CLEVELAND, Ohio — General Motors’ joint venture with a South Korean chemical company to manufacture electric vehicle batteries will create 1,100 jobs at a new facility to be built in Lordstown, the home of a former GM auto plant, the companies said Thursday.
The joint venture between GM and LG Chem will invest up to $2.3 billion in the plant, which will mass-produce battery cells for future battery-electric vehicles, the companies announced at a Thursday news conference in Detroit. The new plant will be built on a greenfield site in the Lordstown area. Groundbreaking is expected to take place in mid-2020.
“With this investment, Ohio and its highly capable workforce will play a key role in our journey toward a world with zero emissions,” said GM Chair and CEO Mary Barra, who described the joint venture as “critical” to achieving this goal. “Combining our manufacturing expertise with LG Chem’s leading battery-cell technology will help accelerate our pursuit of an all-electric future. We look forward to collaborating with LG Chem on future cell technologies that will continue to improve the value we deliver to our customers.”
She said the joint venture has looked into public incentives for the project, but Barra said she would “not go into any details.” Assistance for the project will be made public after a final agreement is executed, said Matt Englehart, spokesman for JobsOhio, the state’s private economic development arm. He said he didn’t have information about what assistance the joint venture had requested.
Gov. Mike DeWine called it “great news for Ohio.”
“Ohio is a major supplier state for the automotive industry, and the announcement that Ohio will be the location to manufacture next-generation electric batteries will mean more than 1,100 new jobs for Ohioans,” DeWine said in a news release.
In November, GM sold its Lordstown auto plant to Lordstown Motors Corp., which intends to hire 400 workers and begin production on the Endurance all-electric pickup truck there by late 2020. The old GM facility was idled last March.
Lordstown Motors’ CEO is Steve Burns, founder of Cincinnati-based Workhorse Group, a fledgling electric-truck maker that will hold a minority stake in a new venture and provide it with technology needed for the new pickup trucks.
The GM facility had employed 4,500 people about two years before it was idled. In March, as part of a major GM restructuring plan, the plant ended more than 50 years of car manufacturing. GM attributed the shutdown to declining demand for its product, the Chevy Cruze. Positions at the electric truck plant are slated to be union.
Barra said it was up to the workers at the new plant as to whether they would be represented by a union. Democratic State Sen. Sean O’Brien, whose district includes Lordstown, said he asked GM officials if workers there would be represented by a union, and the officials said they would consider a proposal from the United Auto Workers.
Darwin Cooper, vice president of UAW Local 1112, said his members are hoping both facilities “will be successful, and that we can help them be successful.” Still, he said the new jobs won’t equal those lost at the old GM plant. He said the sting of the automaker closing the facility remains. One of the UAW’s demands in the recent strike against GM was to have production resume at Lordstown.
“We’re hoping that this works out really well, but we’re a little skeptical,” Cooper said. “We don’t trust too many companies right now.”
Barra declined to say if laid-off Lordstown workers would have first dibs for the openings at the new facility, but she said the joint venture wanted to “tap into the great workforce that is in Ohio.” Barra said the positions at the battery plant would be “very good-paying jobs,” but she wouldn’t say whether they would be at the UAW payscale. The recently negotiated UAW contract with GM sets the hourly rate for all permanent manufacturing employees at $32.32 by 2023.
Steve Fecht for General Motors and LG Chem
Ohio Lt. Gov. Jon Husted, center, is flanked by General Motors CEO Mary Barra and LG Chem CEO Hak Cheol Shin on Thursday in Warren, Michigan, as the companies announce a joint venture that will result in more than 1,100 new Ohio jobs. (Photo by Steve Fecht for GM and LG Chem)
Local 1112 President Tim O’Hara said 1,200 Lordstown workers took transfers to Toledo or out-of-state after the plant was idled. O’Hara said his family relocated to Bowling Green, Kentucky, after his wife took a GM job there. He retired from the Lordstown plant and regularly returns to the area as union head.
He was happy to learn of the joint venture, but it doesn’t quell his lingering concern.
“I wish they would have invested that $1 billion into our facility,” he said of the old GM Lordstown.
The closing of the facility came into the political spotlight in November 2018. President Donald Trump criticized GM’s restructuring plan and pushed the automaker’s executives to either reopen or sell the plant — even threatening to cut off all federal subsidies to GM.
Trump took a particular interest in the Lordstown plant because Ohio was key to his 2016 presidential victory. Soon after taking office, he promised supporters at a rally in the region that manufacturing jobs would be “coming back.”
Lordstown Mayor Arno Hill said he is optimistic the new facility will land in his village of just a few thousand residents.
“I think this is positive for the [Mahoning] Valley. I think [the facility] will be coming to Lordstown, but there are still details [to be worked out] as far as the site and if there are any incentives being requested,” he said. “I’m ready to roll. I’m just waiting for the call.”
Hill said there are a few sites in the village he believes would be a good fit for a newly constructed plant, including at an industrial park and a former GM property.
Barra and LG Chem Vice Chairman and CEO Hak-Cheol Shin said the new facility will help position Northeast Ohio into becoming a major hub for technology and electric vehicle, or EV, manufacturing. Much of the battery cell production for these vehicles is currently done abroad.
“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,” Shin said. “Our long-standing history with General Motors has proven our collective expertise in this space, and we look forward to continuing this drive for zero emissions.”
Tom Humphries, transitional CEO at the Youngstown/Warren Regional Chamber of Commerce, said the “Drive It Home” campaign, launched by the chamber and local UAW to save GM Lordstown from closing, played a role in the battery plant coming to the area.
“With a unified voice we let GM know, through the deliberate messaging of “Drive It Home,” that we would continue to welcome them in our region and hoped they would utilize our strong and capable workforce,” he said.
O’Brien, the state senator, said discussions are already taking place with the local colleges and universities to prepare students for the types of jobs that will be created by an EV economy.
Democratic U.S. Rep. Tim Ryan, whose district includes Lordstown, said “electric vehicles are the future of our economy and transportation system,” and he is optimistic that the region is poised to play a role in this.
“Let’s get off and running and start dominating the new economy like we dominated the industrial economy 50 years ago,” he said.
GM’s announcement comes roughly a month after the UAW made public that Ford Motor Co. would invest $900 million for a new product line and other improvements at the Ohio Assembly Plant in Avon Lake and $125 million for continuing upgrades at its Cleveland Engine Plant in Brook Park. Ford confirmed the investments.
Avon Lake Mayor Greg Zilka said a Ford official told him the investment at the Ohio Assembly Plant would create 1,500 jobs by 2023.
Information from the Associated Press is included in this story. Cleveland.com reporter Sabrina Eaton also contributed.