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GM, LG Chem partner to build $2.3B battery plant near closed factory in Lordstown, Ohio

DETROIT – General Motors said Thursday it is partnering with South Korea's LG Chem in a joint venture to build batteries for electric vehicles in a factory to be located near Lordstown, Ohio, where GM recently closed a car assembly plant.
The companies said they will invest up to a total of $2.3 billion in the battery cell plant through a new, equally owned joint venture. Groundbreaking is likely to begin in the middle of next year. It will create 1,100 jobs.
“With this investment, Ohio and its highly capable workforce will play a key role in our journey toward a world with zero emissions,” GM CEO 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."
GM closed its Lordstown Assembly Plant earlier this year, opening a wound with the United Auto Workers and a bipartisan chorus of critics in Washington, including President Donald Trump. Worker anger over the closing of the Lordstown factory and two transmission plants helped fuel the bitter 40-day strike against GM during talks for a new UAW contract this fall.
Many of the 1,600 GM workers at Lordstown were relocated to jobs at GM plants in other states. But about 400 former Lordstown employees instead took a buyout. Asked if this new investment will mend hard feelings with those workers, Barra told reporters Thursday, “This is very significant with 1,100 jobs. We think this is very important for the state of Ohio, and they have a very capable work force and this will help us succeed.”
Barra said it will be up to the new workers if they want to unionize. She declined to say if the former Lordstown workers would get a priority for hire at the new plant.
“Clearly, we want to tap into the great workforce that is in Ohio,” Barra said.
LG Chem said earlier Thursday it would invest $916 million in its U.S. subsidiary by 2023 to set up the joint venture with GM, according to a Reuters report.
In its 2019 UAW contract talks, GM said it would bring battery cell production to Mahoning Valley in Ohio, which would create about 1,000 jobs.
The new battery plant will use the latest manufacturing processes to produce battery cells efficiently, gaining economies of scale throughout the value chain, GM said. The plant will be able to adapt to ongoing advances in technology and materials. The goal is to reduce battery costs to industry-leading levels.
For its part, LG Chem will gain access to an experienced workforce, it said. It will also benefit from a dedicated production stream of future electric vehicles from GM’s next generation of fully electric vehicles, including a new electric pickup coming in the fall of 2021 that will be assembled at GM's Detroit-Hamtramck Assembly Plant.
“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 CEO Hak-Cheol Shin said in a statement.
GM has been making lithium-ion battery packs at its Brownstown Battery Assembly Plant in Brownstown, Michigan, about 20 miles south of Detroit. There it assembles battery packs for its Chevrolet Malibu Hybrid. The Brownstown plant also makes the roof module for all of the GM Cruise self-driving cars.
This investment builds on GM’s $28 million investment in its Warren battery lab announced late last year. It is also in addition to manufacturing investments in Ohio announced earlier this year totaling approximately $700 million that will create about 450 jobs in Toledo, Parma and Brookville, Ohio.
GM sold its 6.2 million-square-foot Lordstown plant last month to investment group Lordstown Motors, which is backed by electric truck maker Workhorse Group in Cincinnati.
Lordstown Motors will build the Endurance electric pickup starting next year. It will initially create 450 jobs. The truck uses components licensed from Workhorse. The Endurance, designed for fleet sales, is a lightweight, all-wheel drive vehicle with a low center of gravity.
GM has been making electric cars since 2011 when it launched the Chevrolet Volt electric-hybrid. GM ended production of the Volt this year. Since 2016, GM has built the all-electric Chevrolet Bolt sedan and in 2017 it started building GM Cruise autonomous test vehicles in its plant in Lake Orion, Michigan.
 
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