Apple share price up, faces lawsuit over poaching A123 Systems’ top engineers

Manufacturer of advanced lithium-ion batteries A123 Systems is suing Apple Inc claiming that the iPhone giant stole its leading engineers and researchers.

A123 Systems, wholly owned by the Chinese car parts maker Wanxiang Group, launched a lawsuit against Apple earlier this week accusing the Cupertino, California-based company of poaching its employees in order to establish a vehicle battery division that is “similar if not identical” to A123s.

The Massachusetts-based company said it was forced to shut down a number of its projects due to the lack of PhD employees to replace the ones thatApple poached.

According to the lawsuit filed in the federal court of Massachusetts, leading engineers on several crucial projects left A123 to join Apples similar unit in June, breaching their employee non-compete contracts.

The company is also suing five of its former employees, all of whom headed different project in A123s system venture technologies division. One of the defendants was head of that unit.

A123 said that it had warned Apple that its new employees are in breach of their former contracts and looked for assurance that the iPhone maker would not compete on the battery market. However, Apple ignored the majority of A123s letters. Therefore A123s lawsuit also includes claims of unfair competition.

The lawsuit confirms reports of Apple systematically hiring new employees from a variety of car companies in order to beef up its secret car division.

Apples car unit, believed to be led by Steve Zadesky, who also guided the development of the iPod and iPhone, is projected to have around 200 employees.

According to a person with knowledge of the matter, cited by Bloomberg, Apple aims to start production of electric vehicles by 2020. However, the person warned that the project could be dropped if executives do not like the speed the project is moving at.

However, the set timetable may be a bit ambitious even for Apple as car companies tend to work on a vehicle for around five to six year before they start production. Additionally, rival Google has been working on it autonomous vehicle project since 2010 and has set the release date to be between 2017 and 2020.

Apple Inc lost 0.21% on Thursday and closed at $128.45 on the NASDAQ, marking a one-year increase of 67.32%. The worlds largest company is valued at $748.19 billion. On Friday the stock edged up 0.30% to $128.84 during pre-market trading.

According to CNN Money, the 41 analysts offering 12-month price forecasts for Apple have a median target of $135.00, with a high estimate of $165.00 and a low estimate of $60.00. The median estimate represents a 5.10% increase from the last closing price.