Holland's battery plant seen as key in new economy

HOLLAND, Mich. (NEWSCHANNEL 3) – Michigan has been in the red for years. The economy has pushed Michigan to one of the highest unemployment rates in the country.

Michigan has seen businesses tank and the auto industry is now a shell of its former self, but lawmakers are pushing toward a new, greener, economy.

Now a huge new battery plant in Holland is attracting attention and the President of the United States. President Barack Obama will be in West Michigan Thursday for the groundbreaking.

The construction of the LG Chem plant in Holland is a good sign for the economy, and may show that Michigan will remain an automotive leader. While experts say no one industry is going to replace the power the was the automotive industry, it's a good step.

The LG Chem plant in Holland is expected to create hundreds of jobs, and the construction of similar plants across the state is also a good sign that Michigan could at least hang onto the automotive jobs it still has, giving the state a leg up.

“By having lots of different types of manufacturing that supports the automotive close together, it decreases the cost structure and makes it more viable for them to keep their plants here, compared to moving them to the south, which is what we've seen over the last ten to fifteen years,” said Paul Isely, Associate Professor for Economics, GVSU.

Isely says since 2000, Michigan has lost about 440,000 manufacturing jobs, about half of those related to automotive jobs.

Optimistically the 16 new battery plants that have been announced across the state will bring in 60,000 jobs. That's only ten to 20 percent of the jobs lost, but it's a start, and Isely says diversification is the key.

“We're adding solar, we're adding in batteries, we're adding in aerospace,” said Isely. “We now have six different firms supporting the new Boeing jet, the 787, and each of those is a small part of the recovery.”

The hopes is that the LG Chem plant and another new facility in Holland will also have a spillover effect.

“Both of these facilities together constitute about half a billion dollars of new tax base in the City of Holland,” said Holland Mayor Kurt Dykstra. “So, their tax base eventually that comes out of the rolls, there's jobs that come in, there's the spillover effect, there's supplier jobs, there's supplier chains, educational opportunities.”

LG Chem's compact power plant is the ninth of new advanced battery factories to start construction as a result of $2.4 billion in recovery act money the Obama administration announced in August of 2009.