By on February 14, 2013

Three years ago, at a groundbreaking ceremony for an LG Chem Battery plant in Holland, Michigan, President Obama promised that this and other pants will be “a boost to the economy in the entire region.”  Instead, the plant has become an example for what is wrong with a state-directed command economy. It also is yet another chapter in the Chevrolet Volt debacle.

Half of the plant’s $300 million price was funded by the tax payer, courtesy of a $150 million government grant.  The  plant does nothing. Its workers  “had little work to do and were spending time volunteering at local non-profit organizations, playing games and watching movies at the expense of the federal government and taxpayers,”  Gregory Friedman, inspector general at the Department of Energy, concluded in a report made public yesterday.

At the groundbreaking, President Obama said:

“The workers at this plant, already slated to produce batteries for the new Chevy Volt, learned the other day that they’re also going to be supplying batteries for the new electric Ford Focus as soon as this operation gears up. That means that by 2012, the batteries will be manufactured here in Holland, Michigan.”

Not true. According to a Reuters report, the plant has not shipped “any products used in vehicles sold to the public.” Reports that ask why hear that the Volt did not sell in the expected quantities.

At the groundbreaking, Obama told workers that they are “leading the way in showing how manufacturing jobs are coming right back here to the United States of America.” Not true. The few batteries that are used in the Volt are made in Korea.  Workers in the plant show how tax dollars go to waste, spending “their time watching movies, playing cards and board games, or volunteering at local organizations – all on the U.S. taxpayers’ dime,” as the Reuters report says. The only batteries this plant ever produced were test samples that were destroyed.

At the groundbreaking, President Obama said:

“This is the ninth advanced battery plant to begin construction because of our economic plan. These plants will put thousands of people to work. This includes folks who are working at a couple of facilities being built in Michigan by another battery technology company called A123.”

A123 went bankrupt. Instead of bringing jobs back to America, the  plant was sold off to China.

At the groundbreaking, President Obama said: “This plant will prove that we are headed in the right direction.” The plant did just the opposite.

Even the Detroit News, usually very sympathetic to government programs that bring money to Michigan, can’t help itself, and writes:

“President Obama said in his State of the Union address on Tuesday that he wants to establish 15 “manufacturing hubs.” Hey, why set up 15 hubs? They can all just come to Holland and talk to the folks at LG Chem about how you succeed as a manufacturer by making nothing and selling nothing – while collecting lots and lots of government money.” 

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57 Comments on “Solyndra, A123, Now LG Chem: Your Tax Dollars, Not At Work...”


  • avatar
    danio3834

    Statists gonna state.

  • avatar
    TheAnswerIsPolara

    “…this and other pants…”

    LOL. As in, Liar, Liar Pant of Fire?

  • avatar
    toplessFC3Sman

    This story would be much more complete if some reason why the plant is inactive was given. Have GM & Ford just not placed any orders for batteries from them? Were the test samples produced inadequate or defective mechanically/chemically, or just too expensive?

  • avatar
    mike978

    “It also is yet another chapter in the Chevrolet Volt debacle”
    Outselling the Prius plug-in and the Leaf is a debacle?

    “Instead, the plant has become an example for what is wrong with state-directed command economy.” – you mean like Japan and Germany are?

    • 0 avatar
      TheAnswerIsPolara

      Just to be clear, narrowing your comparison doesn’t really help. Chevy Volt and Prius Plug-in are two different animals. Let’s compare sales of Prius Hybrid and Chevy Volt; that seems to make more sense. In that case, Chevy has a long way to go.

      I really do hope that we can bring next gen manufacturing back to the US. But, I’m not sure that the government has a good track record of picking the winners. I think that’s all this article is pointing out.

    • 0 avatar
      alf42

      Since the Volt was introduced, I can count the number I’ve seen on the road on one hand. The car was supposed to revolutionize the auto industry. The car is a perfect symbol for this administration. So much was promised and so little delivered.

      I applaud you Bertel. You and those like you are the only ones standing between this president and a fawning, totally compliant US media.

      • 0 avatar
        mike978

        I agree it hasn`t sold in the numbers some suggested years before it came out. But it and its ilk (Leaf, Focus EV, Prius plug-in etc) have sold int he tens of thousands now so there is some demand. I personally wouldn`t buy one due to my lifestyle and location but for some it works.

        Totally compliant media – you must have missed talk radio and some TV channels.

    • 0 avatar
      MrGreenMan

      @mike978

      I just wish the Volt had been $10k cheaper. I did the calculations for my business, and, at that price point, it would have made sense. We’re looking at the C-Max now as a more sensible proposition, even at the real-world 38-40mpg. General Motors was in no position to provide the same level of subsidy on the Chevy Volt as Toyota did in the 90s. (Then again, it must have been great to have all the cash from the Reagan-UAW import quotas that were a Toyota/Honda profit margin protection.)

    • 0 avatar
      noxioux

      Yep. If based solely on market demand, and not governmental interference, the Volt would not exist outside a few showroom examples or auto expos. It’s nothing more than an overpriced exercise in hipster shoegazing, just like the Prius, but without the WIN.

  • avatar
    Conslaw

    In this world with almost 8 billion people, if you rely on pure, free-trade capitalism, if all you have to sell is labor, you have nothing of value. Let’s say your skills are one in a million. That’s great, in China, there are 1,000 people as good as you. We can continue the race to the bottom without putting up a fight, or we can experiment to see if we can get some kind of competitive advantage.

    • 0 avatar
      MrGreenMan

      But this isn’t really experimentation, is it? It’s passing taxpayer dollars to politically-connected friends of the current administration to produce a product called for out of a political instead of market-driven need.

      These things are designed to fail; it’s all a cynical raid on the treasury. America was told it was electing somebody who was opposed to crony capitalism; instead America has elected the king of crony capitalism.

      If there was something America should have learned from the pump-and-dump General Motors did to Michigan, it was that, when governments subsidize the rent-seeking behavior of corporations, there is never a net positive. As soon as the taxpayer stops giving it away for free, some other taxpayer will be found, and the jobs never materialize.

      • 0 avatar
        mike978

        Oh I think Bush can vie for king of crony capitalism. Ever looked into Halliburton et al?

      • 0 avatar
        MrGreenMan

        @Mike978

        Mr. Bush may have been the king then, but he is not upon the throne. Further, Mr. Obama specifically ran against this sort of activity, but has engaged in it just as whole-heartedly. (Wasn’t hypocrisy the only political sin?) Further, I didn’t see him rip up those Halliburton contracts when he became president; two sides of the same coin, I just had The Hope that one of Mr. Obama’s claims would have been true.

        I don’t have a shrine to Mr. Bush or subscribe to the idea that there’s some giant difference between what the two parties have on offer. Calvin Coolidge was a good president. After him, not so much, especially when judged by the rate of debt accumulation, which is accelerating, which is going to be a permanent drag until we default and experience hyperinflation. Then the benchmark Large Buick Sedan is going to go from $20k in 1987 to $45k now to $100k or more.

    • 0 avatar
      danio3834

      All of those nearly 8 billion people are also potential consumers. It’s not necessarily a race to the bottom, but a race to equilibrium.

      • 0 avatar
        Conslaw

        Danio, you’re technically correct, but to Americans, equilibrium will look a lot like the bottom. Furthermore, at equilibrium, the rich will be even richer, and the poor will be much poorer, and who knows what kind of political instability that economic equilibrium will bring.

      • 0 avatar
        jandrews

        Conslaw -

        That’s the point I don’t think most consider about economic equilibrium in a globalized world. The US has been richer and had more than almost everyone for close to 70 years now.

        Most Americans alive today can’t conceive of the world being any other way, because this is all we’ve known.

        A little research into the emerging BRIC economies makes it very apparent that in another decade to two, the US will still be the biggest dog on the block, but it will have a lot of substantial company, the likes of which hasn’t existed since the collapse of the USSR.

        Wealth is not finite, but production capacity is, and as others around the world start to want more, will there be enough of everything to satisfy everyone’s wants?

        We’ve had it good in this country for a long time. I wonder if we’ll witness the end of that soon.

    • 0 avatar
      gslippy

      @Conslaw:

      Besides the political posturing, the basic problem is that there isn’t enough demand for EV batteries because consumers want EVs to replicate the gas-powered ownership experience. This means fillups in minutes (not hours), reliable range reporting, and reasonable cost.

      Even Asian-made batteries don’t offer these things.

      One could maybe defend spending taxpayer money for the research to solve these problems, but not to produce uncompetitively-priced product in a very tenuous market.

  • avatar
    Gardiner Westbound

    “If you put the federal government in charge of the Sahara Desert in five years there would be a shortage of sand.” – Milton Freedman

  • avatar
    thelaine

    It should be clear why some people resist having their taxes raised.

    Battery scams, solar scams, wind farm scams, ethanol scams, agribusiness subsidies, subsidies for middle-class and wealthy car buyers, corporate welfare, union bailouts, old-fashioned welfare for the lazy and malingering, entitlements to current benefits with money stolen from future generations via massive debt, etc…

    Then someone comes along and says we need to raise taxes so we have more money to fix the roads, or for some other basic government function. I don’t think so. Fix the roads first. Then build your perpetual motion machines and spread the wealth around to your friends, benefactors, and supplicants.

    There is plenty of money for the basics, but we don’t do that anymore.

  • avatar
    APaGttH

    But weren’t all these ‘guberment handouts and DoE loans coming from a Bush Aministration approved program back in 2007?

    Oh never mind I forgot, it’s Fox News Thursday at TTaC.

    Yup, the best selling electric in Ameria, quite the debacle. How did that Tesla do yesterday? How many Leaves sold? Who put $10,000 on the hood of te non-selling Ford electric?

    How about a story on what a debacle Toyotas return to sports cars has been. In 8-1/2 months they didn’t sell 12,000 FR-S coupes, for an annualized run rate of about 16,100 units. Where did all those FR-S buyers go???

    Nah…..why compare to another endless hype machine that hasn’t come close to living up to its promise – it’s Japanese!

    • 0 avatar
      mcarr

      Oh yeah, I forgot. “It’s Bush’s fault.”

      Tell, me, when will we be able to credit the current administration with anything? I mean, maybe they really haven’t done anything in the past 5 years…

      • 0 avatar
        APaGttH

        Lets start with some key points here:

        1) I do not like Obama, I have not voted for him in either election (for the record I did write in votes for both elections)

        2) I was not a fan of Bush (43) either, however as the years tick by, and I have already posted this here, I think his ranking will move up the Presidential chart to the middle of the pack – he wasn’t THAT bad, flawed absolutely, and the Iraq War was a huge fiasco, but there are some things history will show he got right (and this is not a political site, I am not going to go into debate on what they are)

        So with that said, and the question of “Bush’s fault,” since you brought it up.

        It was President Bush who issued the 10 in 20 challenge, and it was a GOP House and President Bush that passed/put a signature on the Energy Independence & Security Act of 2007.

        http://en.wikipedia.org/wiki/Energy_Independence_and_Security_Act_of_2007

        I am not connecting to Wikipedia for the nuances or translation of the act, but to show the signing date – which lets face it, its pretty near impossible to fake as you can cross reference a dozen other government sites to confirm.

        This is the most critical document, that provides the timeline and provisions:

        http://assets.opencrs.com/rpts/RL34743_20081113.pdf

        The Act was passed in December 2007 but was unfunded.

        The Act became funded on September 30, 2008 when the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act was passed. This opened up $25 billion for use by auto makers and suppliers alike to create fuel efficient vehicles, “clean diesel,” and battery technologies.

        On November 5, 2008, DOE announced an interim final rule for the program. There is a 30 day comment period and then it becomes basically the rule of the land. The final rule was announced the day after the 2008 election. Remember, all of this was pushed through by the Bush Administration.

        Key points of the Act:

        Section 132, requires the Departmentof Energy (DOE) to create a grant program to “encourage domestic production and sales of efficient hybrid and advanced diesel vehicles and components …”

        Section 134, authorizes loan guarantees for production of fuel
        efficient vehicles or parts of such vehicles

        Section 135, requires establishment of a DOE program to
        provide loan guarantees for manufacturing advanced vehicle
        batteries and battery systems

        Section 136, which authorizes a DOE “Advanced Technology
        Vehicles Manufacturing Incentive Program” — this includes both a
        grant program and, as subsection (d), the direct loan program

        Now, there is a very important word in Section 132 and 135. REQUIRES. That is the language that was written in 2008 and approved by – the Bush Administration.

        Don’t shoot the messenger on this one. It wasn’t written, hey create a program but do nothing, it is you’re REQUIRED to do SOMETHING. This was passed and written before the 2008 election, and finalized the day after the election (and lets face it, this was written overnight when someone at the DoE concluded that McCain wasn’t going to win)

        You mistaken me for someone who is an Obama supporter and lover/happy of government waste. I’m neither. But I also prefer to work with oh I don’t know, facts and the truth.

        The facts are the roots of these loan programs were passed in 2007 by the Bush Administration and the “REQUIREMENTS” were passed in September of 2008. The roosters have come back to roost on what was a flawed policy – but the Obama Administration sin here was the execution of this program – and not passing an act to roll it back.

        Ahhh, but would have cutting funding to US automakers and their suppliers been a popular action or even politically expedient in the spring of 2009. Of course not. And before you throw down Michigan, UAW, and the Union voter card lets remember – Bush (43) bailed out the auto industry. Obama executed the Bush plan. Even Bush says so when we addressed the NADA last February, citing his reason for bailing out the auto industry was to prevent 21% unemployment.

        I can blame Obama for a lot of things – but this isn’t the site for it. But for this. Sorry, the seeds for this were planted by the previous administration, who then watered the green shoots, and handed over some trees that the Obama administration was mandated to shake the money out of.

        It’s all there in the elections of government public record.

      • 0 avatar
        noxioux

        Never. Because this administration is made up of the kind of people that give everyone in the race a blue ribbon. Can’t have someone feeling bad about coming in last.

  • avatar
    Junebug

    I see someone drinked their CNN/ABC/NBC etc Koolaid this morning, sorry, but if you don’t have a valid comeback to the story presented, you really just fill the air with more pro-bama hot air.

  • avatar
    Sundowner

    the solyndra debacle is part of a larger problem. blaming jsut Obama or Bush doesn’t cover the whole story. When the Chinese flood the market on a whim to bottom out the price of batteries or solar panels, it’s becuase they want to maintain market dominance, and that had an effect in this mess, too.

    You can cry government interfernce all you want and examples of wasted government spending, but here’s a fun tidbit: when the government is the enterprise, all the enterprises that aren’t the government lose. In the 21′s century, it doesn’t even have to be your government anymore.

    • 0 avatar
      Dr. Kenneth Noisewater

      And of course China can do this because they don’t give 2 craps about their local NIMBYs when it comes to mining and refining rare earths. The US has plenty of rare earths, we just don’t imprison or kill our tree-hugging NIMBYs so they don’t get used.

  • avatar
    kosmo

    It took until the 11th reply to go completely off-point and Blame Bush. Pretty good!

    IMO, battery powered cars are almost inarguably the future. How far in the future is the question. At some point, battery technology will take a Big Step Forward, and sizes for a given charge will be reduced about ten fold. As a similar example, look to the recent breakthrough in battery charging times (MIT/industry colaboration) that will soon appear in phones, laptops, etc.

    The problem is that it’s impossible to accurately estimate when this will occur. Could be tomorrow. Could be sometime after our grandkids retire. My bet is more than 10 years, but less than 20.

  • avatar
    Conslaw

    Economically China has been kicking American ass for the last 20 years or more. It’s hard to describe the Chinese economy, but how I would put it is that they respect capitalism, but they don’t pray to the god of capitalism. The state invests strategically and invests infrastructure. There is far more cronyism there than in the US,yet their growth rate dwarfs ours. It helps that their military-industrial complex takes a much smaller piece of the pie. They have tons of problems, children in factories, pollution, lack of freedom. I’m not saying do things the Chinese way, I’m saying China threw out the rule book and did it their way. We need to find our own way, and it won’t be by following Adam Smith.

    • 0 avatar
      alf42

      Our way worked pretty good for the past 230 years. It wasn’t until Obama entered office that people started saying we need a new “way”. Obama is doing his level best to destroy our old way and create a new one. The results speak for themselves: negative GDP growth last quarter on top of an already anemic recovery and longest period of sustained high unemployment since the great depression.

      • 0 avatar
        Advance_92

        Horse pucky. We’ve been aware of and modifying market forces and wealth well before the turn of the 20th century. If you factor in the distribution of land we’ve been doing it as long as the country has been around. It’s not like Obama’s come along and waved a wand and suddenly everything changed. Even Republicans have been building on their single-minded partisanship since the late 80s…

      • 0 avatar
        redmondjp

        Sorry, but offshoring is part of the globalist agenda and is supported by both the Rs and the Ds; it has been occurring far longer than Obama has been in office.

        I remember when I was a kid and was surprised to find out that the Powercraft tools that my dad bought from Montgomery Wards in the 1960s were actually made in Japan.

        Neither party is going to do a thing to fix what ails us. I just watched a 2-hour show on PBS on the Rockefellers, which prompted me to do some further investigation into them. They were (and are) heavily involved in the globalist agenda – Bilderbergers, Council on Foreign Relations, The Trilateral Commission, and the UN. Their family actually provided the land upon which the current UN headquarters is built. Blame people like that. The president is merely a puppet of people like this.

    • 0 avatar
      drivelikejehu

      For much of its history, China has been the richest country in the world. It has a massive population with tons of smart and hard-working people. Their current economic output is actually quite mediocre, considering the resources they have available. The growth rates owe to the fact that their economy had been almost completely suppressed by deranged socialists for several decades. Countries with high potential will always grow quickly when starting from a very low point (see Japan and W. Germany post-WW II).

      However, China’s state-interventionism is a major problem that will limit future growth and perpetuate poverty in non-favored areas. The simple fact is that free markets are always more efficient than government direction, as Marx fully acknowledged. Governments improve the economy to the extent they establish and enforce fair rules, so as to maintain financial and civic order. Any actions beyond that point are necessarily harmful to economic efficiency.

      Of course, in practice governments have to do more than this bare minimum. The mistake they are making, in the US, China, and elsewhere, is to confer benefits on favored groups by distorting the private economy. Handing out cash to poor people, for instance, does not do much to distort the economy. Funding non-viable businesses, on the other hand, results in a mis-allocation of capital that makes everyone worse off, except for the lucky recipients of the cash (who were undoubtedly well-off to begin with).

      Also note that Adam Smith was not a free market fundamentalist, or anything close to it. In fact, he supported British laws that restricted the economic activities of the colonies, to keep them dependent on Britain.

    • 0 avatar
      jandrews

      @ Conslaw:

      The easiest way to describe the Chinese economy is the way Fareed Zakaria did it: “Any number becomes a large number when multiplied by 1.3 billion”.

      As for how they do it, so far that’s pretty much come down to having the single party government act as an investment house for the nation’s combined wealth alongside policy that incentivizes setting up shop for menial, hard, or dangerous labor.

      An essentially unlimited labor pool and complete disregard for human rights goes a long way toward economic growth.

  • avatar
    E46M3_333

    I could have told you these plans were destined to fail when Obama first gave his speeches. Japan has led the world in battery technology for the last 30+ years. They generate most of their electricity from nuclear power and are frightfully dependent on foreign oil. If EVs made any sense at all, Japan would have them by now.

  • avatar
    vanpressburg

    Great article !

  • avatar
    rudiger

    I guess the Chevy Volt is a debacle because sales haven’t lived up to expectations.

    The first generation Toyota Prius didn’t sell too well, either. I suppose it’s a debacle, too.

  • avatar
    Acd

    Looks like Barry’s crystal ball was on the fritz that day three years ago.

    Hmmm, I wonder if any of his other predictions have been off the mark like this one?

  • avatar
    Big Al from Oz

    If you require government money to create an industry the odds are it will fail. Did the US give a rebate back when someone bought a Model T?

    The money that is wasted on CNG vehicles, hybrids, EVs, Solar, Wind and all of the other “feel good” technologies would be better spent improving and expanding existing and profitable markets ie, gas supply to domestic housing and commercial/industrial complexes.

    This will also have an impact on CO2 and NOx emissions.

    Some people are talking about government involvement in industry. The Germans don’t have as much involvement as one would think. Since Re-unification the Germans have actually been liberalising their economy.

    Europe and Japan have significant government involvement because of the rebuilding after WWII. Their governments were the only institutions able to manage the rebuilding programs. The US, Canada, Australia didn’t require this rebuilding.

    Prior to WWII most European industry didn’t have government involvement to the extent they do now.

  • avatar
    Glen.H

    Just an aside here, Reuters reported this as being on the “taxpayers dime”. It should be read as “borrowings from the savings of Japanese housewives, Brazilian car workers and Chinese industrialists”. U.S taxpayers have not been paying enough taxes to fund both your military expenses and domestic costs for years.

  • avatar
    nonce

    > the Detroit News, usually very sympathetic to government programs

    lolwut?


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