GM, LG Chem to build US$2.3b battery plant in Ohio

[SOUTHFIELD] General Motors Co and its battery partner, South Korea's LG Chem Ltd, said they will jointly invest US$2.3 billion in a new electric-vehicle battery plant to be built in Lordstown, Ohio, the same city where the automaker controversially idled and then sold a 53-year-old compact-car factory.

The two companies plan to hire 1,100 workers, about the same number that were laid off when the Lordstown assembly plant that used to make the Chevrolet Cruze compact was idled in March. GM then sold the assembly plant to an electric pickup-truck startup called Lordstown Motors Corp.

GM said that the new plant will lower battery costs as the automaker prepares to launch a global family of electric cars, SUVs and pickups in the next couple of years. The factory will make battery cells for GM's next-generation electric vehicles, including the truck it plans to build in Detroit starting in 2021.

"With this investment, Ohio and its highly capable workforce will play a key role in our journey toward a world with zero emissions," GM Chief Executive Officer Mary Barra said in a statement. "Combining our manufacturing expertise with LG Chem's leading battery-cell technology will help accelerate our pursuit of an all-electric future."

For workers idled in Lordstown, the joint-venture plant is a mixed blessing. The company will make jobs available to those workers, but pay significantly less than the US$32 an hour top wage that GM Assembly workers receive.

The United Auto Workers would have to organise the plant like any new facility, Mrs Barra said. It is not part of GM's master agreement with the union, which would make it a union plant governed by the national contract.

"That's up to the members, the workforce, because it's a new facility," Mrs Barra said.

When Lordstown assembly stopped production in March, 1,200 workers were laid off. Many were transferred to other plants but some workers decided to leave GM and stay in their hometown.

Lordstown Motors plans to build its Endurance pickup in the idle assembly plant, but the company is still raising money from investors to get the project moving.

The battery plant will be a massive venture. GM and LG Chem said that the plant will have annual capacity to make 30 gigawatt hours of battery cells, compared to 20 gigawatt hours at Tesla Inc's Gigafactory in Nevada.

GM and LG Chem have a long history together. The South Korean company supplies battery technology for the Chevrolet Bolt EV already. In a filing at home Thursday, LG Chem said it would invest about US$900 million in its US unit for the joint effort.

Mrs Barra said GM is on a journey to get costs below US$100 per kilowatt hour, to get electric vehicle costs close to that of gasoline powered cars. She also said that GM's next-generation of EVs will be desirable, profitable and affordable.

"Our intent is to grow and lead in electric vehicles," Mrs Barra said.

BLOOMBERG