Fletcher in the News

Prof. Brookfield Weighs in on Wanxiang's Pending Purchase of A123 Systems

Despite the concern about China snatching American technology, the Chinese company slated to buy Waltham battery maker A123 Systems Inc. has been a fixture in US manufacturing for two decades, building a base in the Midwest and saving thousands of old-line factory jobs at a time when local businesses were folding.

Wanxiang America Corp., the North American arm of a Chinese conglomerate, owns several auto parts factories in the United States, and provides parts for one out of three cars manufactured in America. It is a major property owner in the Midwest, leasing to Walgreens drugstores among other businesses, and its growing presence in the alternative energy business includes a large stake in GreatPoint Energy of Cambridge.

Supporters say Wanxiang is a model corporate citizen in its American communities. Its Chinese executive sent his children to local public schools, and the company finances exchange programs to China for local students. Moreover, they said its investments have preserved American jobs in the heartland….

…To some, A123's purchase by Wanxiang demonstrates how the United States is falling behind, despite putting millions of taxpayer dollars into clean energy companies. A123, for instance, used about $133 million in public funds to build two automotive battery plants in Michigan, only to file for bankruptcy in mid-October, the victim of high production costs, slow adoption of electric vehicles, and a costly recall earlier this year.

“With the US government underwriting A123, there’s probably a certain irony that the technologies there may end up in the control of a Chinese company, said Jonathan Brookfield, associate professor at the Fletcher School at Tufts University.

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