The Rant – Not Solyndra-sized But Another Stimulus Black Eye
Solyndra was the first boondoggle of the stimulus. It wasn’t the biggest but it was the first and it demonstrated beyond a shadow of a doubt why government and business differ–business has a bottom line that must be in the black, government just throws money at things and has no bottom line.
The latest, I think it is No. 8 on the disaster list for the government’s stimulus plans, is Compact Power in Holland, Michigan. Compact Power (CP) is a subsidiary of LG Chem and is now furloughing employees one week each month just 27 months after its grand opening.
The plant, which is a $300 million facility, was designed to produce 15,000 batteries per year. But the catch is, while jobs were to be created and weren’t, this is a South Korean company, not American. In addition to the direct cash from the Department of Energy, the Korean company also received local tax breaks.
But the fact the plant has never sold a battery, didn’t stop Oh-Mama Obama from popping up at the groundbreaking ceremony.
As part of his “Hope and Change” program he said, “You are leading the way in showing how manufacturing jobs are coming back to the United States. Our goal has never been to create a government program but to unleash private-sector growth. And we are seeing results.”
CP had nothing of substance when it received $150 million, courtesy of President Obama’s extravagance with your tax dollar. It opened in July, 2010, allegedly to make lithium-ion batteries to fill the demand from the President’s other big gamble, General Motors and its Volt. As an added benefit, CP was going to supply batteries for Ford Motors and its electric Focus.
Volt sales have been sizzling along at nearly eight per day, including fleet sales to gullible Obama-backers like General Electric. But the weak demand is trickling down to part suppliers for the shunned cars, including CP.
Paul Chesser, associate fellow with National Legal and Policy Center, told FoxNews.com, “Just because a ton of money is poured into a product by the government, despite billions of dollars that were supposed to stimulate, people just aren’t buying the product.”
No kidding? That’s a complete summation of why government should not be in business in any way, shape or form. Economic demand will mean businesses will fill that demand by producing what the consumer wants. Government mandates, even with rebates and other cash incentives, won’t do the job.
We are going down a path to economic destruction by forcing a green technology on America. Japan tried it and it failed. Spain tried it and failed.
Calling all politicians!!! Calling all politicians!!! Listen to a little secret. When it becomes economically viable to switch from fossil fuels to a more-friendly renewable energy base, business will make the switch on its own because the demand will then be there to assure a positive bottom line.
Politicians have to force issues to show the voters “We are doing something.” Voter apathy is telling them “STOP DOING IT!!!”
To date, CP not only got the $150 million from Energy, it received $50 million in property tax breaks from the state along with annual business tax deductions of $2.5 million. CP was quick to announce the furloughed employees will be eligible for unemployment compensation the time they are furloughed–no figures were available on what that is costing the other taxpayers.
The biggest problem with battery-powered cars is it was a technology that was tried and rejected more than 100 years ago. Government was using old technology and trying to pass it off as new.
For a bunch of smart people, we have a lot of dummies in Washington. Instead of giving away our money to achieve a program (even if it isn’t so labeled) how about asking that your Senators and Representative actually do something they are supposed to do–like pass a budget or ensure our embassies are properly protected or our borders are patrolled.
There are some concise, specific projects I could support to spend my tax dollars on.
“I have sworn on the altar of God eternal hostility to every form of tyranny over the mind of man.”–Thomas Jefferson
Content for today’s Rant came from FOXNews.com, Oct 8, 2012, “Plant that got $150M for Volt batteries furloughs workers”
Tags: com, Compact Power, company, CP, DOING, form, God, government, July, line, man, money, month, Obama, part, program, something, STOP, tax, technology
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A few errors in your article.
First, the plant didn’t have a “grand opening 27 months ago” it had a GROUND BREAKING ceremony 27 months ago. It does take time to build a 650,000 square foot factory, tool it up, train employees, and start production. They announced, before a single shovel broke dirt, that the plant wouldn’t be done until 2013, with quality assurance testing happening during Phase 1 in Q2 2012. That’s exactly what happened. The empolyees there now are simply producing test-runs and submitting them for QA.
Second, they are being furloughed one week a month. LG is paying them 3 weeks, and paying their benefits the week they are furloughed. That week they are eligible for unemployment, paid for by unemployment insurance that the employer (LG) pays for, NOT you or the government. It is fully funded, no taxpayer money.
Third, Volt sales thus far in 2012 have been significantly greater than 8 per day. YTD, Chevrolet has sold 17,270 units in North America. That’s 64 per day. And the Federal Government has purchased less than 200 Volts so far in all three model years of production. Total Volt fleet sales (government agencies, companies, organizations, rentals) have been 12%….about 2072 units, meaning nearly 15,200 YTD are in the driveways of private citizens.
Fourth, this isn’t a failure. It has not failed, has it? It hasn’t even started. The plant is to START supplying the Volt assembly line when it starts up again after retooling next week. Remember that retooling downtime? The one that caused an uproar? Well, thus far the Volt’s batteries have come from Korea. Now they will come from Michigan. Costs to GM will be lower, and the percentage of North American content will be significantly higher.
Lastly, the $150MM was in the form of loans. “Your money” isn’t gone until LG Chem/CP defaults on those loans. Otherwise, the loans will be repayed as agreed and “you” will have your money back in the Federal till. No reason to assume that will be the case. LG Chem invested a half billion of their own money here, and they are a financially strong and solvent company. The plant produces lithium ion battery cells, used in many, many products. The Volt battery pack is just one of them.
Next time, please do your homework Chicken Little.
How many of the Obama backed green energy companies have been successful and how many have failed? Government does know how to pick losers especially when they are spending our money.