Georgia-bound battery maker accused of stealing trade secrets

SK Innovation plans factory that would employ 2,000

A South Korean battery manufacturer on Monday filed a federal lawsuit and a trade complaint alleging theft of trade secrets against a rival company planning a sprawling factory in northeast Georgia it says will one day employ 2,000 workers.

The dispute pits two of South Korea's largest conglomerates against each other in U.S. court and before a top U.S. trade body. In a pair of complaints, LG Chem alleges SK Innovation stole their technology. They request that a federal judge in Delaware and the U.S. International Trade Commission step in to block SK from importing lithium-ion batteries and from even importing equipment for manufacturing and testing batteries into the U.S.

LG Chem, which has its U.S. headquarters in Atlanta, also seeks financial damages.

"SK Innovation has taken LG Chem's highly-skilled engineers and other critical business services staff, thereby gaining access to LG Chem's highly valued lithium-ion battery trade secrets," Hak Cheol Shin, vice chairman and CEO of LG Chem, said in a news release.

“As a direct consequence of that theft, SK Innovation has begun manufacturing and selling imitation (lithium-ion) batteries to LG Chem’s customers and prospects across the world.”

In a statement, SK Innovation said it is reviewing LG Chem’s claims.

“We are confident these allegations are without merit, and we will defend ourselves vigorously in a court of law,” the statement said. “As an industry leading battery maker and the proven choice of partners and customers across the globe, we pride ourselves on carrying out our business activities with integrity and a commitment to fair competition.”

Legal fights among global giants involving lucrative and sensitive technology isn’t uncommon, and companies vigorously defend any real or perceived  threats to trade secrets.

SK, part of a South Korean conglomerate known as SK Group, said last month the nearly $1.7 billion factory along I-85 in Commerce will open in phases and should reach its full jobs potential by 2025.

State leaders hailed the project as a coup for Georgia in attracting a high-tech facility on the leading edge of electric automotive manufacturing.

The SK recruitment also came with one of the largest incentive packages in Georgia history. The state and Jackson County officials offered about $300 million in grants, tax credits and free land to woo the conglomerate.

LG Chem alleges SK hired 77 employees from LG Chem’s lithium-ion battery division, including highly-trained engineers. Those employees are alleged to have brought sensitive trade secret technology related to LG Chem’s “pouch-type” lithium ion batteries to SK.

Gov. Brian Kemp’s office declined to comment on the litigation, though privately state officials did not appear concerned and expressed hope for a resolution.

The SK factory carries outsize importance for Georgia’s automotive sector, as the company, like Kia Motors, is expected to attract suppliers and other vendors to the state.

Georgia lost its domestic automotive plants when Ford closed its Hapeville assembly plant in 2006 and General Motors shuttered its Doraville factory in 2008. But in 2009, Kia helped fill the hole, opening a $1.2 billion factory in West Point, where the company now makes Sorento and Telluride SUVs as well as Optima sedans.

Georgia is the North American headquarters for luxury brands Porsche and Mercedes-Benz.

In recent years, Georgia missed out on several new automotive assembly plants, including factories from Volkswagen, Volvo and commercial van-maker Sprinter. But Georgia successfully landed many suppliers as companies have sought a supply chain and production foothold in the world’s second-largest automotive market to temper the ups and downs of global trade.

Electric vehicles remain a small slice of the automotive market, accounting for about 2 percent of total sales last year in the U.S. But manufacturers see plug-in vehicles as the industry’s future.

Strict emissions and fuel economy standards in the U.S., Europe and China loom, and the potential revolution of self-driving vehicles also hinges on the advancement of electrified vehicles.

SK customer Volkswagen Group, for instance, announced a $50 billion global EV investment program last year, with Chattanooga as its North American manufacturing center.

Improvements in power storage and advancements that would cut development costs are critical for EV adoption.

The new SK factory is expected to produce enough batteries to power 250,000 electric vehicles per year at full capacity.

At a groundbreaking ceremony in late March, Kemp said the factory will create jobs in northeast Georgia that will keep locals in their communities.

“It’s not only an exciting day for all of us here, but it’s an exciting day for all hardworking Georgians out there, for the opportunities they’ll see in the future,” he said.

-Atlanta Journal-Constitution reporter Greg Bluestein contributed to this report