Although Cobasys currently serves as a battery supplier for GM's current and future hybrid programs, it may soon become a subsidiary of the General. Sources close to the supplier say GM's currently arranging to purchase the battery maker in its entirety.
Automotive News reports that the beancounters in Detroit have already contracted with a consulting firm for a financial audit of Cobasys, which is currently co-owned by Chevron Corp. and Energy Conversion Devices, Inc.
The first rumblings of Cobasys' sale emerged last month in ECD's quarterly filing to the Securities and Exchange Commission. The report mentioned that both sides were looking to divest themselves of the battery operation.
Such a purchase could help keep Cobasys afloat. Although Chevron and ECD both own 50 percent of the venture, both sides are fighting for majority control. Chevron also accused ECD of failing to fund their part of Cobasys. Arbitration between the two parties was scheduled for February, but was halted to pursue a possible sale.
The aforementioned SEC filing also referenced an "unnamed customer" - more than likely GM - has helped keep the firm afloat by loaning money for tooling and purchasing batteries at higher prices. Even so, Cobasys lost close to $76 million in 2007 and expects to lose a similar figure in 2008.
GM certainly has an interest in keeping the supplier afloat. If Cobasys folds, the automaker is without a battery source for mild hybrid versions of the Chevrolet Malibu, Saturn Aura, and Saturn Vue. Automotive News says GM can't switch suppliers until the launch of their next-generation mild hybrids, slated for a 2010 introduction.
If that weren't heavy enough, Cobasys is one of two firms contracted to develop lithium-ion battery packs for the Chevrolet Volt plug-in hybrid. GM is scrambling to move the Volt from concept to production, but battery development - relegated mostly to Cobasys and A123 systems - is reportedly a major stumbling block.
Source: Automotive News