South Korean Battery Makers Pitch White House About Disputed Georgia Factory -- 2nd Update
March 01 2021 - 3:34PM
Dow Jones News
By Ben Foldy
A pair of South Korean battery makers made their pitches to the
Biden administration about a disputed factory project under
construction in Georgia seen as key to the electric-car plans of
Ford Motor Co. and Volkswagen AG.
SK Innovation Co. is looking for the White House to overturn a
ruling by the Federal Trade Commission last month that the company
said would cause it to abandon a $2.6 billion battery factory
complex it had hoped to open later this year, according to a copy
of a presentation made to officials last week and reviewed by The
Wall Street Journal.
The new complex, located northeast of Atlanta in Commerce, Ga.,
is expected to create 2,600 jobs and supply electric-car batteries
to Ford and Volkswagen, SKI has said.
In the presentation given to administration officials, SKI also
disclosed previously unreported plans to expand the factory complex
by investing another $2.4 billion in the project and creating an
additional 3,400 jobs by 2025.
Meanwhile, representatives of LG Chem met with administration
trade officials Friday to make their pitch for preserving the
ruling, according to people familiar with the discussion.
Nearly two years ago, rival battery maker LG Chem filed a
complaint with the International Trade Commission accusing SKI of
stealing trade secrets relating to lithium-ion battery production.
SKI has denied the allegations.
The ITC -- an independent government agency -- in a Feb. 10
ruling upheld an earlier judge's determination that SKI had
destroyed evidence relating to the case. The ruling prohibited SKI
from importing batteries and other components needed to support the
U.S. factory production for a decade, disrupting its plans to bring
the complex online.
The commission ruled that SKI in the meantime could support its
existing contracts with Ford and VW for four and two years,
respectively, to give those companies time to find another battery
supplier.
The ruling started the clock on a 60-day review period in which
the decision could be overruled by the White House on policy
grounds. While rare, such a reversal has precedent.
LG Chem's stance is that it can increase its U.S. battery-making
capacity to accommodate Ford and VW during the period in which SKI
is banned from importing components, according to the people
familiar with talks between the company and the administration. LG
Chem is also open to accepting financial restitution from SKI to
settle the matter, they said.
A spokesman for the Office of the U.S. Trade Representative
declined to comment on discussions with the two battery makers.
The legal fight between two of the world's largest battery
makers highlights the high stakes that auto makers face in securing
batteries and meeting growth targets for electric vehicles.
Tightening restrictions on tailpipe emissions and commitments by
some governments to phase out gas-powered vehicles in the coming
decades are pressuring auto makers to sell more battery-powered
cars or face the prospect of steep fines.
The spat touches on several of President Biden's policy
priorities: fighting climate change by transitioning the
transportation sector to electric vehicles, creating jobs and
building up domestic production capacity for batteries to reduce
dependence on manufacturers abroad.
On Wednesday, the Biden administration ordered a 100-day review
of electric vehicle battery supply chains as well as those for
semiconductor chips, pharmaceuticals and rare-earth minerals with
the aim of spurring the U.S. industry.
South Korean Prime Minister Chung Sye-kyun on Jan. 28 said the
dispute was embarrassing and that he had spoken with the heads of
both companies pressing them to resolve the matter.
After the ITC's ruling, Ford Chief Executive Jim Farley said in
a tweet that a settlement between the two companies would be in the
best interests of U.S. manufacturers and workers.
Both Ford and VW told the ITC last year that sanctions against
the SKI plant could significantly hinder their efforts to build
electric vehicles in the U.S.
SKI is set to provide Ford with batteries for an electric
version of its bestselling F-150 pickup truck, which is expected to
launch next year, while VW plans to start building its ID.4
crossover in Tennessee in 2022, with batteries supplied from SKI,
the auto makers have said.
The SKI presentation to administration officials said the ITC's
judgment was based on the destruction of evidence and not a finding
of trade-secret theft. It also highlighted other SK Group
investments in U.S.-related businesses, such as last year's $9
billion acquisition of Intel Corp.'s flash-memory manufacturing
business by SK Hynix Inc., another SK subsidiary.
Presidents have intervened in ITC rulings before. The Obama
administration in 2013 overruled a decision to ban Apple Inc. from
importing certain iPhones and iPads after a case filed by Samsung
Electronics Co. alleged they infringed on a patent held by the
Korean electronics maker. The Obama administration said its
decision was informed in part by concerns about potential harms to
consumers and competitive conditions in the U.S.
Write to Ben Foldy at Ben.Foldy@wsj.com
(END) Dow Jones Newswires
March 01, 2021 15:19 ET (20:19 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
Ford Motor (NYSE:F)
Historical Stock Chart
From Mar 2024 to Apr 2024
Ford Motor (NYSE:F)
Historical Stock Chart
From Apr 2023 to Apr 2024