Two years after a groundbreaking ceremony attended by President Obama, a Michigan plant built with $150 million in taxpayer funds to make batteries for hybrid vehicles is putting workers on furlough — before a single battery has been produced.
Employees at the Compact Power manufacturing plant in Holland, Mich., are working only three weeks a month due to a lack of demand for lithium-ion cells.
The plant — run by LG Chem, a South Korean company — was opened in July 2010 to make batteries for the Chevrolet Volt, a plug-in hybrid vehicle built by GM. But the car has seen sluggish sales, despite a $7,500 federal tax credit for each vehicle, and fewer than 25,000 Volts had been sold by September. Production of the car has been plagued by several plant shutdowns.
“Considering the lack of demand for electric vehicles, despite billions of dollars from the Obama administration that were supposed to stimulate it, it’s not surprising what has happened with LG Chem,” Paul Chesser, an associate fellow with the National Legal and Policy Center, told Fox News.
“Just because a ton of money is poured into a product does not mean that people will buy it.”
The $300 million plant was supposed to produce 15,000 batteries per year and create hundreds of new jobs. But so far just 200 workers are employed at the plant, and batteries for the Volts are instead being made by an LG Chem plant in South Korea.
The Michigan plant has spent the past two years building infrastructure and conducting pre-production “test runs,” Fox reported.
The factory was partly funded by a $150 million grant from the U.S. Energy Department, and received tax breaks from the local government worth nearly $50 million over 15 years in property taxes and $2.5 million a year in business taxes.
Obama told workers at the groundbreaking ceremony: “You are leading the way in showing how manufacturing jobs are coming right back here to the United States.”
But former congressman and 2012 Senate candidate Pete Hoekstra, whose House district included Holland, said the stimulus plan that provided funds for the plant “was designed to create jobs in the short term. It doesn’t exactly meet the criteria of stimulus for me.”
And Kelsey Knight, a spokeswoman for the Mitt Romney presidential campaign in Michigan, said in a statement reported by the Holland Sentinel that “a factory that produces nothing and furloughs workers is a symbol of where American is going under [Obama’s] failed policies.”
Footnote: An LG Chem spokesman said workers who are on furloughs one week a month are eligible to collect unemployment benefits for that week.