano couldn’t say how many of the layoffs were in Livonia and how many were in Romulus because employees went back and forth between the two facilities.

Production starts with the first couple of steps at the Romulus facility and is finished in Livonia, where the batteries are actually made. The research and development offices are located in Ann Arbor.

The remaining 700 workers are employed at the three Michigan facilities.

http://www.hometownlife.com/article/201 ... |Livonia|p

[bane77087]

Dillholes... I mean really if they would just sell those damm 20AH pouches to the public they would be having to hire ppl, not be laying them off. They would rather lay people off than to sell to the public that wants to buy.

[Ricky_nz]

Dillholes... I mean really if they would just sell those damm 20AH pouches to the public they would be having to hire ppl, not be laying them off. They would rather lay people off than to sell to the public that wants to buy.

I doubt selling to individuals would reach the required quantities to keep that many people employed.
On the plus side if they sold to individuals they would probably have to hire a huge number of lawyers .

I do however wish that we could buy the cells.

[liveforphysics]

So, the fiskar Karma claims to have 3000 orders total. 22kwhr packs. ~340 cells per car. That's 1million cells needed.

I visited multiple factories in Korea who make more than that every week, and have less than 125 production employees to run the entire place.

Also, it says fiskar is a main customer??? A company that has so far made under 40cars?

I can't believe they got 250million dollars of tax payer money to setup some factory that requires a zillion people for some reason to make such a small amount of cells.

That 250mil could have just bought about a billion watt-hours of LG chem cells, and the cars would be lighter, safer, go further, and a123 could slap a few cent per Watt hour markup on them, and might just might have its first chance at making money.

[neptronix]

Whatever you do, don't sell to the hobbyist market. That might mean that you have to employ people.

[flathill]

A123 only want to suck off the gov tit and they don't give a shit about u or me. They do have 100MW of grid storage installed which is another waste of money but maybe not. It seems the gov is realizing the free market is bs and if you want to compete with Asia you have to have collusion

[nicobie]

. It seems the gov is realizing the free market is bs and if you want to compete with Asia you have to have collusion

Sad but true

[liveforphysics]

. It seems the gov is realizing the free market is bs and if you want to compete with Asia you have to have collusion

Sad but true

You simply need less government interference to compete with Asia.

The US is massively absurdly subsidized in its industry. From food to energy, its the tax payers here that carry a burden to ensure the best working option doesn't happen only what gets subsided happens.

Asia has steel subsidies. We piss and moan about that somehow making an unfair advantage. Seems like a hell of a lot smarter option than our subsidies of corn to the point it sells for below the cost of production, and absurd oil enscentives to ensure alternative energies stay in too low of economies of scale to be naturally competitive.

[Hillhater]

Didn't A123 land a contract to supply cells for the GM Spark, mini EV. /
but i guess the income stream from that deal is a year or two off...

‘A123 VP Jason Forcier said in an interview with Forbes that the contract is a “major win” for the company. A123 will be providing the full battery system for the Spark, including not just the battery but also associated enclosures, electronics and cooling. The Spark goes into production in 2013; Forcier says the deal should be providing substantial revenue to A123 by 2014. He notes that the company will start producing the batteries for the Spark in its existing facility in Livonia, Michigan, which it also produces batteries for Fisker and Navistar vehicles, but will consider adding more capacity at a second site A123 owns five miles down the road in Romulus, Michigan’.

[wineboyrider]

. It seems the gov is realizing the free market is bs and if you want to compete with Asia you have to have collusion

Sad but true

You simply need less government interference to compete with Asia.

The US is massively absurdly subsidized in its industry. From food to energy, its the tax payers here that carry a burden to ensure the best working option doesn't happen only what gets subsided happens.

Asia has steel subsidies. We piss and moan about that somehow making an unfair advantage. Seems like a hell of a lot smarter option than our subsidies of corn to the point it sells for below the cost of production, and absurd oil enscentives to ensure alternative energies stay in too low of economies of scale to be naturally competitive.

Luke you are right on this economic topic and you are at least almost always right about the electric stuff you talk about all the time on this forum. Like I would know the difference anyways? LOL.

[Jason27]

There will never be free trade until china stops manipulating its currency and countries like south Korea, japan, and Germany are forced to stop its protectionist policies.

Right now the word free trade means cheap labor.

[nechaus]

US and and corn production .. its unfucking believable..

I like america, but i dont like how they feed their people and animals shit..

MacDonalds should be blown into another galaxy

the cattle farmers, farming on DIRT and not grass.. so the animals are forced to eat their corn for breakfast lunch and dinner
I hate what they do to chickens to

its not only the US, Aus is becoming worse.

[liveforphysics]

There will never be free trade until china stops manipulating its currency...

Ahh yes, we hear this so often, some of us start to believe it.

http://www.google.com/finance?source=an ... CCMQ5QYwAA


How about a little reality check. The USD has been devalued roughly 30% faster than the RMB.

Our dollar continues to buy less chinese stuff, (or any countrys stuff) on a daily basis. We are the ones screwing ourselves.

[biohazardman]

So true it is. If we did not buy/consume the imported stuff in the first place our country would not be where it is. Yes, the government made it possible, for you pick the reason, but we, the American people, made it happen and continue to do so.

[momo]

Maybe this government is forcefully limiting A123's production. Look at the FDA and DR. Burzynski who created a cure for cancer, http://naturalnews.tv/v.asp?v=F5B32D25B ... 9A1DF9CC0D and yes Food, inc
excellent documentary everyone should watch, available on netflix.

[Jason27]

A123 is also getting ripped off by cheap Chinese knockoffs on eBay and Ali baba.

The Obama admin refuses to label china a currency manipulator. I wonder why?

[liveforphysics]

The Obama admin refuses to label china a currency manipulator. I wonder why?

Did you miss the reality check on that?

It's clear as a bell. The USA has devalued it's currency MORE than China, AKA, China is making less incentive to buy from them VS what our own country has done to weaken the USD's buying power.

http://www.google.com/finance?source=an ... CCMQ5QYwAA

[Gordo]

http://www.google.com/finance?source=an ... CCMQ5QYwAA

Gee Luke, when are you going to quit confusing Jason with facts

[Jason27]

Luke I don't agree with you.

Why then did the united states senate pass a bipartisan anti currency manipulation bill?

[VoKuS]

Dillholes... I mean really if they would just sell those damm 20AH pouches to the public they would be having to hire ppl, not be laying them off. They would rather lay people off than to sell to the public that wants to buy.

I doubt selling to individuals would reach the required quantities to keep that many people employed.
On the plus side if they sold to individuals they would probably have to hire a huge number of lawyers .

I do however wish that we could buy the cells.

This is so wrong and backwards.. "On the plus side if they sold to individuals they would probably have to hire a huge number of lawyers"...

I hate people like that, they screwup and sue the company...

[miro13car]

they would not offer their cells to the public and now they lay off workers?

[Kin]

The devaluation of the U.S dollar is related to the "monetary easing." So, yeah, in that sense we manipulate currency by printing more currency. But it also has to do with the fact that markets are less crazed. It was overvalued as was (?still is? I dont pay attention) gold because people relatively trust gold.

I guess a direct comparison is funky is all that I'm saying. China's currency is manipulated in so far as exports:imports are kept high, and they limit outside currency transfers (e.g, me buying 50 million yuan/) For what its worth, they did recently let to go up in part to combat inflation and/or bolster. It's just a number of variables, I'm saying. People argue that U.S is more hands-off, just primarily affecting interest rates, while complaining china's method is very hands-on. Economics are absurd :p, though.

More on topic:
I'm really surprised that a plant in Korea with 125 workers could actually produce 1 million cells a week. Lets say there are 10 human steps involved in the process... That's 10 million steps. 10 million / 125 / 7 /10hr = 1143 steps/hr. If each step takes only half a second, thats still too slow. I'm not trying to question LFPs numbers, I'm just trying to grasp how incredibly automated everything must be. I am shocked it doesnt take 125 people simply to maintain the machines that I would imagine are involved in making 1 million cells /weak.