GM And LG Chem Plan $2.3 Billion Electric Battery Venture In Ohio

Paul Sancya  AP

Paul Sancya AP

The GM logo is seen at the General Motors Lansing Grand River Assembly Plant in Lansing, Michigan October 26, 2015.

General Motors and LG Chemical plan to make battery cells for electric-powered vehicles, unveiling a joint venture that they expect to create more than 1,100 jobs in northeast Ohio.

The new JV puts both companies on equal footing and will kick off with the construction of a new 30 GWh battery cell plant in northeastern OH that will create more than 1,100 new jobs. Who knows what the landscape will look like by the time GM and LG Chem's new factory is churning out battery cells at scale.

CEO Mary Barra announced the $2.3 billion deal and said the plant would begin construction next year, near Lordstown, Ohio, where GM shuttered and sold a manufacturing plant that built the Chevy Cruze and other vehicles.

"General Motors believes in the science of global warming and believes in an all-electric future", she said.

The plant's closure was one issue during a lengthy strike by GM workers. Electric vehicles are the future of our economy and transportation system.

The new joint venture will break ground on the facility next year that, when at its full 30 GWh capacity, will rival the current battery cell capacity of Tesla and Panasonic's Gigafactory 1 in Nevada.

Electric vehicle industry suppliers were cheered by the news, especially GM's talk of an EV truck as pickups and SUVs are the heart of the US market.

In brief, GM-LG Chem joint venture lithium-ion battery cell factory to be built near GM's closed Lordstown, Ohio, factory (recently sold to Lordstown Motors).

In addition to vertically integrating the manufacturing of battery cells in the U.S., LG Chem will gain access to an experienced workforce. And for years, most electric vehicles have been sedans, making it harder for them to catch on in an era of SUV supremacy. Sources said workers at the plant were expected to be represented by the United Auto Workers union and earn in the range of $15 to $17 an hour. If so, it would be the first unionized battery factory in the United States. Tesla's factory and LG Chem's battery factory in MI do not have unions.

This announcement, along with the recent sale of GM's manufacturing complex in Lordstown, Ohio to Lordstown Motors Corp. for the production of battery-electric trucks, positions Northeast Ohio and the Mahoning Valley as a major hub for technology and electric vehicle manufacturing.

OH has become a lightning rod in the 2020 presidential election after GM announced in November 2018 plans to close its vehicle manufacturing plant in Lordstown, drawing condemnation from U.S. President Donald Trump.

"The battery plant itself is a critical part of GM's overall strategy to dominate the EV market over the next several decades", Navarro said.

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