LG Chem's idle Michigan battery plant slammed by federal audit
The battery maker was supposed to have supplied General Motors, but has yet to build anything after spending $142 million of grants.
Rather, many of its employees spent their days watching movies, playing games and volunteering for other companies, all while logging hours on a project that was supposed to build enough batteries for up to 60,000 electric cars by the end of 2013. Instead, the government paid these workers about $842,000 not to work.
The revelations, based on complaints from an LG Chem employee in October, come from an audit released by the Energy Department last Friday.
The Holland, Mich.-based lithium-ion battery maker, a subsidiary of South Korean electronics company LG, had agreed to supply General Motors with batteries for the Chevrolet Volt, but instead, due to LG's mismanagement, the automaker was forced to rely on batteries built in LG's South Korea plant.
LG Chem has spent nearly all of its $151 million grant, which was awarded by the Energy Department in February 2010 and taken from the controversial $787 billion stimulus fund in 2009. The plant is only capable of producing 60 percent of its agreed capacity. Less than half the number of expected jobs were created. LG Chem said that demand for the Volt was lower than expected -- this, despite Volt sales tripling last year -- and it underestimated labor costs, according to the report.
The Energy Department said it had "no leverage" to force LG Chem into production under the terms of the grant. It is only requiring the company to repay $842,189 in "questionable costs."
"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," the department said.
LG Chem, in a statement to Automotive News, said that the audit was correct and that it was
President Barack Obama had predicted there would be 1 million electric vehicles on U.S. roads by 2015, but only 53,000 plug-in vehicles were sold last year. Battery maker A123 Systems of Waltham, Mass., went bankrupt in October and was sold to a Chinese parts company just two weeks ago. Other clean-energy companies that received hundreds of millions worth of grants, including solar panel maker Solyndra and battery maker EnerDel, also went bankrupt.
Outgoing Energy Secretary Steven Chu, in a parting letter to department employees on Feb. 1, said that "only 1 percent of the companies we funded went bankrupt" and that the other 99 percent of the more than 1,300 clean-energy companies the department funded have not received the proper attention.
[Source: DOE via Automotive News]
Right on, Frosty! Who the F voted for that loser, anyway? I've never met anyone who has. The only thing that Obankrupt is good at is throwing our money at monumental failures. It will be his only legacy.
Did anyone else get a load of the absolute drivel he spewed out on Tues. night?
May God have mercy on us all
"Outgoing Energy Secretary Steven Chu, in a on Feb. 1, said that "only 1 percent of the companies we funded went bankrupt" "
I don't care what percentage of companies went bankrupt, I want to know what percentage of the dollars spent went to those now bankrupt businesses?
Speaking of piles, I imagine there were a lot of mid level DOE employees holding their noses when the word came down from above that they had to produce a document that supported Mr. Obama's 1 million EV sales goal.
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