General Motors and LG Energy Plan $2.3 Billion Battery Plant

General Motors says construction will start immediately on the facility in Spring Hill, Tennessee.
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Ultium Cells LLC, General Motors'  (GM) - Get Report joint venture with LG Energy Solution, announced plans to invest $2.3 billion in a second U.S. battery cell factory to be located in Spring Hill, Tennessee.

The United Auto Workers union, meanwhile, called upon GM to pay full union wages at electric vehicle battery factories, saying the company and its joint venture partner have a “moral obligation” to pay the higher wages at battery factories

Ultium Cells said construction will start immediately on the 2.8- million-square-foot facility, which will be built on land leased from GM. The plant is expected to open in late 2023. 

Once it is up and running, the plant, which is expected to create 1,300 jobs, will supply battery cells to GM's Spring Hill assembly plant.

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The facility is expected to have production capacity similar to the companies' Ultium Cells joint-venture plant in Lordstown, Ohio, of about 35 gigawatt-hours.

The new Cadillac LYRIQ will be the first electric vehicle to be produced at GM's Spring Hill assembly plant.

GM has committed more that $27 billion to electric and autonomous vehicle product development, including $7 billion in 2021. The company said it plans to launch 30 EVs by the end of 2025 with more than two-thirds available in North America.

In January, GM said it planned to be "carbon neutral" by 2040 and phase out gasoline and diesel cars by 2035. 

Earlier this year, Microsoft  (MSFT) - Get Report partnered with the car company's driverless-car startup Cruise to speed autonomous vehicles to market. Walmart  (WMT) - Get Report said Thursday it was taking a stake in Cruise.

South Korean LG Energy Solution said last month it planned to invest more than $4.5 billion in U.S. battery production over the next four years, including plans to build at least two new plants.

"The addition of our second all-new Ultium battery cell plant in the U.S. with our joint venture partner LG Energy Solution is another major step in our transition to an all-electric future," GM Chairman and CEO Mary Barra said in a statement.

The UAW said that GM and LG Energy Solution have “to make sure these are good-paying union jobs like those of their brothers and sisters who make internal combustion engines."

Top-scale union production workers at internal combustion engine and transmission plants run by GM, Ford and Stellantis (formerly Fiat Chrysler) make more than $31 per hour, according to Bloomberg.

When the Lordstown plant was announced in 2019, Barra said its worker pay would follow GM’s component manufacturing strategy, where workers are paid less than top union wages. She said the plant would have to be cost-competitive.

President Joe Biden has expressed his support for the move to EVs, which he says will create “good-paying, union jobs of the future.”

GM shares were rising slightly to $58.67.