Why Bob Lutz is wrong about A123 Systems' new Chinese investor

A message to Bob Lutz, former General Motors vice chairman, and proponent of the Chevrolet Volt and Via Motors' plug-in electric vehicles. Regarding your guest column in Forbes lambasting the federal government for granting battery maker A123 Systems a Department of Energy grant and allowing a Chinese company to step in as an A123 investor/owner: Get over it!

While A123 Systems is in a desperate situation with financial losses related to the Fisker Karma – whichkeeps having problems – when it comes to federal financial support and making deals with Chinese investors, there are a few things you left out. For example: your own management role at General Motors when the federal government executed a large ownership stake investment and required GM to strip down the dealership network. Whether or not the feds should stay out of corporate bailouts or grant DOE grants and loans to greentech companies may be worthwhile to debate, but it is unavoidably part of the landscape these days, for better or worse.

Another irony is your criticism of A123 for cutting a deal with Chinese auto parts company Wanxiang since you say doing business with the Chinese government and corporations is bad for U.S. business and autonomy. You write: "If we can't get our act together soon, the country will 'go Chinese' company by company, institution by institution, industry after industry. There will be no need for a military conflict against an overwhelmingly superior force: the Chinese will simply buy the country, a little piece at a time."

The U.S. is no longer the sole dominant force in global economics and military prowess. I think this is just another aspect of seeing the global auto industry, and the global economy, as it really is. Chinese automaker Geely Group stepped in when Ford stepped out in 2010, and Ford and General Motors have partnerships with Chinese manufacturers selling products to the rapidly growing China auto market. There's also the part about global automakers setting up production facilities in China and selling their own products in the market.

Whether or not A123 Systems survives, the federal grant and Chinese investment do seem to be pretty logical in the context of what's been happening lately. There might even be a few positives to this situation, such as accessing a larger investment pool and market for green vehicles and technologies, as well as forging more peaceful relations with China.



Source: Autoblog Green