SK Battery threatens to abandon Georgia plant if Biden doesn't side with them
The $2.6B SK Battery plant in Jackson County is supposed to be finished by 2022. Could the company really abandon operations if President Joe Biden doesn't side with them in a trade secrets dispute?
COMMERCE, Ga. - SK Battery is threatening to stop work on its promised factory in Jackson County and leave the country unless President Joe Biden sides with them.
Biden has until April 11 to reverse a decision that punishes SK over allegations it stole trade secrets from another Korean competitor to build the $2.6 billion plant, expected to provide an estimated 2,600 green jobs for Georgia.
To land the Jackson County plant, state and local leaders gave the company one of the biggest tax breaks in state history: $300 million in tax abatements and free land.
It’s scheduled to start producing batteries for electric vehicles in 2022.
But in February, SK Battery’s parent company SK Innovation suffered a huge embarrassment. The United States International Trade Commission ruled the company tried to destroy evidence it stole 22 trade secrets from a rival Korean battery manufacturer — LG, now called LG Energy Solutions.
The punishment was severe — a 10-year ban on the battery technology SK is accused of stealing. That would essentially shut down the Jackson County operation.
SK denied doing anything wrong, instead urging the White House to veto the USITC ruling.
If he doesn’t, an SK spokesperson told Reuters, "we are reviewing options to move our US battery production to Europe or China."
But talk to folks around Jackson County and it’s clear the shine is off what was expected to be a huge jobs generator.
"It’s kind of dimmed the light a little bit for the community," agreed Commerce resident Tim Shafer.
Shafer complained about the impact the current plant has already had on his community. Federal authorities say they’ve caught Korean nationals trying to sneak into the country to help build the plant, taking jobs away from American workers.
Many neighborhoods surrounding the plant have homes occupied by multiple workers from overseas, shuttled back and forth to the plant.
Commerce residents like Joy Shafer have already soured on the SK Battery plant, unconvinced the company will provide the promised jobs to the community.
"The exciting part was it was going to bring us a whole ton of jobs," observed Commerce resident Leighann Cook. "That was the good part. And now that only good part hasn’t panned out."
SK said around 250 Americans currently work at the plant, with many more helping with the actual construction.
But the immediate fate of the Georgia plant is now in the hands of Biden. Does he uphold the ruling, possibly putting all those green jobs at risk? Or does he reverse the ruling, potentially setting a precedent by ignoring a company’s bad behavior and sending a message to other companies that their intellectual property will not be protected here?
Many Georgia politicians are lobbying on behalf of SK, worried that punishing SK would force the United States to rely more on Chinese-made batteries for the growing electric vehicle market.
This full-page ad in the Atlanta Journal-Constitution is the latest in a public relations war between two rival Korean battery manufacturers.
Meanwhile, LG took out a full-page newspaper ad in the Atlanta Journal-Constitution, dangling the possibility Georgia might get one of its two new battery plants planned for the United States.
"No matter what SKI does, we will not leave the state of Georgia without jobs," said Denise Gray, the president of LG Energy Solutions Michigan Tech Center.
Gray said her company is ready to provide the batteries SK is supposed to be building in Jackson County for the new Ford F-150 electric pickup and VW ID.4 SUV.
The government ruling allows SK a four-year grace period to fulfill the Ford contract, two years for VW.
The two companies have tried to negotiate a settlement.
The Korean press reports LG is asking for 3 trillion won — about $2.3 billion — close to the entire value of the Jackson County plant. According to those same reports, SK countered with 1 trillion won, around $888 million.
"I cannot say if those numbers are accurate myself," said LGES’ Gray when asked. "But what I do know is that we do want a settlement. Believe me, for the jobs in the United States. The jobs in Georgia."
SK was given a four-year exemption to build batteries for the new electric Ford F-150. But the company is threatening to move all operations overseas if the White House rules against them later this week. (photo by Ford)
No one from SK would comment for this story. Even if the president sides with SK, the dispute with LG would then head to federal court.
"We hope the Biden Administration will use their authority to overturn the ITC decision and support the commitment of job creation in our community and state," Commerce city manager James Wascher said in an email to the FOX 5 I-Team.
Like other state and local leaders, he said the dispute should be settled in federal court.
"If any wrongdoing is determined at that point," wrote Wascher, "damages can be awarded commensurate with the facts presented at the trial."
It means a settlement between the two Korean battery rivals is the only current way to ensure the future of the Jackson County plant.
"Absolutely," agreed Gray. "And it could be over sooner if it’s a thumbs up from the president. It could take forever to decide and conclude if it’s a thumbs down. And that’s what … nobody wants that."
Residents we talked to have already made up their minds.
"There’s already a judgment," said Joy Shafer of Commerce. "Leave it alone."
"I don’t think he should reverse any decision," said Leighann Cook. "I think they should call it quits and go away."
Would that really happen? People here are about to find out.
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