South Korean LG Chem will finally begin commercial battery production at its Holland , Michigan, in July, Reuters says.  The batteries will initially help power GM’s Volt.

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.” The plant made headlines for doing nothing.

Half of the plant’s $300 million price was funded by the tax payer, courtesy of a $150 million government grant. 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.

The has not started production because “demand for electric vehicles such as the Volt has been lower than expected,” LG Chem told Reuters.

How many batteries will be built is unknown, but “volume is expected to consistently increase depending on the electric vehicle market and securing additional contracts,” LG Chem promises.

President Obama joined the debate about Michigan’s “right-to-work” law. “What they’re really talking about is giving you the right to work for less money,” Obama told workers during a visit to the Daimler Detroit Diesel plant in Redford, Michigan. He forgot to mention three important items.

• The right-to-work law will put unemployed people in Michigan back to work. Given the choice, investments into new factories prefer right-to-work states.
• Under the two-class system negotiated by the UAW, new hires already make much less money.
• In a right-to-work state, workers have the right yo work for more money, because they cannot be forced to pay union dues.

According to Reuters, “the new laws are not expected to have much immediate impact because existing union contracts would be preserved, they could, over time, further weaken the UAW, which has already seen its influence wane in negotiating with the major automakers.”

This is going to be interesting: Michigan lawmakers are expected to introduce right-to-work legislation today,  Michigan’s Republican Governor Rick Snyder is for it, the UAW, headquartered in Detroit, Michigan is fiercely against it.

Hundreds of unionized workers converged on the state capital of Lansing today to voice (loudly) their opposition against the law. Reuters already talks about a repeat of Wisconsin where a similar law in 2011 “sparked massive protests and unsuccessful efforts to recall Republican Governor Scott Walker.”

Michigan had the fifth highest percentage of workers in the country who are union members in 2011, according to the U.S. Bureau of Labor Statistics.

The Michigan state House of Representatives yesterday voted unanimously to repeal its so-called driver responsibility fee program, an unpopular tax on traffic citations. State Representative Bettie C. Scott (D-Detroit) was the primary sponsor of legislation that will end most of the fees by January 1, 2012 and, before then, cut the amount motorists owe by half.

“Obviously we must do what it takes to keep our roads safe for all travelers, but driver responsibility fees place an onerous and unnecessary financial burden on too many Michigan drivers,” Scott said in a statement. “The Driver Responsibility Act is flawed legislation that has failed the test of time. It has unfairly penalized our hard-working residents during one of the worst financial crises we’ve ever seen.”

Since 2004, Michigan has used the program to impose a tax of $300 to $2000 on certain driving offenses, plus an annual tax of $100 to $500 a year for anyone with more than seven points on his license. A package of four separate bills would remove the point tax and fees for everything except driving while intoxicated, failure to stop at an accident, eluding a police officer, reckless driving or any offense causing death or serious bodily injury.

Between 2004 and 2009, the state has assessed about $800 million in fees, only $400 million of which was actually paid. The National Motorists Association strongly opposed the fee program, pointing out that the state has some of the worst speed traps in the country, generating fees by setting speed limits that do not match the flow of traffic. The Michigan District Judges Association and the National Association for the Advancement of Colored People have also strongly endorsed repeal of the fees.

“People are frustrated with the ridiculous amount of money charged for minor infractions and penalties,” said state Representative Eileen Kowall (R-White Lake), sponsor of another bill in the repeal package. “These bills will help decrease the financial burden on drivers who already are being punished with large fines and court costs.”

If passed by the state Senate and signed by the governor, the Michigan repeal will become law. In 2007, the state of Virginia introduced a similar speeding ticket tax, called an “abuser fee” bill, which generated a storm of negative publicity. The legislature had no choice but to repeal the program in 2008, offering a full refund to those who paid.

A copy of House Bill 4098, as passed by the House, is available in a 50k PDF file at the source link below.

Source: House Bill 4098 (Michigan General Assembly, 9/15/2010)

[Courtesy:Thenewspaper.com]

Ford have decided that battery development is a key job which needs to be developed in-house. Which is bad news for Delphi, since they currently make Ford’s batteries for them. Just what they needed as they were coming out of bankruptcy. This plant will supply batteries for the Transit Connect EV, the Focus EV and hybrid versions. Ford are choosing to manufacture Lithium Ion batteries instead of Nickel Metal hydride ones. Not only are they smaller and lighter, they can be tuned to increase power to further acceleration. It’s nice to see that Ford are creating new jobs, but as with Nissan and their Leaf production in Tennessee, the amount of tax money per job is phenomenally high. Is it worth it?

The Freep is reporting that GM’s Renaissance Center headquarters could be at risk if so-called “retention tax credits” aren’t amended. GM is consolidating more of its workforce at its Warren Technology Center, and 1,500 of the RenCen’s 4,000 GM workers are reportedly making the move out of downtown. The remaining 2,500 workers would stay only if a Michigan Economic Growth Authority “retention” tax credit makes it worthwhile. The necessary amendments to this tax credit have been made, but MEGA still has to approve the package. A memo to the Growth Authority reveals the stakes:

2,500 is the maximum that they can also take for this portion of the credit. General Motors has submitted an application stating that the headquarters is at risk without this credit.

GM’s CEO Fritz Henderson adds:

We’ll have some people move from the Renaissance Center to the Warren Tech Center, but the Renaissance Center will still maintain a very sizable presence and this will be our headquarters

As long as the state of Michigan makes it worth GM’s while, anyway. But Michigan is hardly united in its desire to prevent the building named for unflagging optimism in Detroit’s future from becoming an ironically-named, abandoned husk. Warren Mayor Jim Fout tells MLive:

Let them keep Fritz Henderson and his secretary and his board down at the Renaissance Center and they can call that their world headquarters. But ultimately, everything else is coming to Warren. It makes no sense for them to stay at the Ren Cen. If they are going to survive, they are going to have to consolidate.

Car czarlet Steve Rattner recently laid into GM’s culture of executive arrogance, pointing out that top executives had a private elevator that whisked them from their private garages to the top of the RenCen, insulating them from their firm’s realities. Imagine what might happen if top executives were further insulated by being the only GM employees to occupy the RenCen. The mind boggles.

The recent revelation that congresspeople have been successful in coercing GM to rescind dealer closures in their districts, has the rest of our elected representatives (not to mention GM itself) sitting up and taking notice. In a conference call with Michigan’s congressional delegation, Fritz Henderson said GM was close to a deal which would restore a number of “mistakenly” closed dealerships. But GM hasn’t met with rejected dealers in weeks, and the Committee To Restore Dealer Rights is unaware of any such agreement. “[Henderson] was very vague, and the plan sounded inadequate to me,” Michigan Republican Hoekstra tells Automotive News [sub]. “He explained, for instance, that they might reopen some franchises if they found errors, but he didn’t say what those errors might be.” Henderson also rejected the dealer demand for compensation of $3,000 per vehicle sold in 2006, 2007 and 2008, further supporting suspicions that GM doesn’t have a deal at all. So what is happening?

I think GM is telling Congress: ‘We’re close to a deal, you don’t have to do anything.’ But GM isn’t doing anything. They’re just playing out the string because rejected dealers can’t hold out that long

Hoekstra may well be right. Without a compensation offer on the table, government-ordered arbitration between GM and the rejected dealers won’t go anywhere. More importantly, Henderson’s use of the term “mistakenly closed” illustrates how much pressure GM has been under from representatives to reopen dealers in their districts. If a number have already succeeded in getting GM to re-open their dealers, it’s only a matter of time before the floodgates open. Remember, GM only accepted arbitration because a bill was working through congress that would have restored all the culled dealer franchises. If arbitration is failing, GM’s only option is to hold off congressional interference for as long as possible, in hopes of as many dealers croaking as possible. And now that everyone knows some representatives have succeeded in rescuing their campaign donating home-district dealers, the rush will be on. All of which further pits the legislative against the executive branch, raising the specter of more, not less, government interference in GM and Chrysler.