CHICAGO, July 8 -- Less than two years after being on the verge of bankruptcy, A123 Systems, a high-quality automotive battery manufacturer, has been on the mend with aid from multinational Wanxiang corporation headquartered in China's southeastern city of Hangzhou.
A123 expects to have a positive cash flow this year, then positive EBITDA (earnings before interest, taxes, depreciation, and amortization) in 2015, and will finally be profit positive in 2016, Michael O'Kronley, A123's senior director for corporate strategy, told Xinhua.
O'Kronley said that after being acquired by Wanxiang, A123 has become much more focused on its core business, namely the transportation area.
"We are now focused more on transportation market and as a result, we've been able to shed some of the costs and move toward a more focused product strategy in the transportation area, in high voltage and also low voltage applications," he said.
In one of A123's workshops in Michigan, workers assemble automotive batteries with a blackboard beside the assembling line, putting the day's quota for a worker at 30.
Less than two years ago, despite a 249-million-dollar grant from the U.S. Department of Energy, A123, then manufacturing lithium ion batteries for cars and other applications, filed for bankruptcy in October 2012.
"There was a rather competitive bidding war for A123 because we have quite a bit of technology," said O'Kronley. "Ultimately Wanxiang did win that bidding war and brought us out of bankruptcy."
Though he was uncertain about the future of A123 when he purchased it at the beginning of 2013, Wanxiang America President Ni Pin has always been certain about the future of electric vehicles and related automotive batteries.
Ni believed that when batteries for electric vehicles make a breakthrough, electric vehicles will grab half of the auto market, and become a big part of our lives.
As a sign of his confidence in electric vehicles, Ni said Wanxiang bought Fisker Automotive, a first-class electric vehicle manufacturer, early this year, to make the company's electric vehicle production chain complete.
Now with Wanxiang in the picture, A123 is moving forward quickly, Ni said. It is launching a new cell for hybrid type applications, specifically for buses.
The battery, designed and developed initially by A123, is expected to be launched in a brand new Hangzhou facility that is integrated as part of Wanxiang's acquisition.