July 12, 2010 10:16
U.S. President Barack Obama will attend a groundbreaking ceremony on Thursday for an LG Chem plant in Holland, Michigan, the company said Sunday. It is very unusual for an incumbent U.S. president to appear at such an event for a foreign company, and it is the first time for a Korean firm.
LG is investing US$300 million to build the plant which will produce batteries for electric vehicles. First-phase commercial production is scheduled to begin in the first half of 2012, and once completed in 2013 the plant will churn out lithium ion cells for 200,000 hybrid cars annually.
Experts say that Obama's decision to attend the event stems from the U.S. government's efforts to boost the industry for next-generation vehicles and batteries there. In his first speech to a joint session of Congress last year, Obama said, "New plug-in hybrids roll off our assembly lines, but they will run on batteries made in Korea."
He was apparently referring to LG Chem, which at the time had just signed a deal with GM to supply lithium ion cells for the Chevrolet Volt hybrid car. Dealt a heavy blow by the financial crisis, GM is pinning its hopes for recovery on the Volt. Ford, the No. 2 carmaker in the U.S., is also reportedly considering LG as a supplier for hybrid car batteries.
As part of efforts to revive the auto industry by bringing more green vehicles to the road, the U.S. government has lent considerable support to LG's Holland plant, including $151 million from a federal stimulus program. The Michigan state government also offered tax cuts worth $130 million, which together with the stimulus funds will almost offset LG's entire construction costs. The plant will help ease unemployment in the state by creating some 400 jobs, U.S. media reported.
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