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LG Chem has won the battery contract to produce battery cells for the Chevy Volt. The lithium power cells, developed by LG subsidiary Compact Power, are similar to the cells shown here. While the cells are made overseas, GM will manufacture the battery packs domestically in Michigan.  (Source: EV World)
GM makes big battery announcements at NAIAS 2009

GM finally resolved its battery quandary, announcing at the North American International Auto Show this week that it was selecting Korean battery maker LG Chem's batteries for the first generation of Chevy Volt.  The decision puts to rest months of uncertainty between LG Chem and its competitor for the contract, a team of A123Systems Inc. of Massachusetts and German auto supplier Continental (formerly part of Siemens).  LG Chem is teamed with its Troy, MI-based subsidiary, Compact Power, which helped design the cells.

While the cells will be produced overseas, the Volt's battery packs will be assembled in Michigan.  The batteries will likely be produced in a retooled midsize facility.  As automotive assembly tooling is not very applicable to manufacturing the packs, they will likely need a freshly tooled line.  The tooling cost to GM to achieve a volume of hundreds of thousands of packs could be $1B USD or more, according to a conversation DailyTech had with GM representatives.

GM's representatives said the decision to pick LG Chem over A123 was simple business, and that GM will continue to support A123's growth and development, calling the company a key business partner.  According to these representatives, the key reason why A123 was not selected was the company's inability to hit mass-production scales by GM's 2010 launch date for the Chevy Volt.

Bob Lutz, GM's vocal vice chairman, stated, "A123 is still sort of a startup, they're still ramping up, and A123 has been specializing mostly in ...cylindrical cells, which are good with power tools and stuff. What we need here is prismatic, which is flat cells. And LG Chem is just farther along."

He continues, "And this is one of the things why we say, if we're serious about the electrification of the automobile, as part of the national energy policy we do need government support for advanced battery development, which of course Japan has... LG Chem has massive support from the Korean government in terms of a whole research campus was paid for by the Korean government because Korea recognizes that advanced battery technology is a key component of the country's competitiveness."

Prabhakar Patil, Compact Power's CEO, had no harsh words for his company's competitor, stating, "It's a business decision.  Some people try to make it into an emotional issue but it really isn't. It's driven by the volume.  The bigger question is actually infrastructure. The labor content in the cell is relatively low. So as a result, there is flexibility. But in order to make that kind of an investment, not only for LG Chem but for suppliers for materials, etcetera, that's a significant level of investment and therefore you need to have enough of a business proposition, sustainable business, and of course infrastructure."

He comments that the U.S. currently does not have the infrastructure necessary to support internal cell production, but is moving toward such a manufacturing base.  He comments, "That's something that is evolving and I have to give state of Michigan a lot of credit for what they are trying to do to support that.  That's something we continue to evaluate and when the time is right we are open."

Competitor A123 currently manufactures its lithium ion battery cells in China, but it has applied for federal grant money to build a plant in southeast Michigan.  It hopes that bringing its production to the U.S. and building a large capacity will help it win a next generation Chevy Volt battery contract.

Ultimately, much of the jobs resulting from GM's final battery plan will be created in the U.S. as one of the most intensive parts of manufacturing battery stacks, is assembling cells, their cooling equipment, and other necessary equipment together into a finished product.

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RE: Sad
By foolsgambit11 on 1/14/2009 4:45:32 PM , Rating: 1
Considering that these "cheapass Americans" who could afford these products are already paying 25%+ in federal income taxes to support, above all things, entitlement programs - why exactly would they want to pay MORE money out of pocket to support these types of products when the workers at these plants are getting $60+/hr to sweet floors?
I never claimed to have an answer. I was just pointing out that the problem can be viewed from multiple angles. Yet another angle to view the problem from could be to blame the government. But not how you'd like to blame it. You could blame the government's free trade policy. Without free trade agreements, we could place import duties on foreign products so that products from Korea or Singapore cost the same as similar products made in America. That was the old way of doing things, and it 'worked'. (I personally like the idea of free trade - but I also like the idea of the free movement of labor.)

By the way, workers don't get $60/hr to sweep floors; you're misunderstanding labor costs versus wages. But, anyway, I would say the problem with the U.S. tax structure isn't the percent of income spent on taxes, but rather the lack of benefits generated by those expenditures.

The cost-benefit analysis would be perceived as much better, for instance, if we moved to a nationalized health care system. We're currently all paying for health insurance for the most expensive people to care for. The addition of the millions of healthy people in America to a national health care program would decrease average costs per person, and would give everybody a sense of getting something for the money they put in. And it wouldn't cost that much more - the additional taxes would be less than current insurance costs.

Additional cost savings in government could be achieved by cutting Defense's budget by 25%, with the possibility of further cuts. The total military defense budget for 2009 is roughly $650 billion - plus the costs of Iraq and Afghanistan. The average individual (or married filing jointly), assuming all savings went to their taxes, would get a $1000 (or $2000 if married filing jointly) tax rebate every year from a 25% cut in defense spending. That's twice the stimulus proposed in Obama's one-time stimulus package.

We could increase sales tax and excise taxes (consumption taxes) in place of income taxes - this would ensure that the tax burden was more equitable, since it was based on how much you spend. Excise taxes could also decrease the relative difference between foreign and domestic product prices (a $25,000 US-made car costs 25% more than a $20,000 foreign car, let's say. If you put a $5000 excise tax on both, then the $30,000 US car is only 20% more than the $25,000 foreign one.) The down side is that consumption taxes have negative economic effects, by discouraging consumer spending.

Damn that industrial revolution that helped increase the standard of living for everyone in the United States. How dare those Americans refuse to be slave labor so you can afford a better car while not working as hard!
I think you may have forgotten your history. The industrial revolution didn't do much to increase the standard of living for everyone in the United States. Unionization did that. That same unionization you curse in your first paragraph. I'm not saying unions are perfect (far from it), but they have done a lot of good when it comes to raising workers' compensation standards.

RE: Sad
By Spuke on 1/14/2009 5:08:27 PM , Rating: 2
but they have done a lot of good when it comes to raising workers' compensation standards in the past .
Fixed that for you.

RE: Sad
By Alexvrb on 1/14/2009 11:05:15 PM , Rating: 2
The addition of the millions of healthy people in America to a national health care program would decrease average costs per person
Yeah lets shift the costs onto the healthy working citizens. Not to mention every time little Timmy gets a sniffle, he's off to the doctor at everyone's expense. Why not? It's already paid for. It's like having all phone plans come with mandatory unlimited minutes. Might as well use em. Not to mention that fact that you seem to think putting control of ANYTHING into the hands of the government is going to decrease costs. That's interesting. Say, I've got a bridge for sale...

and would give everybody a sense of getting something for the money they put in.
Yeah right. Just like all the other programs we benefit from, which are paid for with our tax money. Give it a while, and most people will take this for granted too. It would be yet another entitlement.

"I mean, if you wanna break down someone's door, why don't you start with AT&T, for God sakes? They make your amazing phone unusable as a phone!" -- Jon Stewart on Apple and the iPhone

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