Workers At LG Chem Plant On Furlough As Green Jobs Wilt

Derek Kreindler
by Derek Kreindler

Workers at an LG Chem plant in Holland, Michigan have already been put on furlough before a single battery has come off the line. Workers have three weeks of paid “work”, and one week off unpaid at the $300 million plant.

As early as 2010, the Holland plant was touted by President Obama as the return of manufacturing jobs to America, and green ones at that. The facility was estimated have produced 15,000 batteries a year and added hundreds of jobs. So far, 200 workers are being paid to do nothing.

The Department of Energy provided a $151 million Recovery Act grant for the factory, while LG received property tax breaks worth $50 million over 15 years (contingent on reaching 300 workers over 5 years), and $2.5 million in other tax breaks. While the plant’s largest customer was supposed to be the Chevrolet Volt, all of its batteries have come from South Korea so far.

Target 8, A local NBC affiliate interviewed plant employee Nicole Merryman, who said that

“We were given assignments to go outside and clean; if we weren’t cleaning outside, we were cleaning inside. If there was nothing for us to do, we would study in the cafeteria, or we would sit and play cards, sit and read magazines,” said Merryman. “It’s really sad that all these people are sitting there and doing nothing, and it’s basically on taxpayer money.”

Worers placed on furlough are eligible to collect unemployment for that week, but that’s not the only government subsidy that is used to sustain LG Chem’s work force. Of the 200 employees at the plant, half are being paid via Recovery Act funds. 40 percent of the company’s $133 million expenditures have gone to foreign companies, mostly South Korean, according to Target 8. The station is also reporting other taxpayer-funded expenditures

A Target 8 analysis of federal records shows taxpayers spent $7 million to train workers and have paid more than $700,000 for workers’ health and dental insurance. There’s millions of dollars more at stake for LG Chem if it doesn’t keep hiring, or if its job numbers fall. The state approved a $25.2 million job-creation state tax credit over 15 years, and a battery cell state tax credit worth $100 million over 4 years. Both are tied to job creation. LG Chem has yet to file claims for that money, state officials said.

Workers haven’t produced anything since December, when production of test units of battery cells ended. Sluggish sales of the Volt are one possible culprit, though the plant hasn’t made any components for the Ford Focus EV either, as it was originally planned to do. One possibility is that the Holland plant will produce batteries for the second generation Chevrolet Volt, but even then, there are controversies over the technology being farmed out to LG Chem after it was developed with public funds. The next generation battery is due out in 2015 and is said to be 35 percent cheaper than what’s out there today.

Right now, we are left with a $300 million mystery. The subsidization of unused capacity is puzzling, to say the least, not to mention a horribly inefficient use of stimulus funds. The grants given out by the government are contingent on hiring more workers, but if nothing is being produced, how can LG Chem justify keeping the plant open, even with workers (half of whom are paid via Recovery Act funds) on furlough?

At least there’s one upshot to the whole ordeal. The report by Target 8 has led to an investigation into the LG Chem plant by the Recovery Accountability and Transparency Board, a government agency responsible for overseeing the stimulus funds.

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