Friedman said that only three of five planned production lines were complete, that less than half of the expected 440 jobs had been created and that battery production had not yet begun. General Motors, which was expected to buy batteries from the plant in Holland, Mich., is still buying the electric-car batteries from LG Chem in South Korea.
LG Chem Michigan has reimbursed the Energy Department for $842,189 in costs the inspector general found to be “unreasonable and unallowable” for time employees spent working for Habitat for Humanity, animal shelters and outdoor nature centers. Friedman said that those labor costs might have been higher but that, because the company did not keep detailed records, it was hard to quantify the time workers spent on those activities.
News of LG Chem Michigan’s idle workers was first reported by various Michigan newspapers and television stations in October.
The 650,000-square-foot plant — which is also eligible for more than $175 million in tax relief from the state and local governments through 2025 — was supposed to produce lithium-ion batteries to support the manufacture of 60,000 electric vehicles by the end of 2013.
The July 15, 2010, groundbreaking was attended by President Obama and then-Gov. Jennifer Granholm (D), who said Michigan would become the “North American battery capital.”
Obama has spoken often of his desire for the United States to recapture global leadership in clean-energy technologies such as lithium-ion batteries for electric cars. He said in 2010 that the LG Chem Michigan venture was “leading the way in showing how manufacturing jobs are coming right back here to the United States of America” and that by 2012, batteries for the Chevrolet Volt and the electric Ford Focus could be “stamped ‘Made in America.’ ” He said the plant was a “symbol” of where Holland, Michigan and America were going.
Sales of electric vehicles have lagged behind expectations, especially those of Obama, who aimed at having 1 million electric vehicles on the road by the middle of the decade. The Chevy Volt is the best-selling electric vehicle; GM said it sold 30,090 Volts worldwide last year.
For those cars, GM has been buying LG Chem lithium-ion batteries made in South Korea. As a result, LG Chem has put its Michigan workers on rotating furloughs. At its peak, there were 215 jobs there; by the time of the inspector general’s review there were 200.
Friedman’s report sharply criticized the company as well as the Energy Department.