As South Korean battery makers LG Chem and SK Innovation inch toward the deadline for a final ruling by the US International Trade Commission, scheduled for Dec. 10, rumors are swirling that the institution may delay the decision a third time, according to industry sources on Sunday.
“There are multiple factors that make the rumors about a third delay plausible, such as the changing US administration and the continued spread of COVID-19,” an industry source told The Korea Herald.
The deadline was initially set for Oct. 27, but was postponed by the USITC without an official reason.
In February, the USITC had made a preliminary ruling in favor of LG Chem, which had accused SK Innovation of theft of trade secrets. The agency cited SK Innovation’s apparent destruction of evidence as the reason behind its call.
While SK Innovation maintains that this does not prove LG Chem’s allegations -- that SK Innovation poached intellectual property by recruiting LG Chem researchers -- it is rare for the USITC to reverse an earlier decision in a final ruling.
However, each time the final ruling is delayed, it gives SK Innovation more time to study the cards it can play.
For SK Innovation, what’s at stake are its two new manufacturing plants being built in the US state of Georgia, which are expected to cost $2.5 billion to build.
Losing the suit means SK Innovation will be prohibited from bringing in needed parts and materials, creating creases in its plans to supply batteries to Ford and Volkswagen from the Georgia plant.
An SK Innovation official told The Korea Herald that the Georgia plant creates jobs in the region -- a factor for President Donald Trump or President-elect Joe Biden to consider, depending on who is in office at the time, when he reviews the final ruling. The company plans to trial-run the Georgia plant in the first half of 2021 and start full-fledged commercial production in 2022.
There remains a sliver of a chance that LG Chem and SK Innovation may strike an agreement.
LG Chem demands that SK Innovation provide a heartfelt apology and reasonable compensation, the exact amount of which has not been disclosed.
According to ProPublica, a nonprofit investigative journalism outlet, LG Chem reportedly spent $311,000 to lobby the White House, the US Senate, the House of Representatives and the US Department of Commerce over this case. The compensation it seeks from SK Innovation will have to be commensurate with the costs it has poured into the suit, industry insiders suspect.
For the future, the role of the plaintiff will pass on from LG Chem to LG Energy Solution, the battery-specific spinoff to be launched Dec. 1.
By Lim Jeong-yeo (email@example.com