Re-Volting waste 5

This is from Fox News:

A Michigan hybrid battery plant built with $150 million in taxpayer funds is putting workers on furlough before a single battery has been produced. …

Workers at the Compact Power manufacturing facilities in Holland, Mich., run by LG Chem, have been placed on rotating furloughs, working only three weeks per month based on lack of demand for lithium-ion cells.

The facility, which was opened in July 2010 with a groundbreaking attended by Obama, has yet to produce a single battery for the Chevrolet Volt, the troubled electric car from General Motors. The plant’s batteries also were intended to be used in Ford’s electric Focus.

Production of the taxpayer-subsidized Volt has been plagued by work stoppages, and the effect has trickled down to companies and plants that build parts for it – including the batteries.

“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. Just because a ton of money is poured into a product does not mean that people will buy it,” [said] Paul Chesser, an associate fellow with the National Legal and Policy Center.

Or, to put it another way – you can’t buck the market. As Friedrich Hayek says.

The 650,000-square-foot, $300 million facility was slated to produce 15,000 batteries per year, while creating hundreds of new jobs. But to date, only 200 workers are employed at the plant by by the South Korean company. Batteries for the Chevy Volts that have been produced have been made by an LG plant in South Korea.

The factory was partly funded by a $150 million grant from the U.S. Department of Energy. LG also received sizeable tax breaks from the local government, saving nearly $50 million in property taxes over 15 years and another $2.5 million annually in business taxes. Landing the factory was hailed as a coup when shovels first hit the ground.

“You are leading the way in showing how manufacturing jobs are coming right back here to the United States of America,” Obama told workers at the ground-breaking ceremony. …

Chesser said no amount of government subsidies can counter the practical problems posed by plug-in cars.

“Electric car batteries do not perform much better than they did 100 years ago,” he said. “Research has not conquered the battery storage issue, and therefore the electric transportation ‘stimulus’ did not boost the ‘technology of the future,’ but instead a century-old technology as far as performance and capability goes.”

He added that the LG Chem plant’s problems show that the unpopularity of electric cars despite heavy taxpayer subsidies has had more widespread negative effects than most realize.

“Billions of dollars were put into Volt research, and Ford received $5.9 billion in stimulus loans to retrofit plants to produce [electric vehicles],” Chesser said. “The battery companies like LG Chem that were supposed to service them have no customers to speak of. Their existence was solely based on access to taxpayer money.

“Had it been private investors rather than government bureaucrats making the decision, there either would have been a reality check about the industry, or only those who made individual decisions to invest would have lost their money, not taxpayers.”

Obama picks losers. As Mitt Romney says.


(Hat-tip for the Fox report, our reader and commenter Robert Yarber)


  • Well, the assertion that car batteries do not perform much better than they did 100 years ago is silly. There have been significant advances in lithium Ion technology and new, nickel-lanthanum hydride batteries provide equal performance to half the weight of the Lithium-ion ones. More efficient nano substrates.are coming on line and will increase battery performance even more.
    This is all utterly beside the point.
    The point is BATTERIES DO NOT PRODUCE ENERGY!!! To charge these batteries, no matter how efficient, still requires a power plant producing the energy… Coal, natural gas, nuclear, hydro… whatever. I have heard there is a net reduction in greenhouse gasses produced, I am skeptical of this, having seen opposing views.
    The rare earh metals used to produce not only these batteries, but also solar panels, wind turbines, compact fluorescent light bulbs etc… dysprosium, terbium, europium, neodymium and yttrium… China produces roughly 95% of these minerals. This is why US solar panel manufacturers simply cannot compete at present. This is why “Solyndra” was doomed to fail, even as it was still on the drawing board. China has the monopoly on crucial metals employed, therefore they can sell them at whatever price they wish… or not export them at all. China has us over a barrel if we depend on these rare earths in the short run.
    Solyndra was a scam from the start, because it was never possible to compete price-wise with Chinese solar cell producers. The difference in the cost of raw materials doomed the enterprise from the very beginning. I know this because I investigated hedging my energy stock portfolio with one or two “green” stocks… it is a complete crock. Worse, it is a National Security risk to make ourselves so dependant on one country, who is also our largest rival. O’bama is trying to sell us down the river in more ways than one. We need to obtain other sources of these metals before we become too dependant on them. Getting new mining operations on line takes years, yet I know of no grand initiatives coming from the current administration to solve this problem.

    • Jillian Becker

      Thanks for this very interesting comment, Steve.

      Have you seen our posts: Elements of future conflict (Feb.18 2012), and The uncleanness of greenness (Dec. 24 2011)? They are both about the rare earths question.

      We quote this in the Feb. 18 2012 post:

      “In 2010, the United States Geological Survey released a study which found that the United States had 13 million metric tons of rare earth elements.”

      • Yep, just like how we have a trillion barrels of recoverable oil! Our Dear Leader refuses to utilize these immense resources that would make America a global leader. I don’t think there’s ever been a more useless President in our history!

      • Nope, hadn’t seen those/I’m a newbie. I knew the US had some, but didn’t have the estimates. That will be yet one more thing for President Romney to encourage the private sector to go after. Thanks Jillian;-)

  • liz

    Which proves what losers Obama and co. are. Unbelievable waste everywhere you look – of tax money, unused resources, human lives. Talk about waking up from a nightmare – that will be the day he loses the election!