Energy report blasts West Michigan battery maker

A U.S. Energy report accuses a Michigan-based battery maker of wasting federal funds and failing to move production to the state from South Korea.
AP Wire
Feb 14, 2013

 

The special report released Wednesday by the Energy Department says Holland-based LG Chem Michigan has spent $142 million in American Recovery and Reinvestment Act funds, but has not "yet achieved the objectives outlined" in its plan for producing lithium-ion polymer batteries for electric vehicles.

Work was to have started in 2012 and the company was expected to make battery cells for 60,000 electric vehicles by the end of this year. But the report says no battery cells for electric vehicles have been produced and that only half the jobs planned have been created.

Comments

HueJastle

I worked there during the construction the place was a joke from the start

gordbzz231

maybe the companies that get federal money should be montitored more closley, next it will bankrupcy and they will disappear just like the other company that supposed to produce solar panels, i dont understand the thing about Korea, what the heck ?

GH55

LG Chem is a Korean based company that was to move the production of the Volt and Ford Focus Electric batteries to the Holland facility!
I can only imagine the production levels were massively over estimated for these vehicles and the numbers of batteries required are no where near what would require production in this new facility.
One can only hope that the contract included some failure to perform clause! Or just have Ford and Chevy debit them the cost! That's how they normally recoup costs for bad parts. Just deem the parts coming from Korea facilities bad!
Until gas more than doubles in price, I don't see these vehicles taking off!

gordbzz231

thats right, i forgot that the compnay was based out of korea, i cant see spending 35,000 bucks for a electric car anyway !!!

Lanivan

Talk about loosey-goosey - and I'm referring to both this article and the deal. LG Chem Michigan was given $1.62 million of stimulus funds to build a plant in Holland and transfer production from Korea to build batteries for the Chevy Volt. The transfer never took place even though Chevy Volt sales averaged 1,955/month through 2012, and the new plant would have been able to meet demand.

LG Chem Michigan has paid back 1/2 the funds ($842,000), but the real kicker is that no language was written into the Federal DOE grant to provide any leverage in requiring the shift in production to the Holland plant. No oversight protection at all - Oy vey!

Vladtheimp

Some Context:

Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds, according to estimates provided to Reuters by industry analysts and manufacturing experts. GM on Monday issued a statement disputing the estimates.

It currently costs GM "at least" $75,000 to build the Volt, including development costs, Munro said. That's nearly twice the base price of the Volt before a $7,500 federal tax credit provided as part of President Barack Obama's green energy policy.

Other estimates range from $76,000 to $88,000, according to four industry consultants contacted by Reuters. The consultants' companies all have performed work for GM and are familiar with the Volt's development and production. They requested anonymity because of the sensitive nature of their auto industry ties.

An interesting statistic was revealed on GM's sales conference call. Government purchases of GM vehicles rose 32% from last year. This represents yet another conflict as the Obama Administration has a vested interest in GM's success as it spends more taxpayer dollars to help support the company as 2012 elections near. (National Legal and Policy Center)

LANSING - Governor Jennifer M. Granholm today announced state approval of a 15-year, 120.24- acre Renewable Energy Renaissance Zone in the city of Holland that will be home to the new LG Chem-Compact Power Inc. advanced battery facility.
“Michigan is becoming a world capital for advanced batteries,” Granholm said. “Investments in clean energy manufacturing such as advanced batteries are creating jobs in Michigan and moving our state and nation to a clean energy economy.”
The project is expected to create up to 300 jobs and generate $302 million in private investment. Compact Power expects to produce 15 million battery cells per year when the plant is at full capacity.
“This expansion by one of the world’s leaders in battery technology innovation will spur further job creation and economic development in the region,” Michigan Economic Development Corporation President and CEO Greg Main said.
A Renaissance Zone allows a company operating within the zone to operate free of virtually all state and local taxes over the life of the designation. http://www.michiganadvantage.org...

Lanivan

This burden on the taxpayers is terrible, isn't it? It brings to mind the Pentagon's F-35 Joint Strike Fighter Program that has increased costs 75% from 2001 to about $400 billion in 2013.

With all the cost overruns with the Chevy Volt, I wonder why Ford, Volkswagen, Toyota, BMW, and others are coming out with their versions of the PHEV? Must be entirely based on the big bucks ($2 billion) appropriated for research and development incentives through the Energy Independence & Security Act of 2007. Can't be because they are in demand and selling!

As for that conference call, I look at this as "buying local".

 

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