The LG Chem advanced battery plant east of Holland was supposed to employ up to 300.
GRAND RAPIDS, MI — Frustrated by wasted taxpayer dollars and unrealistic expectations of the beleaguered LG Chem battery program in his home district, U.S. Rep. Bill Huizenga demanded the government audit more stimulus-funded manufacturing projects.
A scathing audit by the U.S. Department of Energy's Office of Inspector General found that despite spending a majority of its $151 million stimulus grant, LG Chem Michigan in Holland had yet to produce a battery for use in a commercial electric cars. The Inspector General's report also caused LG Chem to refund the government $842,000 paid to employees to volunteer, watch movies and play games.
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Huizenga, R-Zeeland, said
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"I want their Inspector General, moving forward, to do the same kind of audit in all these facilities," Huizenga said Tuesday in an interview at the MLive Media Group hub in Grand Rapids. "They ought to. They owe it to the taxpayers.
"That is the minimal that can be asked by us, the taxpayers, to find out what's been happening with the money."
Huizenga was frustrated when he learned of the bumbling management and waste associated with the LG Chem project. Awarded a $151 million stimulus grant in February 2010, the LG Chem built a battery cell manufacturing plant in Holland. State and local governments also ceded LG Chem tax concessions to help in construction of the plant.
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Stopping short of placing blame, Huizenga said unrealistic expectations and parameters set out when President Barack Obama's administration struck the stimulus deal with LG Chem created the complications now plaguing the project. The federal government over-estimated the demand and production of electric cars, putting LG Chem "way out ahead of the market," Huizenga said.
Huizenga,
, said taxpayer-funded projects that are out of touch with the marketplace have become a pattern. The administration has focused on ribbon cuttings instead of sensible projects and has thrown billions of dollars "out the window," Huizenga said.
"That is a frustration as a tax payer. That is a frustration as a policy maker," he said. "We have continually seen both state and federal programs that have just tried to get way out in front of the marketplace and create a marketplace out of whole cloth.
"And the simple fact is, the economics don't work, and it's just not ready."
Huizenga said he and other West Michigan congressmen were "kind of kept in the dark" concerning LG Chem and the problems with the project. He requested a tour of the facility, and while initially receptive to the idea, LG Chem never showed him the facilities. Plans for the tour broke down about the same time the company realized it would not meet the production goals of the stimulus project, Huizenga figured.
There has also been an "interesting relationship" between Holland battery manufacturers, the Obama administration and West Michigan congressmen, Huizenga said. He mentioned former U.S. Rep. Pete Hoekstra's claim that during a speech at the groundbreaking ceremony for LG Chem,
. Huizenga also said
to a presidential visit to Johnson Controls.
Huizenga said had the stimulus money been spent on research and development in the battery sector, taxpayers would have realized a better return. He credited LG Chem for attempting to keep their trained workforce productive and employed, but he chastised the company for not playing by the rules. Some employees were paid to volunteer at organizations like Habitat for Humanity.
"No matter how noble Habitat is, that's not what the stimulus dollars were for, so rightfully so, they are clawing back that portion of the wages," Huizenga said of LG Chem's refund of $842,000.
He did not believe LG Chem acted maliciously or attempted to defraud American taxpayers. He called the company a good manufacturer and a good partner.
Huizenga would not venture a prediction whether the battery industry in Holland would eventually be a success. Praising the area's skill in manufacturing and the state's expertise in making cars, Huizenga said the industry has an opportunity to flourish.
"If ever it's going to happen anywhere around the country, this is where it is going to happen," he said.
— Contact Aaron Aupperlee at aaupperl@mlive.com or (616) 430-4820. Follow him on Twitter at @tinynotebook.