One of New York State’s highly touted high-tech “investments” just shorted out.
General Electric announced today it is pulling the plug on its Durathon battery project, which is manufactured by a Schenectady-based subsidiary, GEMx Technologies. The project, which for a time employed more than 350 people, was awarded $12.5 million in “JOBS Now” capital funding from the state Empire State Development Corp. in 2013.
GEMx also received a $5 million grant from the tax-subsidized Schenectady Metroplex Development Authority, according to ESD documents (pages 22 to 33). A 2013 project summary (page 33) promised $130 million in “economic benefits” over a seven-year period.
GE today said in a statement:
The energy storage industry continues to evolve, and though Durathon battery technology is well-suited for certain applications, today it is just not cost-effective enough to manufacture at a competitive price point compared to other battery technologies. (via WNYT)
Durathon’s failure raises two questions: First, how much, if anything, will taxpayers recoup out of $17.5 million paid to GEMx by ESD and Metroplex? This isn’t the first time GE has failed to meet job creation goals on state-subsidized projects: a 1998 grant also failed to meet employment goals and was later partially repaid, according to the ESD filings (see page 24).
More importantly, while the Durathon grant was initiated under former Governor David Paterson, it serves as a timely reminder of the risk involved in Governor Andrew Cuomo’s ongoing strategy of making speculative public investments in trendy tech projects.