Company set to receive state subsidies fails to deliver again

A company chosen by state officials to receive subsidies has again fallen short of delivering an expected economic impact.

LG Energy, formerly LG Chem Michigan, announced in July that it is slowing construction on its Delta Township plant, according to Crain’s Business Detroit. The announcement came eight months after the company laid off workers from its Holland plant, for which the company received hundreds of millions of dollars from taxpayer funds in the early 2010s.

Plans for the Delta Township facility were ambitious. In 2022, LG Energy Solutions announced a partnership with General Motors to construct an electric vehicle battery plant west of Lansing. The joint venture, Ultium Cells, said the plant would create up to 1,700 jobs.

Ultium Cells was awarded $600 million in direct cash subsidies for the Delta Township facility, with an additional $66.1 million for site preparation, according to James Hohman, director of fiscal policy at the Mackinac Center for Public Policy. The company also received varied tax abatements and a special deal with the city of Lansing’s utility.

Ultium Cells received $467.8 million of the $600 million in cash offered, as well as $49.6 million of the $66.1 million in site preparation money, as mentioned in the Michigan Strategic Fund’s annual report for 2023, published March 15, 2024.

There are no recent updates on whether the state distributed additional money. Hohman told Michigan Capitol Confidential that other reports about whether and how much money was disbursed are out-of-date. One of the more recent reports was issued in September 2023.

CapCon reported in November 2023 that LG Energy’s Holland EV battery plant laid off 170 workers after being awarded $189 million.

A Zeeland-based economic agency projected in 2010 that within three years, LG Chem would spend $330 million on the facility and create 400 jobs at the Holland site, according to a contemporaneous MLive report. MLive reported that the plant would receive $150 million in a federal grant and $150 million in state tax breaks. Federal investigators found in a 2012 audit that the company had hired fewer than half the projected number of workers and paid some of them to play cards, watch movies and do volunteer work.

LG Energy hasn’t responded to a request for comment.

Quentin L. Messer Jr., chief executive officer of Michigan Economic Development Corporation, did not respond to an emailed request for comment.