LG Chem Michigan Has Little To Show After Spending Most Of $150M Federal Grant

 

 

 

” LG Chem Michigan, which received a $150-million federal grant in 2009 and more than $175 million in state and local tax relief, has not sold any battery cells to automakers, but has paid more than $1.6 million to workers who volunteered for animal shelters and charitable groups and watched movies and played video games or cards, according to a report an inspector general for the U.S. Department of Energy released today.

“We found that work performed under the grant to LG Chem Michigan had not been managed effectively,” wrote Gregory Friedman, the DOE inspector general. “Our review revealed that LG Chem Michigan inappropriately claimed and was reimbursed for labor charges incurred by a variety of supervisory and staff employees for activities that did not benefit the project.”

The department reimbursed the company for questionable labor costs incurred in the third quarter of 2012, but Friedman was unable to calculate the exact loss to the government because LG Chem Michigan did not track labor activities in detail.”

 

 

When it comes to scams , the most pertinent question to ask is ” Who Benefited ? ” 

Over a hundred million taxpayer dollars and no batteries yet ? 

” Other findings included that:

• The plant has not yet made battery cells that could be used in electric vehicles sold to the public.

• Only about 60% of the capacity agreed to when the grant was received was constructed, even though nearly $142 million of $151 million of the Energy Department’s share of the project’s funding had been spent.

• LG Chem Michigan officials estimated that the government would need to spend $22 million more to complete the five production lines called for in the agreement, an amount that would significantly exceed the remaining funds available.

• LG Chem Michigan had significantly underestimated labor costs.

• Documentation to support the grant indicated that production of battery cells would transition from LG Chem’s South Korean facility to the Michigan plant beginning in 2012, but that didn’t happen.

• Fewer than half of the 440 expected jobs had been created to support the project.”