GM, LG Chem to build battery-cell plant in northeast Ohio
Detroit — General Motors Co. and LG Chem will invest $2.3 billion in northeast Ohio to build a battery-cell manufacturing plant, the companies announced Thursday.
The joint venture in the area of the former GM Lordstown Assembly plant will break ground in mid-2020. More than 1,100 new jobs will be created through the investment in the region that was rattled when GM decided to close its 53-year-old plant there. A specific site for the plant was not released.
The Detroit News first wrote about the partnership in mid October.
The investment in Ohio's Mahoning Valley comes as Lordstown Motors Corp., an electric vehicle start-up, prepares to build a truck in the sprawling Lordstown Assembly plant it purchased from GM in early November.
The move by GM to invest in building its own battery cells with LG Chem supplier rather than just relying on LG Chem to supply them will accelerate EV adoption and advance GM's leadership in the EV market, GM Chairman and CEO Mary Barra told reporters following the partnership announcement. The companies anticipate that the partnership will also help lower the cost of batteries.
"We think, as we do this in joint fashion, it's going to accelerate our ability to win in the electric vehicle space," Barra said.
GM already buys its battery cells for the Bolt and hybrid Chevrolet Volt from Korean LG Chem. The new Ohio plant will use advanced manufacturing processes to build cells more efficiently and with little waste, the companies said. The battery plant will have an annual capacity of more than 30 gigawatt hours, with room for expansion.
"Our joint venture with the No. 1 American automaker will further prepare us for the anticipated growth of the North American EV market, while giving us insights into the broader EV ecosystem," LG Chem Vice Chairman and CEO Hak-Cheol Shin said in a statement.
The cells will be used in GM's all-new electric vehicles. GM plans to have 20 all-electric nameplates globally by 2023. One of those will be an all-new electric pickup truck coming in the fall of 2021.
GM plans to retool the Detroit-Hamtramck plant for electric truck and van assembly. It's been reported that GM plans to build an electric Hummer, GMC Sierra and Cadillac Escalade at the Detroit plant. Barra confirmed on Thursday that the plant will have more than one product and the plan now is for the plant's production to be all electric.
"General Motors believes in the science of global warming. We believe in an all-electric future and so we think this is critically important," Barra said.
The Lordstown area is no stranger to companies shutting down. The last Chevrolet Cruze rolled off the line there in March and the 1,400 employees were offered transfers to other GM facilities. Lordstown Assembly was for decades one of the top employers in the area. As recently as 2016, the plant employed 4,500 United Auto Workers members.
"We think this is important for the state of Ohio," Barra said. "They have a very capable workforce. We think this is going to allow us to succeed because of that very capable workforce and also the support we have from the state of Ohio."
Ohio Lt. Gov. Jon Husted and Barra did not discuss specifics on the incentive package for the new investment. Husted said the company has a few sites in the Lordstown area under consideration.
"This technology is the future of transportation and Ohio wanted to make sure that we were involved in that and certainly there is a great workforce in the Lordstown area," Husted said.
Outside of the available blue-collar workforce, the Lordstown area is also centrally located with access to rail and a nearby turnpike, and it helps that GM is "very knowledgeable about what this community has to offer," said Sarah Boyarko, chief operating officer at the Youngstown/Warren Regional Chamber, the area's leading economic development organization.
With the Lordstown Motors purchase of the plant — and now GM and LG Chem's investment — there's been a positive shift in the attitude in the area at the employment opportunities arising.
"There's a noticeable change in the community overall," Boyarko said.
Once the joint-venture plant is up and running, the employees there will have to decide if they want to unionize. Wages at joint-venture plants typically pay less than the assembly plants covered by the UAW international agreement with GM.
"I wish they would have invested the billions in our facility," said Tim O'Hara, UAW Local 1112 president who represented GM Lordstown employees. "I hope the number of jobs they're predicting happens for the valley's economy."