Win-win investment

Obama welcomes LG Chem’s advance into US

It is extraordinary for a U.S. president to attend an event for a foreign-invested firm in America. President Barack Obama set a new example by attending a groundbreaking ceremony for Korea’s LG Chem’s electric-car battery factory in Holland, Mich., last Friday. His presence showed how significant it is for the U.S. to attract foreign investment to build a rechargeable battery plant there.

Needless to say, LG Chem’s investment is a win-win strategy both for America and Korea. First of all, LG can expand its global market share of its lithium-ion batteries for electric vehicles by setting a production line in the United States. The company can also contribute to Korea’s efforts to promote low-carbon, green growth.

LG Chem set up its American subsidiary, Compact Power Inc., to start rolling out rechargeable batteries from 2012. It plans to supply its product to GM and Ford, which will power the Chevy Volt and Ford Focus. LG’s factory is a must for the development and mass-production of electricity-powered automobiles in the U.S. In this sense, the company deserves special attention from Obama.

For President Obama, the to-be-built LG plant is a showcase of successful foreign investment that will create jobs and help boost the U.S. economy. This was evident in his speech to the groundbreaking ceremony. ``And so now, when they look at Holland, Michigan, they say, `Instead of jobs moving overseas, we’re seeing jobs move from South Korea here to the United States,’” Obama said.

Obama sees the future of America from investment such as the case of LG. ``That’s something that gives them a sense of a future, a vision in which America is strong. It’s competing. We are producing,” he said. He continued, ``We’re not just consuming. That’s the kind of future I think Americans want.”

Obama also took the occasion to defend his economic stimulus programs, including grants to electric-vehicle battery plants, as a way of generating jobs and getting out of the unprecedented global economic crisis. His strong policy directions have made it possible for LG Chem to receive a $151 million stimulus grant for its $300.3 million investment for the plant. The Michigan State also promised to provide $130 million in tax credit to LG.

Now, LG Chem needs to double its efforts to make top quality products by investing more in research and development. LG and its Korean competitor Samsung SDI currently take a 19-percent share of the global rechargeable batteries market. We hope LG will strengthen its foothold by taking advantage of its advance into the U.S.

Encouraging is that the Seoul government has pledged to invest as much as 15 trillion won ($12.5 billion) in rechargeable batteries over the next 10 years. It’s time to provide more financial support and tax incentives in order to promote the commercialization of electric cars. President Lee Myung-bak and his economic team should also learn from Obama in a bid to attract more foreign investment, create jobs and realize green growth.