If the imperiled SK Battery plant in Commerce ends up closing down over an intellectual-property dispute, the outcome could be twice as bad for Georgia as previously expected.
It turns out that the Korean company was not just planning the $2.6 billion in capital investment and 2,500 jobs it had already publicized, but it had also already picked the site to receive double the amount of each.
SK’s plan to spend $5 billion in the U.S. battery business was never a mystery, but in a presentation to the Office of the U.S. Trade Representative last week, the company tied the entire plan to the Georgia site for the first time, noting that the company “plans to invest a total of $5 billion by 2025 to expand the facility, creating a total of 6,000 high-paying jobs.”
The revelation raises Georgia’s stake in the company’s ongoing legal battle with rival LG Energy Solutions.
Last month, the International Trade Administration made a final determination in their dispute, finding that SK violated document preservation requirements while fighting LG’s claims that it had stolen trade secrets in hiring away key talent. SK claims that the ITC ruling was misplaced, given that the activity happened in Korea, where it claims the original hiring practices in question were legal.
Either way, SK is now barred from importing electric-vehicle batteries and components for 10 years, with a carveout that would enable it to fulfill existing orders by Ford and Volkswagen for two and four years, respectively, to give the auto makers time to find alternate supply for their new EV models.
SK argued that the carveout acknowledges the scarcity of battery supply in the U.S. while practically condemning the plant to closure, threatening both President Biden’s clean-energy goals and the livelihoods of Georgians.
Mr. Biden still has about 35 days left in a 60-day period to review and overturn the ruling, an action that would be rare but not unprecedented.
In its USTR presentation, SK made that the carveout is misguided, since battery programs take more than five years to realize after research and development. The company said removing SK from the market takes away 47 percent of the country’s “non-captive battery supply” — that which is not controlled by an OEM like Tesla — leaving other auto makers beholden to an LG Energy Solutions monopoly. For relief, SK said, these car companies would likely be forced to source from China, bolstering its already substantial lead in the lithium-ion battery sector.
LG has a lawsuit pending in federal court that could result in monetary damages, a fact SK is using to argue that a presidential intervention would not impinge on LG’s rights. It also argued that LG already has as much business as it has capacity to fulfill.
Both sides have said they are open to settling the dispute, especially after Korea’s prime minister in January called the conflict between two global leaders from the country “embarrassing.”
An SK spokesperson offered this statement:
LG refuses to make a good faith effort to settle this dispute. LG’s outrageous settlement demands would render SKI’s battery factory in Georgia commercially unviable. Further, the ITC remedies make it infeasible for SKI to continue construction of their second facility, a multi-billion dollar investment. It’s critical that President Biden use his power to disapprove of the ITC remedies in this case and to protect the interests of American stakeholders—including the many workers whose jobs will be supported by this facility. If the ruling is not overturned, SKI will be forced to consider all possible options, including the closure of its Georgia operations.
LG has not made a public statement on the SK presentation to the U.S. Trade Representative’s office, but said when the initial ruling was issued that “SKI’s total disregard of our warnings and intellectual property rights gave us no choice but to file this case and we are grateful to the International Trade Commission for protecting our innovations and significant economic investments in the United States.”
Georgia officials have waded into the dispute, with Gov. Brian Kemp calling for Mr. Biden to overturn the ruling and newly elected U.S. Sen. Raphael Warnock said the Feb. 10 ITC ruling was “a severe punch in the gut” for Georgia workers, according to Reuters.
Dueling op-eds, first from Atlanta attorneys advising LG, and later a joint byline from Georgia Department of Economic Development Commissioner Pat Wilson and former Ambassador Andrew Young, have shown in recent weeks the diverging views on the topic.
Global Atlanta has published both sides:
Opinion: SK Battery Plant Puts Georgia In Driver’s Seat for Green Energy Jobs
Opinion: Trade Secret Thief Gives Georgia False Choice Between Jobs and Justice
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