Volt battery supplier forced to return $842K in DOE funds

LG (flickr LGEPR)

The bad news: a colorful scandal has emerged at another of the companies that received DOE funds to build EV-related components. The good news: this time the feds got wise to the hanky-panky in time, and are forcing the company to make amends.

In 2009, Korean battery maker LG Chem received a $150-million federal grant, as well as a package of tax incentives, to build a manufacturing plant in Holland, Michigan, to make battery cells for GM’s Volt and other vehicles. The Detroit Free Press reported Wednesday that a recent DOE investigation found a tawdry tale of much money spent and few batteries built.

Lower-than-expected demand for batteries left the Michigan production line idle, but the company left the plant’s workers on the payroll, performing “activities that did not benefit the project,” as DOE Inspector General Gregory Friedman drily put it. In fact, those activities included playing cards, watching movies, and volunteering at local animal shelters.

LG Chem has since reimbursed the government for its share of the dubious labor costs, some $842,000, and released an apologetic statement. However, the colorful case of the loafing laborers may not actually be the most serious problem. According to the Free Press, the DOE’s investigation also found that only about 60% of the plant’s planned capacity was constructed, although most of the federal money has been spent, and that LG Chem seriously underestimated the cost and time required to bring the facility into production. So far, it has produced only a few test cells.

 

Image: LGEPR (flickr)
Sources: Detroit Free Press, Wall Street Journal, Washington Times