We heard news not long ago that Detroit-based VL Automotive, in which ex-GM executive Bob Lutz is involved, is planning on selling V8-powered Fisker-bodied vehicles.

According to news agency Reuters, VL Automotive is partnering with China’s Wanxiang Group with the goal of acquiring the post-bankruptcy assets of Fisker.

If this story seems familiar, keep in mind that Wanxiang is the Chinese company that acquired the automotive division of then also bankrupt battery maker A123 Systems.

Interestingly, A123 Systems was the battery provider to Fisker.

It is then not surprising to see VL Automotive and Wanxiang team up for the assets of Fisker considering VL Automotive needs Fisker bodies for its Destinio (pictured) to see the light and that Wanxiang needs Fisker to be alive to provide batteries to the Karma.

Reuters said in its article that “this comes alongside a separate push by investors in Europe and Hong Kong, including billionaire Richard Li, to buy out the U.S. Department of Energy’s position in Fisker.”

Fisker’s Karma were assembled by long-time automotive supplier Valmet.

Fisker has not commissioned Valmet to build a single Karma plug-in hybrid since July 2012 and has seen its founder, automotive designer Henrik Fisker, leave the company abruptly mid-March.

On April 5, 2013, Fisker Automotive laid off160 of its employees; word has it a mere 53 employees remain out of the Anaheim-based company that once boasted over 400.

As is often the case in these situations, no one involved would comment, confirm or deny the information. One thing is sure: negotiations are underway for Fisker’s assets and everyone could be surprised by the outcome.

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Wanxiang America Corporation has received approval from the Committee on Foreign Investment in the United States (CFIUS) to complete its acquisition of substantially all of the non-government business assets of A123 Systems, Inc.

“We’re pleased the government has completed its review and provided us with the go-ahead to finalize this transaction,” said Pin Ni, president of Wanxiang America. “The future is bright for A123. It is a company with exceptional talent and potential, and Wanxiang America is committed to its long-term success and the continuance of its U.S. operations. Wanxiang America looks forward to closing the transaction and to continuing to foster the technologies A123 has worked so hard to develop.”

The Strategic Materials Advisory Council responded without delay today to the CFIUS ruling.

The Council mentioned in a press release the fact A123 Systems owns 91 patents for sensitive military and space battery technology.

“This disappointing decision represents a 180-degree reversal by the Obama administration in just 8 days, from the President’s Inaugural pledge to no longer ‘cede to other nations’ critical energy technology,” Council Co-chair and former Army Acquisition Executive, Dean Popps said. “Far from protecting America’s lead, as the President promised on the West Front of the Capitol, his administration has just allowed China to leapfrog the world in advanced batteries at the expense of American taxpayers.”

The Council opposed the sale of A123 to Wanxiang citing the massive national security risk the deal carries.

“The Chinese will now have direct access to a US-funded and developed technology that powers our military satellites and military drones and supports our soldiers in the field” said the Council in today’s press release.

Popps added, “The approved sale marks yet another step in the coordinated strategy by foreign countries to acquire leading US companies who are researching, developing and producing critical technologies. CFIUS itself has recognized this strategy but it appears they continue to fail to do anything to prevent it.”

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According to Reuters, one of the Chinese firms is Wanxiang Group, the company that in December won an auction for bankrupt U.S. lithium-ion battery maker A123 Systems, Fisker’s primary battery supplier.

Fisker spokesman Roger Ormisher told Reuters only that the company is “in advanced talks with a number of potential strategic partners,” with possible developments announced in the next few months. Ormisher abstained from further comment on the matter.

Attempts to seek European funding late last year by Fisker CEO, Tony Posawatz, proved fruitless says Reuters, and so the next step was China. The Chinese government is setting about putting half a million electric vehicles in operation in the next few years, and Chinese automakers are aggressively seeking alternative fuel technologies in an effort to help meet this stated goal.

As for the build stoppage of the Karma, Ormisher told AutoblogGreen that this was the result of Fisker management wanting a new contract with workers at the Valmet plant in Finland – where the Karma is assembled – the timing of which coincided with the bankruptcy of A123 Systems.

“We took the prudent decision to conserve our battery stock, and we already have sufficient supply of Karmas through Q1 of this year,” Ormisher told AutoblogGreen. “By that time we hope to have renegotiated our battery supply with A123′s new owners Wanxiang.”

Reuters, AutoblogGreen

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The Strategic Materials Advisory Council (SMAC) unveiled on Jan. 3 a myths/facts paper on the issue.

The SMAC as well as dozen of Republican and Democratic members of Congress say they are “deeply concerned by the economic and national security implications of the sale to Wanxiang and urge the Committee on Foreign Investment in the United States (CFIUS) to carefully scrutinize the deal.”

As a reminder, on Dec. 11, 2012, Chinese auto parts manufacturer Wanxiang Group Corporation received court approval to acquire a majority of U.S. battery manufacturer A123 Systems.

Navitas Systems, LLC was approved to purchase the defense portion of the company. However, the sale is subject to review by the CFIUS.

Said review is expected to be completed by the end of this month.

The SMAC asserts that A123 Systems’ lithium-ion phosphate technology is far more advanced than other known alternatives and cannot be separated by application or business sector.

In SMAC’s words, “allowing the sale of A123 to Wanxiang poses an imminent national security risk due to the implications of a future U.S. dependence on China for access to U.S.-developed battery technology.”

Comprised of a group of former U.S. government senior officials and industry leading experts, the SMAC was formed with the clear objective of responding to threats to the U.S. industrial base and the critical materials supply chain.

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On Dec. 17, Johnson Controls filed an appeal in bankruptcy court of the Dec. 11, 2012 sale order approving Wanxiang’s purchase of A123 Systems.

As part of the sale order, the court ordered the escrow of the break-up fee and expense reimbursement due to the company under its stalking horse agreement with A123.

Johnson Controls is appealing the sale order to obtain the breakup fee and expense reimbursement to which it is entitled under that agreement and which were previously approved by the bankruptcy court.

“We appreciated the opportunity to serve as stalking horse, which resulted in significant value to the estate, creditors and employees,” said Alex Molinaroli, president, Johnson Controls Power Solutions.

A123 was directed to place the breakup fee and expense reimbursement in escrow after A123′s creditors’ committee suggested to the court that Johnson Controls was lobbying against the sale of A123 to Wanxiang.

“As a market leader and major employer with significant operations in the United States, we have expertise and insights regarding the industries we serve, which are important resources for leaders and decision makers. Our representatives regularly provide educational material and expert opinions on many topics including advanced batteries, lithium-ion technology and the various applications they serve,” said Molinaroli.

Johnson Controls defends itself in saying it maintains an active government relations function that involves regular interaction with policy makers and agencies on the full range of issues relevant to the company. The activities of Johnson Controls’ representatives involving public officials are consistent with First Amendment rights to free speech and are strictly governed by the company’s ethics policy and comply with government regulations.

The significant issue of U.S. regulatory approval required for any sale of A123 to Wanxiang has been a constant challenge dating back to Wanxiang’s original failed attempt to acquire A123 earlier in 2012, prior to bankruptcy.

Johnson Controls says it has consistently maintained that national security questions tied to the core technology used in all of A123′s businesses represent a risk to the sale which cannot be dismissed until resolved by the government review process.

Johnson Controls says it shared and still shares concerns that have been voiced by members of Congress and other interested parties and therefore will continue to monitor this process.

“Should the sale of A123 Systems to Wanxiang not be completed for any reason, Johnson Controls remains open to considering future opportunities to acquire relevant portions of A123′s assets, keeping this critically important technology in the United States, preserving jobs and furthering the purpose of the American Reinvestment and Recovery Act,” said Molinaroli.

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Johnson Controls said Dec. 9 it officially withdrew from the bankruptcy auction to acquire portions of A123 Systems when it declined to match a higher bid submitted by Wanxiang.

Subsequently A123 representatives have announced they selected Wanxiang’s bid of $257 million as the best offer for the total company over a set of competing complementary bids by Johnson Controls for the automotive and government assets and NEC for the grid and commercial assets.

As is usual for such matters, the final sale is subject to approval by the bankruptcy court. A hearing is currently scheduled for Dec. 11.

The sale to Wanxiang is also subject to review by the Committee for Foreign Investment in the United States (CFIUS) and requires approval by the U.S. government. None of the involved parties can confirm any timing for such review and approvals.

“While A123′s automotive and government assets were complementary to Johnson Controls’ portfolio and aligned with our long-term goals, Wanxiang’s offer was beyond the value of those assets to Johnson Controls,” said Alex Molinaroli, president, Johnson Controls Power Solutions. “Reports by other parties that our proposal involved an elimination of jobs in Michigan are inaccurate.”

Johnson Controls said as it was announcing the withdrawal of its bid that it was the first in the world to produce li-ion batteries for mass-production vehicles, and also launched the first U.S. facility to produce complete li-ion battery cells and packs for hybrid and electric vehicles, in Holland, Mich.

“Johnson Controls remains committed to the advanced battery industry and shares the Department of Energy’s goal to advance the domestic capability in the United States,” said Molinaroli.

A123 had not yet commented on the matter when we uploaded this article, early Monday morning, Dec. 10. We will update with any relevant info as soon as possible.

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