A123 to be acquired by Wanxiang Group

[deVries]

This post is totally Off Topic responding to other similar Off Topic posts in this thread.

Farm or countryside workers in the cities are only given some limited rights to work in the cities, but their land ties or land rights do not transfer to the city. Farm or countryside workers are not legally allowed to own or get property in the city to remain there beyond so many working years. Birth control is maintained by "warehousing" these workers onsite in dormitory style bunk bed living arrangements with women living in their own separate areas. The youth in the countryside go to cities to earn more income for a limited time, but eventually they return home to their birthplace not being able to remain in the cities with no rights to remain there and acquire property for permanent residence. Countryside workers only heritage is tied to their place of birth, and they have no freedom of movement to permanently move and remain in the cities. Countryside workers eventually have to return home to their place of birth.

This is what I learned in a recent documentary about China's labor force & economy. Maybe the only way out for a countryside person is to marry someone with rights to live in the city permanently, but the documentary did not get into detail about that.

This seems a sly way to control young poor people to prevent organizing political power long-term, since they will have to return home to the countryside. The cities get a continuous flowing fountain of transient youth and cheap workforce from the countryside that is never educated or allowed to gain a foothold beyond their place of birth.

Until this freedom of movement beyond your birthplace issue is resolved, then I doubt "the system" will change in China. Generations of Chinese have lived under this "rule of birthplace" without property rights for so long that this is going to be very difficult to change...

 

[fivari]

Here in Belgium, the economic newspaper "De Tijd" considers this take over of A123 by a Chinese company as an evidence that the electric car is a big flop. Some media do their best to prove that electric transport is not working. And for cars they could be right. Personally, I think that electric transport is now a reasonable mainstream alternative in case of bikes, scooters, motorbikes. but not for cars.

 

[deVries]

Here in Belgium, the economic newspaper "De Tijd" considers this take over of A123 by a Chinese company as an evidence that the electric car is a big flop. Some media do their best to prove that electric transport is not working. And for cars they could be right. Personally, I think that electric transport is now a reasonable mainstream alternative in case of bikes, scooters, motorbikes. but not for cars.

A123 is not really taken over just yet. This is an investment that might eventually give a controlling interest to the investor, but we don't know the details of the deal or how it will play out over time.

A123 did announce a new temperature tolerant cell that reduces cost by 20%, and it removes the requirement of special cooling/heating hardware to protect the cells reducing weight too. I'd say that is a big advance in technology considering this will be available next year.

As soon as capacity can double for same weight/volume cost we have now, then I believe EV cars will begin competing with gas fueled cars in sales numbers. The growth in sales will be sustainable with a steady rise. I believe that will happen within 7 years & maybe less than 5 years... I hope this is not wishful thinking.

 

[Punx0r]

This horizontal inequality may yet haunt China, but I rather doubt it. Any "revolution" there (and I very very very much doubt anything of the sort will occur)

While you raise some very good points (that revolution is usually born from a sudden worsening in an already shitty situation), there are surely several contrary examples: The English civil war? Both* American civil wars?

China's 19th century history shows a series of uprisings and revolutions, who's to say that things have settled now? If not all-out civil war, it wouldn't be *too* surprising to see mass violent protests like recently in the Middle East.

Jeremy also raises the very good point about the rapidly aging population. That's got to bit them very hard in the behind relatively soon.

 

[neptronix]

China has gone from the most miserable nation on earth to a low-middle income nation - a low income nation with endemic corruption, no civil liberties, and few civil rights. The Chinese government's leadership seems to want to expand on the market friendly reforms which caused the rise in income; let's hope that they follow through.

"So that the record of history is absolutely crystal clear. That there is no alternative way, so far discovered, of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system." - Milton Friedman

I remember hearing that sweatshop workers in China were making 10 - 30 cents an hour. This was back in the 1990's when we really opened up the flood gates to trade with China. Most people ( including myself ) found this to be horrible, but the people of China voluntarily accepted these conditions. It beat working in the rice paddies, and it beat starving as well; so it was offering them an opportunity that they would not have otherwise, and they accepted that opportunity.

Now, we have talk of them making over $1 an hour in these factories. I don't think foxconn, han hai, etc have any shortage of employees. Remember that the cost of living in China are drastically lower than ours.

This is a situation where free enterprise / economic freedom can benefit everyone. You get a cheaper product, and the life of a people elsewhere is improved.

Yes, you have to compete with that. Look at our cost of living, our liabilities, our taxes, our laws. Could we really make batteries here - when there is an intense downward pressure on batteries to be reduced in cost?

Anyone remember reading about how our country was founded? how we sent our kids to work in a coal mine, had our wives painting clock hands with radium, and all that nasty stuff? we've came to expect a lot from a factory job since then. But did Europe stomp in here and tell us that we were working for too cheap, or did they buy all the stuff we made, which ultimately helped make us a wealthy country?

So let China make these batteries and own the company if they can do a better job. Better than have A123 be a welfare queen that can't figure out how to sell their own products. Maybe we'll actually be able to buy new cells with this deal.

 

[Punx0r]

Anyone remember reading about how our country was founded? how we sent our kids to work in a coal mine, had our wives painting clock hands with radium, and all that nasty stuff? we've came to expect a lot from a factory job since then. But did Europe stomp in here and tell us that we were working for too cheap, or did they buy all the stuff we made, which ultimately helped make us a wealthy country?

By global standards of the time, those folk probably didn't have it *that* bad :lol:

That's not to take anything from your point - just pedantry

 

[neptronix]

We did use slaves to do a lot of the dirtier work, BUT.. we definitely suffered of Chinese factory conditions for a very long time. Look into our mining and early industrial factory history. Gnarly stuff that we could not imagine doing today.

 

[Phoebus]

Nep,

Why do you suppose it it that so many complain about Chinese iPhone factory conditions, but I never hear any complaints about Chinese coal mine conditions?

 

[neptronix]

Nep,

Why do you suppose it it that so many complain about Chinese iPhone factory conditions, but I never hear any complaints about Chinese coal mine conditions?

That's a fine question. I was watching a documentary on coal mining out here in the west. Definitely a risky job. You also are basically guaranteed to get black lung disease after a few decades of doing that kind of work.

But they don't really complain about it, those guys just hang their lives on the line and do it.

That's a low amount of incidences per month considering the amount of mining and population of China ( 3-4x of our population! ). Maybe we could learn something for them, that is, if they're not covering things up.

 

[Phoebus]

Nearly 2,000 deaths in 2011 - though their trends are promising!

http://www.usmra.com/china/coal_deaths.htm

 

[t3sla]

sif you wouldn't pull corporate sabotage on a production run to low ball bailout a company

 

[etriker]

All eyes on Syria ? China is not making a lot of friends in the middle east. Is Syria China's testing ground ?

China is not making friends in the US either. I get to hear people complain about their made in China toys a lot.

Then you hear kids are making the stuff ? http://www.bbc.co.uk/news/technology-19185771

Did you know some of the new tvs are hooked to the net and have built in cameras and mics ?

They were showing one off at the electronics show but Samsung could not get it to work.

Unfortunately those huge disparities in income often lead to revolution. I expect that the Chinese military is paid well by their standards, and therefore is less likely to openly revolt. China does have a relatively recent history of revolution. Remember Mao? I hope this does not happen but there are warning signs.
otherDoc

I can't begin to imagine how those tensions must be affecting population of China, or how the Chinese government is trying to deal with them. Talking to some friends who originally came from rural China, they say that the impact of young people moving away from the rural areas to work in the big manufacturing cities has been devastating, and is now impacting on the effectiveness of farming. Population control had already skewed their demographic, leading to a higher proportion of older people, and now it seems that there is a very real risk that there won't be enough younger people to take over the running of farms in rural areas, as many will have moved away.

For now the government still has some control over the media, and can limit how much information gets out to rural communities, but for how long? Many of the young people who have moved away to earn better pay are sending money and consumer goods back home, so it's only a matter of time before the poor realised the enormous disparity between rich and poor and start something akin to another revolution. Our problem is that we probably won't be able to tell if, or when this might happen, given the limited insight we have into the inner workings of the Chinese government.

 

[flathill]

Remember Wanxiang (a front for the PLA) formed a 60/40 joint venture with Ener1 right before they let ener1 go bankrupt

Also know any joint venture with a chinese company must be 51% chinese owned stipulates full IP access

ener1 subsidiary nanoener was working on next gen magnesium batteries funded by ANL

America fcuk yeah

 

[deVries]

Also know any joint venture with a chinese company must be 51% chinese owned stipulates full IP access

It's true and crazy, imo, that Boeing trades its blueprints for cheap labor & limited access to Chinese markets.

“The last capitalist we hang shall be the one who sold us the rope.”
― Karl Marx

 

[flathill]

China has almost all of boeings,lockheeds,GDs,rays,etc
blueprints since they hacked RSA
stole the SecurID source code
for over 2 years they could access any securid protected intranet
before they were caught

 

[spinningmagnets]

Some of the numbers were recently posted:

http://online.wsj.com/article/SB10000872396390443991704577576881949308486.html

...Wanxiang Group Corp, one of China's biggest [auto] parts makers, offered a $450 million lifeline to A123 Systems Inc...

...A123 was [previously] awarded $249 million in Department of Energy grants and has used about half so far to pay for some of the costs of building a factory in Livonia, Mich...

...It recently announced a [patented] advance in battery chemistry that would make its cells work in extreme hot or cold without the costly heating and cooling gear that now adds to the price of electric vehicles...

...The company got its start with battery technology licensed from the Massachusetts Institute of Technology...A123 recently warned it could run out of money due to slower-than-expected sales of electric vehicles...

...For the quarter ended June 30, A123 reported a loss of $82.9 million...compared with a year-earlier loss of $55.4 million...

 

[cell_man]

Wages are low in China by Western Standards, but I can tell you from my experience that currently they are not anywhere as low as most people seem to think. I would say that in Shanghai or Shenzhen, it would be difficult to hire someone that has any sort of skill for a factory job for less than about 400USD a month, possibly a little less for a few months until they had some skills and moved on. Many still fairly low level workers without much education, just some experience can earn significantly much more than that. Maybe you can hire staff cheaper in smaller cities, but I still think the figures some are quoting are a bit out of date. In lots of places many companies have trouble to find good workers and keeping them. Bigger companies move move China inland and West to find the cheaper costs, it's not so cheap in the more developed regions. Wages have increased significantly as have living costs in the last few years and they look to be increasing some more yet. China is not a fair country by any means, but I don't think it is quite as bad as it painted by some in the western media. The average person still has it pretty tough, but for most, I'd say things have improved.

I don't think China is great, but at the same time I wouldn't believe everything you see on the TV as there is a bit of an agenda IMO.

 

[etriker]

Wages are low in China by Western Standards, but I can tell you from my experience that currently they are not anywhere as low as most people seem to think. I would say that in Shanghai or Shenzhen, it would be difficult to hire someone that has any sort of skill for a factory job for less than about 400USD a month, possibly a little less for a few months until they had some skills and moved on. Many still fairly low level workers without much education, just some experience can earn significantly much more than that. Maybe you can hire staff cheaper in smaller cities, but I still think the figures some are quoting are a bit out of date. In lots of places many companies have trouble to find good workers and keeping them. Bigger companies move move China inland and West to find the cheaper costs, it's not so cheap in the more developed regions. Wages have increased significantly as have living costs in the last few years and they look to be increasing some more yet. China is not a fair country by any means, but I don't think it is quite as bad as it painted by some in the western media. The average person still has it pretty tough, but for most, I'd say things have improved.

I don't think China is great, but at the same time I wouldn't believe everything you see on the TV as there is a bit of an agenda IMO.

This is the kind of stuff they tell us in the USA.

http://www.nytimes.com/2012/09/25/technology/foxconn-plant-in-china-closed-after-worker-riot.html

What do you think their agenda is ?

 

[Phoebus]

PPP adjusted, normal wage in china is around $8,500 / year, $700 / month.

Mexico comes in around $15,000 / year for reference, and India $3,600 / year.

 

[Hillhater]

A123 Systems Inc., a struggling, U.S. government-backed manufacturer of advanced batteries for electric vehicles, is turning to one of China's largest auto parts makers for a bailout.

The Waltham, Mass.-based company said on Wednesday that Wanxiang Group Corp., a Chinese conglomerate, agreed to acquire up to an 80% stake in return for an up to $450 million investment.

http://online.wsj.com/article/SB10000872396390443991704577576881949308486.html

A123 Systems to sell substantially all assets to Wanxiang for $256.6M
http://www.greencarcongress.com/2012/12/a123-20121209.html#more

Wanxiang outbid a joint Johnson Controls and NEC offer and a bid from Siemens in an auction held on 6 December for the assets of the bankrupt Li-ion battery maker.
......................
According to the terms of the asset purchase agreement, Wanxiang would acquire A123’s automotive, grid and commercial business assets, including all technology, products, customer contracts and US facilities in Michigan, Massachusetts and Missouri; its cathode powder manufacturing operations in China; and its equity interest in Shanghai Advanced Traction Battery Systems Co., A123’s joint venture with Shanghai Automotive.
.......................
Based in Chicago, Wanxiang America has been in the automotive and industrial markets in the US since 1994 and currently has more than 3,000 employees in the US. It is a subsidiary of Wanxiang Group, China’s largest automotive components manufacturer and one of China’s largest non-state-owned companies. A123 is Wanxiang’s fifth clean energy investment in the US in 2012.
.....
"We plan to build on the engineering and manufacturing capabilities that A123 has established in the US and we are committed to making the long-term investments necessary for A123 to be successful".
—Pin Ni, president of Wanxiang America

 

[bigmoose]

This is all a lesson in outsourcing ...

Little story: Brother In Law was engineering with a manufacturer the used motors, four to six trips a year to the Chinese motor plant(s). Each Christmas he would share pictures of the years journey. First was "their" motor line in the building. Then a wall down the middle, and the "competitors" motor line next to it, across the wall. Then the big jump. He talked of having design telecons the week before his trip about a concept product. When he got off the plane, the motor people presented him with the entire product prototype!

He said, "This doesn't look good for my job, the Chinese are starting to do the product engineering. Two years after that the Chinese company bought his American company... two more years and he was laid off, along with all US based engineering. All that remains here is distribution and sales.

Now, anyone know why DeWalt stopped using A123 M1 cells?

 

[Jeremy Harris]

This is all a lesson in outsourcing ...

Little story: Brother In Law was engineering with a manufacturer the used motors, four to six trips a year to the Chinese motor plant(s). Each Christmas he would share pictures of the years journey. First was "their" motor line in the building. Then a wall down the middle, and the "competitors" motor line next to it, across the wall. Then the big jump. He talked of having design telecons the week before his trip about a concept product. When he got off the plane, the motor people presented him with the entire product prototype!

He said, "This doesn't look good for my job, the Chinese are starting to do the product engineering. Two years after that the Chinese company bought his American company... two more years and he was laid off, along with all US based engineering. All that remains here is distribution and sales.

Now, anyone know why DeWalt stopped using A123 M1 cells?

Pretty much exactly what happened here around 40 years ago with the Japanese and our motorcycle industry. They started off by making close copies of a British motorcycle and within a few years had refined out all of the quirks and were producing bikes that were ten times batter in just about every respect (except, perhaps, the rather nasty MIG welded frames). Within ten years the Japanese had gone from having virtually no motorcycle industry to being world dominant. They followed on a few years later by doing darn near the same thing with the motor car industry. I strongly suspect the pattern is repeating with China.

 

[davec]

the Chinese offered 400 mil originally and scooped it up for a bargain - and tax dollars gone to waste
The question that remains is will this be any benefit to the US or will they get rid of north American jobs and run it as a Chinese operation and exploit it-
it's no secret that the Chinese with their trillion dollar reserve are buying everyone out these days- and our sell out politicians just let it happen- soon they will run the show

 

[bigmoose]

Here is an interesting GDP compilation by the world bank. Let's you see who is in the dog pack and who is rising/falling. I sorted it by GDP:

http://data.worldbank.org/indicator...pi_data_value+wbapi_data_value-last&sort=desc

 

[Jeremy Harris]

Here is an interesting GDP compilation by the world bank. Let's you see who is in the dog pack and who is rising/falling. I sorted it by GDP:

http://data.worldbank.org/indicator...pi_data_value+wbapi_data_value-last&sort=desc

As well as China we need to watch Brazil! Look at their growth rate, pretty remarkable given the state of the general world economy over the past few years.