The Chicago Tribune had an interesting article in their Sunday Business section, talking about a company that makes a long lasting, safer battery that appears to work well in automobiles. The company name is A123 Systems, and the CEO (?) is a MIT professor named Yet-Ming Chiang. Their innovation packs 600 cells into a case the size of an airplane carry-on bag.

Chiang and his company apparently wished to start manufacturing these batteries in the United States, specifically in Michigan, but no one on Wall Street or in Silicon Valley wanted to lend them the capital to set up the factories they'd need to build in order to start production here.

So A123 built their first plant in China, and got into production quickly. Chiang is quoted in the article: "Without question, we would rather have done it all in the U.S. I'm an American citizen. It's an American-born technology."

They are now building plants in Michigan and in other states. Did they get those venture capitalists to invest in them after showing with the Chinese plants that they could do what they said they could? Nope.

The money is coming from the Obama stimulus program, 250 million dollars to put a number on it. Michigan is giving them significant tax incentives to locate there, also. The first plant will open in June in an abandoned brick building near Detroit. There were some early private investors, including Qualcomm and Motorola, but not enough money cane in to keep from launching the manufacturing in Asia.

A big problem with doing what they did, setting up plants in China, is that they lose the protection of their intellectual properties that make their products better.

A problem for the US is where this company has already gone. They have sales of 91 million last year, and they have about 1700 employees. Unfortunately, 2/3 of those are in Asia.

By the end of next year, they expect to have two plants in the US (in Michigan) with about 400 employees and plans to employ as many as 2000. Average wages in Michigan will be about $13.50 an hour, but these costs will go up as the company work forces unionize, as the work force at A123 is expected to do. Contrast that with Asian workers making about $2.80 an hour.

It is a shame that this company, that wanted to start operations in the US, had to go to China because they weren't able to get investors here. So for those who are complaining about the government spending tax dollars from the stimulus plan, think of the impact that a company like this could have in the future, employing many many people and producing American made products with American technological innovation.