Lawmakers press for answers, assurances after sale of US company to Chinese rival
Published February 01, 2013
WASHINGTON – Lingering security concerns over the sale of a bankrupt U.S. battery company to a Chinese automaker were re-aired during a classified briefing Thursday afternoon, FoxNews.com has learned.
Those attending included members of the Senate Banking Committee, as well as some Senate leaders' staff members, a congressional source said.
Earlier this week, a federal government committee gave final approval to the sale of A123 Systems to Wanxiang. While not a lot can be done now to reverse the sale of the U.S. taxpayer-backed company, lawmakers like South Dakota Sen. John Thune say they will continue to press for answers on what they call a potential national security threat.
Thune, a member of the Banking Committee, said Friday that he also plans to introduce legislation that would slow the process of selling a company to a foreign competitor.
“Technology produced by A123 and funded by U.S. taxpayers should not simply be shipped off to China so that the military applications for these materials can be reproduced abroad,” Thune said.
Worries that the purchase of A123 Systems by a Chinese company with ties to the Communist Party potentially could expose the United States to a security threat have long plagued the controversial sale. Lawmakers voiced concern that technology developed with the help of a taxpayer-backed stimulus grant would soon be owned by an economic rival.
But earlier this week, Wanxiang cleared the last legal hurdle it needed to complete the transaction. On Tuesday, the Committee on Foreign Investment in the United States gave the company the go-ahead despite bipartisan opposition.
CFIUS in an interagency panel led by the Treasury Department. It has the authority to strike down deals with foreign companies if they threaten national security but very rarely chooses to do so. Many Republicans legislators urged the group to block the buyout but were unsuccessful.
“We don’t have any answers on whether U.S. national security concerns are protected,” Sen. Chuck Grassley, R-Iowa, said in a statement. “The only thing that’s clear is a foreign-owned company will benefit from the millions of dollars given to A123 through the president’s stimulus package. That’s troubling.”
Grassley and Thune have led the charge against Wanxiang. The fear is that the company will take American-made technology and use it against the country. Wanxiang says it won’t and has tried to contain fears by splitting the sale between the military and government operations. The company said the acquisition would provide A123 with the financial backing it needs to strengthen its “competitive” position in the global market.
The history of A123 is a complicated one and efforts to get the company back on track after an embarrassing bankruptcy has been tough. The federal government gave the company $249 million in December 2009 under President Obama’s highly touted economic stimulus program. But A123 couldn’t turn a profit and filed for bankruptcy in October. It went on the auction block and was sold to Wanxiang America Corp., the western arm of the Chinese company. Wanxiang beat out a combined offer to buy the company from Milwaukee-based Jonhson Controls and NEC Corp. of Japan.
Almost immediately critics panned the purchase and fears over national security crept in. To alleviate concerns, Wanxiang said it would create a new independent trust to buy A123’s civilian unit. The civilian arm makes up the bulk of the company’s operations.