The Georgia GOP Is Begging Biden To Act On Battery Plant, While Dems Stay Silent


President Joe Biden campaigned on the promise of electric vehicles and green jobs, and Georgia voters responded with enthusiasm ― electing him to the White House and handing the state’s two Senate seats, and control of Congress, to Democrats.

But a U.S. International Trade Commission ruling has thrown those plans into disarray, threatening to shut down a giant electric vehicle battery factory set to employ upward of 2,600 workers in the suburbs north of Athens, Georgia. In an unusual partisan twist, Georgia’s Republican lawmakers have emerged as the project’s most vocal defenders.

Now Biden has just 19 days left to veto trade authorities’ ruling. The situation, technical and wonky as it is, has largely evaded national scrutiny, but is enormously important, experts say, for jobs in Georgia and the administration’s plans to electrify the nation’s automobiles over the next decade. 

The details of the case illuminate the globe-spanning supply chains facing strain as the COVID-19 pandemic hardens borders and countries scramble to hasten the pace of their transitions from fossil fuels as climate disasters mount. Last month, the ITC ruled in favor of South Korean battery giant LG Chem, finding that rival SK Innovation guilty in a trade secrets case and banning SK Innovation from importing what it needs to run its planned Georgia factory for the next decade. 

So far, there has been no sign from the White House that it will block the decision, and SK Innovation has hired consultants to draft a plan to shut down its $2.6 billion plant in Georgia. The move has sent Peach State officials scrambling to save one of the largest economic development projects in the state’s history.

“There’s nothing partisan about the jobs of the future,” said Pat Wilson, the GOP commissioner of Georgia’s Department of Economic Development.

Flanked by U.S. Democratic Senate candidates Rev. Raphael Warnock (left) and Jon Ossoff (right), President-elect Joe Biden gestures to the crowd at the end of a drive-in rally at Pullman Yard on December 15, 2020 in Atlanta, Georgia.

Unusual Partisan Lines

Georgia’s Republican leaders have been very public in their call for Biden to act to save the Commerce, Georgia, plant. But Democrats have been largely silent. 

None of the six Democrats that represent Georgia in the House of Representatives, nor the Georgia Democratic Party, responded to repeated requests for comment. Five emails to Democratic Sen. Jon Ossoff’s office went unanswered. Stacey Abrams, the former gubernatorial candidate and political star in the state, declined an interview request on the topic. 

Sen. Raphael Warnock (D-Ga.) also declined an interview request, though a spokesman responded to a series of emailed questions with a link to a video from a March 4 confirmation hearing in which Warnock pressed Polly Trottenberg, Biden’s pick for the No. 2 job at the Department of Transportation, on whether the agency would “provide to President Biden an analysis of” the ITC ruling’s effect on U.S. battery supplies.

It’s not a good position for U.S. automakers if they’re only relying on almost one cell supplier.
James Frith, analyst at BloombergNEF

“An adverse ruling by the International Trade Commission threatens seriously the future of that project, whether it’ll happen at all,” Warnock said during the hearing, which took place a month after the ruling. “This would be one of the largest economic investments in Georgia’s history and a severe punch in the gut, if you will, for folks who are counting on those jobs, not to mention President Biden’s own goals.”

Warnock’s concern comes amid mounting pressure from the right in Georgia, where he will be up for reelection in just two years. In a recent newsletter, conservative Atlanta-based pundit Erick Erickson called the ITC’s decision “a bad day for all of us here in Georgia” and compared the potential loss of these jobs to the construction workers laid off in the wake of Biden’s decision to block the Keystone XL oil pipeline. 

“You would think Biden would want to salvage this because Georgia is a state where Raphael Warnock and Jon Ossoff have gotten elected,” wrote Erickson, who recently took over the late right-wing shock jock Rush Limbaugh’s radio time slot. “There are political considerations for the Democrats here with Warnock back on the ballot in two years. If Raphael Warnock and Jon Ossoff don’t have the political clout with a Democratic President to be able to get this decision reversed, they will help contribute to the loss of over 2,000 jobs in Georgia. Does Raphael Warnock really want that going into 2022?”

Georgia Governor Brian Kemp (R) speaks during a press conference announcing expanded statewide COVID-19 testing on Aug. 10, 2

Georgia Governor Brian Kemp (R) speaks during a press conference announcing expanded statewide COVID-19 testing on Aug. 10, 2020, in Atlanta, Georgia.

Some Democrats seem sensitive to the political liability. Carol Browner, the former Clinton-era Environmental Protection Agency administrator, served as an expert witness for SK Innovation, testifying before the ITC that eliminating its Georgia plant put the U.S. electric vehicle supply chain at risk.

On Tuesday, Sally Yates, the former Obama-era deputy attorney general, told The New York Times’ Dealbook that the case could “seriously undermine critical progress on the climate crisis” and risked “killing jobs and setting back the Georgia economy.” Andrew Young, a civil rights leader and former UN ambassador during the Carter administration, warned in an opinion piece last month that the ITC ruling “imperils thousands of direct and indirect Georgia jobs and postpones the future of the new era auto industry” over what he called a technicality. 

Georgia Gov. Brian Kemp (R) struck a similar tone repeatedly in statements over the past two months urging Biden to “support thousands of hardworking Georgians and their communities.” On March 12, he sent a letter to Biden asking the president to “exercise the authority granted to you under law to disapprove the ITC ruling on grounds that it is contrary to the public interest and will seriously jeopardize your administration’s environmental and economic goals.”

“Simply put: the livelihoods of thousands of Georgians are now in your hands,” Kemp wrote. “This critical opportunity requires us to work together for the good of my state and our country.”

GOP Rep. Buddy Carter said he hoped Biden was helping to broker an agreement between LG Chem and SK Innovation that would allow the latter company to move ahead with its manufacturing plans. 

“We don’t want to lose those jobs in Georgia and we don’t want to lose those jobs in the electric vehicle industry,” Carter said. “I hope that the president is engaged, and I have to believe that he has staff engaged in trying to broker a deal here.” 

In a statement, the White House’s U.S. Trade Representative said it was “currently reviewing the policy implications of the ITC determination.” 

“We will complete that review within the 60-day deadline outlined by federal law,” said Adam Hodge, a U.S. Trade Representative spokesman. 

The Trans-Pacific Backstory With High Stakes

The whole fiasco started in 2019, when LG’s battery subsidiary, LG Energy Solutions, lodged its complaint with the ITC. The move seemed unusual. The dispute began in 2017, when SK Innovation poached some engineers in Seoul, a common hiring practice in the cut-throat tech industry. LG filed lawsuits accusing the engineers of violating noncompete contracts.

But it wasn’t until two years later, around the time SK Innovation announced plans to open its massive factory in Georgia to supply Ford Motor Company and Volkswagen with batteries, that LG turned to the ITC. The company filed a separate lawsuit in federal courts, where a judge could award LG monetary damages for alleged intellectual property theft. That lawsuit in Delaware is now pending a conclusion of the ITC case.

But going to ITC represented what trade lawyers call “the nuclear option” because the commission’s guilty verdicts typically carry one kind of punishment: trade bans that virtually obliterate a convicted defendant’s business by restricting what and whether it can import. 

SK Innovation denied that it stole any trade secrets. But on Feb. 10, the ITC found SK Innovation guilty of destroying documents allegedly detailing what it learned from its LG hires. SK Innovation argued that laws in South Korea, where the alleged destruction took place, do not require companies to retain the same documents as U.S. statutes.

An aerial shot from 2020 of the SK Battery America site in Commerce, Georgia, shows construction already underway.

An aerial shot from 2020 of the SK Battery America site in Commerce, Georgia, shows construction already underway.

But the commission ruled unanimously to ban SK Innovation from importing raw materials for the next 10 years ― the period LG said it would take for its competitor to develop batteries on its own. The ITC granted a carve-out for SK Innovation to build batteries for the next four years for Ford’s electric F-150 pickup truck and two years for Volkswagen’s Crossover series. That, the commission determined, should give the automakers enough time to find alternative sources or for SK Innovation to reach a settlement with LG. 

The saga would be a blip in a broader constellation of corporate skirmishes if U.S. manufacturing capacity for electric vehicle batteries weren’t so nascent and fragile. 

The largest battery maker in the U.S. is Tesla, but the company’s Gigafactory in Nevada only churns out packs to power its own vehicles. LG operates a handful of projects across the Midwest that, when completed, will produce roughly 30 gigawatt-hours per year and provide batteries to General Motors and other automakers. SK Innovation’s Georgia plant would add another 22 gigawatt-hours of annual capacity. The rest of the market is made up of much smaller companies. 

LG sent a letter on March 10 to Warnock vowing to “do whatever we can to help the people and workers of Georgia,” and hinting that the company was prepared to make investments in the state to offset the closure of SK Innovation’s factory, according to The Atlanta Journal-Constitution

David Callahan, a lawyer for LG, said the company was preparing to invest $4.5 billion in the U.S., resulting in at least two more factories. One of them, he said, could be in Georgia. 

It’s a sign, said SK Innovation, that LG is “using the ITC to try to muscle SK out of the US EV battery market, period.” 

“SK has always been open to good-faith settlement talks with LG,” a company spokesperson said in a statement. “Unfortunately, LG continues to be inflexible and unreasonable in its demands. It’s clear that LG doesn’t want competition.”

SK Innovation headquarters in Seoul, South Korea, on Feb. 3, 2017.

SK Innovation headquarters in Seoul, South Korea, on Feb. 3, 2017.

Allowing LG to dominate the battery market would pose significant risks to producing electric vehicles at the speed and affordability the Biden administration wants, said James Frith, an analyst at the energy research firm BloombergNEF.

“Competition within the battery industry has been one of the key factors that helped to drive down cell and pack prices over the past decade,” he said. “It’s not a good position for U.S. automakers if they’re only relying on almost one cell supplier, because that cell supplier could set prices as it liked.”

Other manufacturers could fill SK Innovation’s void, he said, including giants like Japan’s Panasonic Corporation, South Korea’s Samsung, and CATL or BYD, China’s two biggest players in the market. 

But Callahan denied that the company was seeking a monopoly, and instead accused SK Innovation of bluffing about its willingness to shutter the plant to stave off a potentially costly settlement. 

“If SK Innovation intends to be in this hugely growing market in the long haul, which they have said they are, it would be suicide to leave Ford and Volkswagen in the lurch,” said Callahan, who works at the law firm Latham & Watkins. “They’re threatening to walk away from the plant, we think it’s an idle threat.”

He added: “They’re threatening Georgia. If I were Georgia, I would be mad. I understand for political reasons not everyone is going to acknowledge that.” 

SK Innovation already started hiring hundreds of workers, and it could take years for another company to replace the plant, much less increase the supply to the levels needed to electrify the U.S. auto fleet. 

“We need batteries in order to keep up with the demand, this was not only an investment into Georgia but an investment into electric vehicles in the United States and a diversification of the supply chain outside of Asia,” Wilson said. “We saw this as a win-win for the state and the country.” 


Anderson Cooper Says Being A Dad Is 'Truly The Greatest Thing Ever'

Previous article

Hiring Experts Say These Are The Most Revealing Interview Questions They Ask

Next article

You may also like


Leave a reply

Your email address will not be published. Required fields are marked *

More in Trade