Auto Parts Maker Hires Wiley Rein to Stop Chinese Battery Deal

With a Chinese company moving closer to acquiring most of a bankrupt U.S. battery maker for $256.6 million, a Milwaukee-based auto parts manufacturer that bid for the firm has hired a team of Washington lobbyists from Wiley Rein as part of an effort to thwart the deal.

Johnson Controls Inc. has enlisted Wiley Rein public policy consultant Scott Weaver and former Representative Jim Slattery (D-Kan.), a partner who leads the firm's public policy practice, to educate members of Congress about how the sale of A123 Systems Inc. to Chinese auto parts maker Wanxiang America Inc. would impact U.S. Defense Department contracts, according to lobbying registration paperwork filed with Congress on Friday. Slattery said he's made contacts with congressional offices about the proposed transaction.

"There's concern" on Capitol Hill about the A123 deal, he said.

Although Navitas Systems LLC, based in Woodbridge, Ill., would receive A123's U.S. military contracts for $2.3 million, Republican Senators Chuck Grassley of Iowa and John Thune of South Dakota have been vocal about the potential national security implications related to Wanxiang purchasing a company that has technology used by the Defense Department, and is the recipient of about $250 million in government stimulus grants intended to bolster lithium-ion battery manufacturing.

"While we welcome foreign investment in the United States, we must ensure that national security and taxpayer interests are appropriately addressed," the senators wrote in a November 1 letter to U.S. Treasury Secretary Timothy Geithner.

The deal, which the U.S. Bankruptcy Court for the District of Delaware endorsed on December 11, must also secure the approval of the Committee on Foreign Investment in the United States, which Geithner heads.

Dave Vieau, Chief Executive Officer of A123, said in a written statement after the court's decision that his company is "confident" the Committee on Foreign Investment in the United States will back their plan to sell their assets.

"We believe an acquisition by Wanxiang will provide A123 with the financial support necessary to strengthen our competitive position in the global vehicle electrification, grid energy storage and other markets, and we look forward to completing the sale," Vieau said.

Wanxiang and A123 don't have lobbyists registered to advocate for them, according to congressional records.

But Johnson Controls spent $266,500 on federal lobbying during the first three quarters of this year. For its government affairs work, the company used its own staffers, as well as lobbyists from Dutko Worldwide.