The writer, a Los Angeles freelancer and former Detroit News business reporter, writes a blog, Starkman Approved.
By Eric Starkman
Congress, you were warned!
Secretary of Energy Jennifer Granholm
When President Biden announced his plans to install former two-term Michigan governor Jennifer Granholm as his energy secretary, the Mackinac Center for Public Policy compiled a list of her litany of green energy failures when she served in Lansing.
“The former Michigan governor's strength, supporters say, is her ability to focus on electric cars and move the country off of fossil fuels,” the think tank said. “That was a major focus of Granholm’s two terms as governor, which she pursued by selecting particular businesses and industries to back with state taxpayer support.
“It didn’t work, however. Even though the state approved billions of dollars in tax credits and grants for the chosen companies, nearly every single one fell far short of the job projections hailed by the Granholm administration in press releases. And a good number of the companies went bankrupt.”
Despite, or perhaps in the case of Congress because of her nearly unblemished record of green energy boondoggles, Granholm was confirmed as Energy Secretary, giving her control of billions of taxpayer funds to pursue “investments” in projects she lacked the demonstrated expertise to evaluate. The results have been disastrous, and billions of U.S. taxpayer monies have been squandered.
Bad Optics
The taxpayer largesse Granholm showered on GM and Ford in particular have very bad optics and warrant a Congressional investigation.
Granholm’s Department of Energy in December 2022 announced a $2.5 billion loan to Ultium Cells LLC to help finance the construction of new lithium-ion battery cell manufacturing facilities in Ohio, Tennessee, and Michigan. Ultium Cells is a joint venture between General Motors and South Korea-based LG Energy Solution.
“DOE is flooring the accelerator to build the electric vehicle supply chain here at home—and that starts with domestic battery manufacturing led by American workers and the unions that support them,” Granholm crowed. “This loan will jumpstart the domestic battery cell production needed to reduce our reliance on other countries to meet increased demand and support President Biden’s goals of widespread EV adoption and cutting carbon pollution produced by gas-powered vehicles.”
Granholm promised the projects would create more than 11,000 good-paying jobs—6,000 in construction jobs and 5,100 in operations. Under the terms of Granholm’s sweetheart loan, Ultium Cells could borrow money at the same low rate of interest as the U.S. government does when it issues Treasury bonds, saving the joint venture untold millions.
GM announced this week it is selling its stake in the Lansing Ultium Cells LLC battery plant to its partner LG Energy, putting the Michigan plant under 100% foreign ownership. GM didn’t explain why it chose to dump its ownership in the Lansing battery plant, while retaining ownership in the Ohio and Tennessee battery plants. The Detroit News reported that GM also received $666.1 million in Michigan tax incentives for the Lansing battery plant.
The Lansing battery plant sale is yet another GM diss to Michigan and an example of the company looking to reduce its footprint in the state. GM has fired some 1,600 workers at its Warren tech center since August, while adding high paying jobs at its newly opened Silicon Valley satellite office where its top software and battery executives are located. GM’s head of communications, Lin-Hua Wu, is also based in the Bay area, another insult to Michigan.
What’s especially galling is that GM’s sale of its Lansing battery plant interest comes just weeks after Granholm announced a $500 million U.S. taxpayer donation to GM to cover the costs of retooling a Lansing assembly plant to make electric vehicles. Granholm made the donation despite Barra spending $16.5 billion in the past 12 months to buy back GM’s stock to enrich herself and other GM shareholders. The donation was akin to the U.S. government issuing food stamps to someone who spent lavishly buying sprawling estates, luxury automobiles, and designer jewelry.
GM and Biden Administration
Jeff Ricchetti
GM’s relationship with the Biden administration can accurately be characterized as a family affair. As reported by Politico, Barra is close with Biden. Jeff Ricchetti, whose brother Steve Ricchetti counseled Biden, is a GM lobbyist. Steve Ricchetti also lobbied for General Motors between 2001 and 2008, a few years before he became counselor to then-Vice President Biden, and later his chief of staff. Brothers Richetti lobbied the Senate for GM while Biden was a senator from Delaware.
Missy Owens, Biden’s niece, is GM’s director of global sustainability policy.
Hard as it is to believe, the optics of the taxpayer largesse Granholm showered on Ford are even uglier.
As I previously explained on my Starkman Approved blog, Granholm’s DOE last year granted Ford a sweetheart $9.2 billion below market interest rate loan to finance the construction of a mega plant in Tennessee called Blue Oval to manufacture EV pickup trucks and advanced batteries, as well as twin battery plants in Kentucky that would power a new lineup of Ford and Lincoln EVs. Ford said it was investing a total of $11.4 billion in the projects, meaning Granholm had provided taxpayer funding to subsidize most of the costs.
The $9.2 billion loan far and away was the single biggest financial commitment the Biden administration had made in its effort to build an electric vehicle manufacturing network in the United States.
Chris Smith (Linkedin photo)
A few months before Granholm rubberstamped the loan, she named Chris Smith, Ford’s chief lobbyist, as an advisor on the DOE’s loan fund. Smith already was well acquainted with the DOE, having previously served as assistant secretary for fossil energy. Smith reports to Steven Croley, Ford’s general counsel who previously was a special assistant to President Obama for four years and then served as the DOE’s general counsel.
Ford has delayed opening the Tennessee plant for at least two years, and indefinitely delayed the opening of one of its Kentucky plants. The company has also significantly scaled back plans for a battery plant in rural Marshall, MI, for which Gov. Gretchen Whitmer spearheaded more than $1.7 billion in subsidies. Fertile farmland and century old trees were needlessly destroyed to accommodate the project.
Center for Economic Accountability ranked Whitmer’s $1.7 billion in subsidies the worse economic development deal of 2023.
That Granholm would divert taxpayer monies to finance GM’s and Ford’s EV ambitions was questionable from the get-go. GM and Ford rack up billions in profits selling their gas engine trucks and SUVs and financing their transition to EVs put upstart companies like Rivian at a disadvantage.
It was always far from certain that GM and Ford could successfully make the transition. Cathie Wood, a money manager specializing in alternative tech and energy companies, opined in 2021 that GM and Ford didn’t have the DNA “for this brave new world” of electric vehicles.
While Granholm’s green energy investments have been disastrous for U.S. and Michigan taxpayers, Granholm has personally made out quite nicely. After decamping from Michigan, she served on the board of electric bus maker Protera, a company once touted by President Biden. Granholm pocketed $1.6 million cashing out the options she received for imparting her green energy wisdom on the company.
As might be expected for a company that named Granholm to its board, Protera last year filed for bankruptcy.
Reach the writer at Eric@starkmanapproved.com. Confidentiality is assured.
