LG Chem: Taxpayer money not wasted

HOLLAND, Mich. (WOOD) - LG Chem says it has not wasted taxpayer money and promised to repay the federal government if it had billed it for "idle time" spent by its workers, the company said in a statement made in response to a Target 8 investigation.

The company has refused to comment to Target 8 but released a statement to the Grand Rapids Business Journal, which published a report on Tuesday.

A Target 8 investigation revealed last week that workers at the Holland plant had little or nothing to do, and that some were spending time playing card games and board games, or watching movies. Many were leaving the plant on company time to help work at area non-profit agencies.

The Korea-based company received a $151 million U.S Department of Energy grant as part of the federal stimulus program to build the $300 million plant. The company's reports to the federal government show that 100 of its 200 employees have been funded by federal "recovery funds."

The plant was expected to employ 300 workers and turn out 15 million battery cells each year, with production starting early this year. But with sluggish sales of the Chevy Volt, the plant has produced only test cells.

LG Chem's statement doesn't appear to address allegations of card games, board games and movies. However, it did say that employees "have engaged in team-building activities and some labor donation to aid nonprofit groups in the community.”

LG Chem told the Business Journal that its workers continue to report to work because the company "feels a duty to take care of the people and to keep them on the team, so they can be ready for production."

However, workers have told Target 8 they haven't trained for months and that battery-making supplies were returned to Korea. Some have quit and some are looking for work.

"The company will not use (Department of Energy) grant money to pay for any idle time," LG Chem said in the statement to the Journal. "It will review prior billings, and if any has been used, then that money will be refunded to the DOE.”

LG Chem also said it has extended furloughs -- workers taking a week off without pay every fourth week -- since late August.

"LG Chem has the strongest motivation to operate the plant, because it has invested more than 50 percent, over $150 million, of the cost to construct the facility, so it will utilize the plant when the time is right,” according to the statement to the Journal.

LG Chem has a lot to lose if it doesn't.

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.

A Renewable Energy Renaissance Zone will allow LG Chem to operate free of property taxes for 15 years -- if it reaches 300 employees within 5 years. That's another $48.5 million.