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December 5, 2019 12:00 PM, EST

GM to Build $2.3 Billion Battery Plant in Lordstown, Ohio

General Motors CEO Mary Barra. The new plant will not be at the site of the closed Chevrolet Cruze compact factory. That plant was sold to an electric pickup-truck startup called Lordstown Motors Corp. (Paul Sancya/Associated Press)

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General Motors Co. and its battery partner, South Korea’s LG Chem Ltd., will jointly invest $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.

Our intent is to grow and lead in electric vehicles.

Mary Barra, General Motors CEO

“With this investment, Ohio and its highly capable workforce will play a key role in our journey toward a world with zero emissions,” Mary Barra, CEO of GM, 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 $32 an hour top wage that GM Assembly workers receive.

The United Auto Workers would have to organize the plant like any new facility, 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,” Barra said.

GM's workforce by year

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 still is raising money from investors to get the project moving.

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

GM and LG Chem have a long history together. The South Korean company already supplies battery technology for the Chevrolet Bolt EV. In a filing at home Dec. 5, LG Chem said it would invest about $900 million in its U.S. unit for the joint effort.

Barra said GM is on a journey to get costs below $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,” Barra said.

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