Haveman Keeping Close Watch on LG Chem

Story first appeared on WoodTV10 Grand Rapids -

Holland battery maker repaid some federal funds

The US Department of Energy's $151 million federal grant for LG Chem wasn't all that lured the company to build their plant in Holland. There was also the lure of $125 million in state tax credits.

Those tax credits would be up to $25 million a year for four years - based on LG Chem's investment and job creation - and another $25 million over 15 years based on jobs.

Though the company has not yet filed for any tax credits -- and the state is not out any money yet -- the chair of the Michigan House Appropriations Committee said the state is keeping a close eye on the plant after a federal audit forced LG Chem to repay $842,000 in misused funds for workers who were playing cards and board games and volunteering in the community.

The audit was triggered by a Target 8 investigation.

It raised questions about whether taxpayers would ever benefit from the investment. The plant in Holland has yet to produce a battery for sale, in part because of sluggish sales for the Chevrolet Volt and because LG Chem didn't shift production from South Korea, as was expected.

"The feds are finding things out that we suspected but didn't know for sure, so certainly there's going to be added scrutiny," said Rep. Joe Haveman (R-Holland.) "Michigan taxpayers are not on the hook for it yet and have not been taken advantage of by this company. I don't want to lead people to believe we've lost their money without seeing the batteries produced and the jobs created."

In order to qualify for the biggest of the tax breaks, LG Chem must have 300 employees by the end of 2015. Currently, they employ about 150.