Prabhakar Patil will retire as CEO of LG Chem Power Inc. effective Wednesday, the battery maker said today. He will be succeeded by Denise Gray, who helped develop the Chevrolet Volt’s lithium ion battery system, starting Thursday.
Patil, 65, has served as the CEO of LG Chem Power, the North American research unit of South Korean battery maker LG Chem Ltd., for 10 years. He previously served as chief engineer for the Ford Escape Hybrid from 1998 to 2003.
Patil said in an interview today with Crain’s Detroit Business, an affiliate of Automotive News, that after he retires he plans to act as an adviser to LG Chem Power and teach part time at his alma mater, the Indian Institute of Technology Bombay. He will remain based in metro Detroit.
Under his tenure, LG Chem opened a $303 million lithium ion battery factory in Holland, Mich., that supplies technology for the Chevrolet Volt, Ford Focus Electric and other vehicles. Federal appropriations of $151 million funded half of the plant’s establishment.
The facility had a rocky beginning, but Patil said it is receiving new contracts.
“We started out with the goal of becoming the center of excellence for North American suppliers of lithium batteries, and I think we’ve had potentially achieved that position,” he said.
When the 650,000-square-foot battery cell plant broke ground in 2010, it was expected to be fully operational in 2013, with up to 400 employees and the ability to produce batteries for about 200,000 hybrid and electric cars.
Although the plant was completed in 2011 and about 200 employees were on payroll, LG did not start production locally. Instead, it shipped batteries from Korea as demand for the Volt lagged behind expectations. In 2012, production at the lithium ion battery cell plant was scheduled to start, but the company put 200 employees on a rolling furlough.
In 2013, LG Chem Michigan said it would pay the U.S. government more than $1.2 million to settle allegations it used the federal stimulus money to pay workers who weren't making batteries. They were paid while waiting for the Korean company to move battery production from South Korea to Michigan, according to a statement from the U.S. Attorney's Office. LG Chem Michigan did not admit liability.
The company said in a statement that it paid the employees in an effort to keep a qualified workforce while awaiting the start of production.
The factory reached 25 percent to 30 percent capacity in 2014, Patil said in an Automotive News interview at the time, short of an 80 percent break-even point.
In June, the company said the 4-year-old plant would add another 100 employees this year as it brought on a new automotive customer as part of a $25 million plant expansion.
Patil said in September that the plant’s production is “significantly higher” than in 2014, but he could not specify percent capacity. The boost comes from new contracts, such as one for Audi's micro-hybrid lineup. The contract is worth "hundreds of millions of dollars," Reuters reported.
LG Chem Power has also faced recent competition from Tesla Motors, which is constructing a massive battery plant in Nevada, but in March Patil credited the company for “chang(ing) the image of the electric vehicle and growing the volumes."
“Tesla is a unique case amongst the other battery suppliers,” Patil said. “Tesla is a vehicle manufacturer, and we are in a leading position in the production context.”