General Motors and LG Chem announced plans for a $2.3 billion factory to build batteries for electric cars. The factory will be near the site of GM’s closed Lordstown assembly plant in Ohio.
The joint venture will employ 1,100 workers. During the recent contract talks with the United Auto Workers union during the GM strike, the automaker offered to have this plant be represented by the union. But GM CEO Mary Barra said Thursday whether or not workers are in the union will be up to the workers who are hired.
Groundbreaking on the plant is expected in the middle of next year, but GM did not give a time frame for when it will start to hire workers and open the plant. Its location also is not yet known.
GM and LG already had a Michigan plant that built batteries for the discontinued Volt. It paid those workers about $15 to $17 an hour, roughly half of what veteran workers at GM’s US factories are paid.
Barra wouldn’t say what these new jobs will pay. But she said if electric vehicle sales are going to grow, then the cost of building the batteries need to be kept in check. “You have to be competitive,” she said. The she added, “But I think these will be good paying jobs.”
The massive Lordstown assembly plant, nearly twice the size of the Pentagon, had as many as 4,500 employees three years ago. But changing taste of American car buyers away from the small sedans doomed the plant. It cut one of three shifts in 2017 and a second shift in 2018. Then GM announced plans to close the plant a year ago. It built its last car, the Chevrolet Cruze, in March of this year.
Barra pointed out that the workers at Lordstown who lost their jobs had been offered positions at other GM plants. Thousands have taken those jobs. But they had to relocate in order to work in plants in Michigan, Tennessee and Texas. Many moved away from their families during the week and expressed displeasure about the fact that GM didn’t agree to union demands to keep the plant open.
Last month GM announced that it reached a deal to sell the plant to a startup company, Lordstown Motors, which plans to build its own electric pickup truck. The CEO of that company says he will pay a wage comparable to what GM and other automakers pay. But it will start off with only 400 workers with most of the hiring starting in September 2020.
GM and other automakers are making a major push to develop electric vehicles, anticipating customer demand for them will grow. GM plans to have 20 all-electric models for sale by 2023. Electric vehicles could account for more half of US car sales within 20 to 25 years, according to a widely cited analysis by Bloomberg New Energy Finance.
“I think this [plant] is a critical juncture to our path to develop an all-electric future,” Barra said Thursday.