Holland charged up for electric cars

July 19, 2010
| By Pete Daly |
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HOLLAND — With much of the world watching — mainly because President Barack Obama was there — ground was broken last week on the new $303 million LG Chem Ltd. lithium-ion battery manufacturing plant in Holland.

Adding to the excitement was late word last week on two more orders for the plant’s production, from Ford Motor Co. and Eaton Corp.

The 650,000-square-foot plant, which will be occupied by LG Chem’s wholly owned Michigan subsidiary, Compact Power Inc. of Troy, is already scheduled to supply battery cells for the Chevrolet Volt electric car.

Compact Power is investing $151 million in the plant, along with a matching grant it received from the U.S. Department of Energy under the Recovery Act Award for Electric Drive Vehicle Battery and Component Manufacturing Initiative. A White House announcement during the groundbreaking indicated that the plant is expected to employ about 450 people by 2013.

The Compact Power site is located on 120 acres near South Waverly Road and East 48th Street, less than two miles from the new Johnson Controls battery plant under construction, which received an even larger federal stimulus matching grant to support production of electric and hybrid electric cars.

According to the Lakeshore Advantage economic development organization, the Compact Power plant will produce enough cells for 50,000 to 200,000 vehicle battery packs. LG Chem said it expects the plant to be fully operational some time in 2012.

In addition to federal incentives, LG Chem received an incentive package from the state of Michigan, which included a $100 million advanced battery cell tax credit, a 15-year job-creation tax credit worth $25.2 million, a Renaissance Zone designation that was approved by the city of Holland and job-training assistance. Gov. Jennifer Granholm said previously that other states and countries were competing to be the site for the new plant.

LG Chem Ltd. is the largest chemical and rechargeable battery maker in Korea, with 2009 revenue of $13.6 billion.

Greg Robinson, a Holland assistant city manager, said the plant will “basically (pay) no taxes” for several years, except for debt-related millage.

At the groundbreaking ceremonies, Peter Bahn-Suk Kim, vice chairman and CEO of LG Chem Ltd., said it was “a special day for us.” He predicted the plant will be “helping lead the way toward the electrification of vehicles.”

Granholm, who also was in attendance, said Michigan “is rapidly becoming a global center for advanced battery research, development and manufacturing,” and the groundbreaking in Holland “marks another important milestone in the diversification of Michigan’s economy.”

A posting on the official White House blog during the event noted that “the plant is yet another piece of the puzzle for turning electric vehicles from a dream that many presumed dead into a reality that we will all one day take for granted. The plant is the ninth of nine new advanced battery factories to start construction as a result of the $2.4 billion in Recovery Act advanced battery and electric vehicle awards the President announced last August.”

During the groundbreaking came the announcement that Eaton Corp., a major global producer of power trains for heavy trucks, had selected Compact Power Inc. to provide batteries for certain future Eaton hybrid-electric drive systems.

In the construction of the new manufacturing facility, Compact Power will incorporate power management technology from Eaton, according to an Eaton news release.

Eaton’s hybrid-electric vehicle business is located at the company’s Vehicle Group headquarters in Charleston Township near Kalamazoo. Engineering, development and testing of hybrid systems is also done at Eaton facilities in Marshall and Southfield.

Eaton hybrid-electric, plug-in hybrid electric and two hybrid hydraulic power systems are available or in development on truck models including DAF, Freightliner, Ford, International, Iveco, Kenworth, Mercedes-Benz and Peterbilt, and on bus models from BCI, Foton, Heng Tong, JNP, King Long, Shen Long, Solaris, Yutong and Zhongtong. Eaton hybrid power systems have more than 50 million miles of service around the world.

Earlier in the week, Ford Motor Co. announced it had chosen Compact Power to supply battery packs for an electric version of the Ford Focus that goes on sale next year.

Initially, the battery cells will be made by LG Chem in South Korea and shipped to the U.S., where Compact Power will assemble them into packs. Once the Holland factory is producing the cells, the cells and packs for the Focus will be produced entirely in the U.S., according to Ford.

Production of the Ford Focus electric vehicles will begin in southeast Michigan next year. The car has a targeted full-charge range of up to 100 miles, with no tailpipe emissions. Ford plans to introduce five new electrified vehicles by 2012 in the U.S., with the others being the Transit Connect Electric, two next-generation hybrid electric vehicles and a plug-in hybrid electric.

The general contractor on construction of the new Compact Power factory in Holland is Roncelli Inc. of Sterling Heights.

Hank Riberas, a spokesperson for Roncelli, said the company anticipates 18 to 24 months for completion of the plant. He said Roncelli has had prior experience in construction of industrial facilities for development of batteries for electric drive vehicles.

Roncelli is ranked the fifth-largest general contractor in Michigan and has been in business since 1966. Several hundred workers will be required for the Compact Power project, according to Riberas.

City officials in Holland are elated with their new electric vehicle battery business.

“We have two of the world’s most recognized companies in this field within a mile and a half of each other within our city. We feel extremely fortunate for that,” said Robinson.

“We’re hoping to build on this and really make Holland a model community for electric battery-powered vehicles,” he added.

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