l****z
发帖数: 29846 | 1 U.S. Grant Funded Workers' Play at LG Chem Factory
By RYAN TRACY
WASHINGTON—The Obama administration's electric car efforts took another hit
on Wednesday after a federal inspection found a South Korean advanced
battery maker never scaled up U.S. production despite receiving $142 million
in federal grants.
A Holland, Mich., factory owned by LG Chem Ltd., 051910.SE +0.17% part of LG
Corp., 003550.SE +0.64% was half-funded by a government grant and estimated
to add some 440 jobs building battery cells for General Motors Co.'s GM -3.
10% Chevrolet Volt and other vehicles.
When demand for the plant's batteries didn't meet expectations, the company
filled orders with cells made at a factory in South Korea, leaving the
Michigan plant largely idle, according to the report by the Department of
Energy's Inspector General, Gregory Friedman.
LG Chem said in a statement that production delays at the Michigan facility
were "market-driven," adding that it is "developing specific plans for the
start of production." The company said it regretted that it applied for
reimbursement for "employment costs that were not allowed" under its U.S.
grant.
The inspector general said that to avoid layoffs at the factory LG Chem paid
idle workers $1.6 million in the third quarter of last year, about half of
which was covered by its U.S. grant, even though there was nothing for them
to do. The workers played board games, watched movies, and volunteered at
local animal shelters during regular work hours, Mr. Friedman said. LG Chem
has since paid back the government's share of those charges.
"Until the shift in production takes place or some alternative use for the
plant is developed, U.S. taxpayers will receive little direct benefit from a
plant for which they provided up to half of the funding," Mr. Friedman said
in his report.
In 2010, Mr. Obama attended the plant's groundbreaking and said such grants
would "unleash private sector growth" and called the factory "a symbol of
where America is going." The facility today has about 150 workers, some of
whom are hourly employees and are furloughed one week a month.
LG Chem is the latest of several recipients of federal funds, including
solar panel maker Solyndra LLC, that haven't panned out. Solyndra filed for
bankruptcy in 2011. The inspection report on the Electric Drive Vehicle
Battery and Component Manufacturing Initiative grant came a day after
President Barack Obama lauded U.S. efforts to invest in alternative energy.
"Four years ago, other countries dominated the clean energy market and the
jobs that came with it. And we've begun to change that," Mr. Obama said in
Tuesday's State of the Union address.
The DOE initiative that funded LG Chem's factory in total provided about $2
billion in grants to more than two dozen companies building advanced batters
and other components for hybrid and electric cars.
Another recipient, A123 Systems Inc., AONEQ +4.00% got about $250 million in
federal funds for plants in Michigan. It filed for bankruptcy in October
and its automotive assets have been sold to a Chinese auto-parts firm. The
new owner is expected to continue operating in the U.S.
The Department of Energy's deputy assistant secretary in charge of the grant
program, Kathleen Hogan, said in a written response to Wednesday's report
that the funding for LG Chem was part of an effort to "continue to grow the
manufacturing sector in the United States." She said the electric vehicle
industry "hasn't grown quite as quickly as expected," but will become "an
enormously valuable and growing market."
Mr. Friedman's report said that while LG Chem had said it planned to move
battery production to Michigan from South Korea, there was no explicit
requirement for it to do so in order to receive federal funds. The company
built three of five planned production lines, but underestimated labor costs
—apparently unaware of a requirement that it pay prevailing wages—and no
longer has enough grant money to complete production.
The facility has produced test battery cells, but none have equipped
Chevrolet Volts. LG Chem officials told Mr. Friedman's office that shifting
production to Michigan now would "result in financial losses on battery
cells produced in the U.S.," according to the report.
Demand for the Volt and other electric vehicles has been below expectations.
The Michigan plant was to have the capacity to produce enough battery cells
to equip 60,000 vehicles a year. GM sold 23,641 Volts in the U.S. 2012.
A GM spokeswoman said it was the auto maker's understanding that LG would
build a U.S. plant to supply Volt battery cells. She declined further
comment on the plant's activities.
Rep. Lamar Smith, a Texas Republican who is chairman of the House Science
Committee, called the LG Chem case an "outrage." "The president wants more
money to fund more pet projects, but it is clear that his administration
hasn't been responsible with what they've already been given," Mr. Smith
said in a statement.
—Jeff Bennett contributed to this article.
Write to Ryan Tracy at r********[email protected] | l****z
发帖数: 29846 | 2 Orin Armstrong Wrote:
Quoting from the article, Obama called the factory "a symbol of where
America is going." Well, Obama got that one right! | s**********r
发帖数: 339 | 3 好
hit
million
LG
estimated
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【在 l****z 的大作中提到】
: U.S. Grant Funded Workers' Play at LG Chem Factory
: By RYAN TRACY
: WASHINGTON—The Obama administration's electric car efforts took another hit
: on Wednesday after a federal inspection found a South Korean advanced
: battery maker never scaled up U.S. production despite receiving $142 million
: in federal grants.
: A Holland, Mich., factory owned by LG Chem Ltd., 051910.SE +0.17% part of LG
: Corp., 003550.SE +0.64% was half-funded by a government grant and estimated
: to add some 440 jobs building battery cells for General Motors Co.'s GM -3.
: 10% Chevrolet Volt and other vehicles.
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