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USA: Livonia battery plant layoffs expected to be temporary

A123 Systems expects its layoff of 125 employees from its Livonia and Romulus facilities to be temporary, public relations manager Dan Borgasano said Friday.

“We expect to be calling these people back in six months or less,” he said. Approximately 700 workers remain employed following the layoffs just prior to Thanksgiving.

The layoffs resulted from an unexpected reduction in orders from Fisker Automotive in California, one of its largest customers, Borgasano said. A123 Systems manufactures advanced Nanophosphate lithium ion batteries and energy storage systems for the transportation, electric grid and commercial markets.

“It’s certainly unfortunate, but we are a supplier subject to situations like this just like any supplier,” Borgasano said. “The part we really want to stress is we expect it to be temporary, hopefully a blip we all get past.”

The Livonia plant opened in September 2010, heralded by Democratic congressional leaders and then-Gov. Jennifer Granholm as the birth of a new era in advanced manufacturing. It is the largest lithium ion automotive battery production facility in North America.

Half of the Livonia plant’s first 300 workers hired in September 2010 had been laid off from their previous jobs.

A123 was awarded a $249 million grant from the U.S. Department of Energy as part of the American Recovery and Reinvestment Act to help the company execute its strategy to ramp up U.S. manufacturing capabilities.

In addition to the DOE grant, the company received $125 million in state incentives from Michigan as part of its 21st Century Jobs Fund to help finance these manufacturing facilities.

It also received a 50-percent reduction in taxes to the city of Livonia for 12 years.
Livonia Mayor Jack Kirksey said the layoffs are the result of “a little bit of a glitch in supply and demand.

“So far they are a huge success story,” he said.

A123 had promised to create 500 jobs in three years in Livonia, he said, and wound up hiring about 800. “They’ve exceeded that pledge,” he said.
To continue receiving tax credits, companies are monitored, he said. “This is just a bit of a blip. I think they are going to be consistent.”
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