U.S. Grant Funded Workers' Play at LG Chem Factory

WASHINGTON—The Obama administration's electric car efforts took another hit on Wednesday after a federal inspection found a South Korean advanced battery maker never scaled up U.S. production despite receiving $142 million in federal grants.

A Holland, Mich., factory owned by LG Chem Ltd., part of LG Corp., was half-funded by a government grant and estimated to add some 440 jobs building battery cells for General Motors Co.'s Chevrolet Volt and other vehicles.

When demand for the plant's batteries didn't meet expectations, the company filled orders with cells made at a factory in South Korea, leaving the Michigan plant largely idle, according to the report by the Department of Energy's Inspector General, Gregory Friedman.

LG Chem said in a statement that production delays at the Michigan facility were "market-driven," adding that it is "developing specific plans for the start of production." The company said it regretted that it applied for reimbursement for "employment costs that were not allowed" under its U.S. grant.

The inspector general said that to avoid layoffs at the factory LG Chem paid idle workers $1.6 million in the third quarter of last year, about half of which was covered by its U.S. grant, even though there was nothing for them to do. The workers played board games, watched movies, and volunteered at local animal shelters during regular work hours, Mr. Friedman said. LG Chem has since paid back the government's share of those charges.

"Until the shift in production takes place or some alternative use for the plant is developed, U.S. taxpayers will receive little direct benefit from a plant for which they provided up to half of the funding," Mr. Friedman said in his report.

after a federal inspection found a [fill in the blank] never scaled up U.S. production despite receiving $142 million in federal grants.

Well, surprise, surprise, surprise! When I attended college back in the Carter administration, I couldn't help but notice classmates who attended college on government grants all tended to drive new cars. Me? I drove a clunker. No federal grants for me because my parents were rich. Actually, they weren't by any stretch. We were middle or even lower middle class. But I came from an intact family where both parents worked so couldn't qualify.

The grant sucking jag-offs were driving around in new cars, taking fluff classes and were just barely over the minimum number of credits to qualify and thus keep the grant money flowing. Part time jobs, forget it! That would interfere with their party and social life. Occasionally, one of them might get handed a fluffy work study job which would give them maximum pay for minimum work.

Meanwhile, my brothers and sister and I were expected to cobble together whatever we could to pay our own expenses. We took real classes and would only take the minimum number of credits when we had a heavy enough work schedule due to extra job opportunities. The rest of the time, we took as many credits as we could handle when we could only find one or two part-time jobs. Other than my sister (who was exceptionally smart), we all needed more than four years to graduate. Meanwhile, the grant suckers could do it in four with minimal effort if they were so motivated. Most of the time, they weren't and worked the system to extend their time as a perpetual students as long as possible. Sometimes, they piled up fluffy degrees and parlayed them into useless grant-funded jobs where they continue to work off the system even today. More often, there was little motivation to even finish college because so much grant money was available.

The company built three of five planned production lines, but underestimated labor costs—apparently unaware of a requirement that it pay prevailing wages—and no longer has enough grant money to complete production.

This is BS. You don't get a deal down the line without realizing that fed money is prevailing wage or Davis Bacon. Based on this alone, I believe this was a back room deal.

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