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GM, LG Chem set $2.3 billion electric vehicle battery venture in Ohio

WARREN, Michigan (Reuters) – General Motors Co (GM.N).and South Korea’s LG Chem (051910.KS) said on Thursday they will invest $2.3 billion to set up an electric vehicle battery cell joint venture plant in Ohio, creating one of the world’s largest battery facilities.

The plant, to be built at a new site near GM’s closed assembly plant in Lordstown in northeast Ohio, will employ more than 1,100 people, the companies said. Construction is to begin in mid-2020 and the plant will have an annual capacity of more than 30 gigawatt hours with the flexibility to expand.

At a media briefing, GM Chief Executive Officer Mary Barra said the 50-50 joint venture with LG Chem is aimed at “dramatically enhancing electric vehicle affordability and profitability.”

Barra said the Ohio battery plant will accelerate the automaker’s initiative to introduce 20 new electric vehicles globally by 2023.

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

Barra said the new battery cells will be used in a GM electric pickup which will start production in fall 2021 at the company’s Detroit-Hamtramck plant.

Barra said the Detroit-Hamtramck plant eventually will “have more than one product.” In October, Reuters reported that plant is expected to build at least four different electric vehicles, including an SUV for Cadillac and a pickup for GMC.

The Ohio battery cell plant will boost LG Chem’s global battery capacity to 100 gigawatt-hours by the end of 2020, LG Chem CEO Hak-Cheol Shin said at the briefing. Each company will invest about $916 million, with the rest coming from debt capital raised by joint venture, a GM spokeswoman said.

Sources familiar with the plan said workers at the plant were expected to be represented by the United Auto Workers union and earn $15 to $17 an hour. If so, it would be the first unionized battery factory in the United States. Tesla’s (TSLA.O) Nevada battery factory and LG Chem’s battery plant in Michigan do not have unions.

Barra said the plant’s workers would decide whether a union represents them, and said pay would be competitive with other parts plants.

FILE PHOTO: A view of the entrance to the West Plant at the General Motors Lordstown Complex, assembly plant in Warren, Ohio, U.S., November 26, 2018. REUTERS/Alan Freed/File Photo

The average pay for a UAW worker at GM is about $31 an hour.

Ohio became a political lightning rod last year, after GM announced in 2018 plans to close a car manufacturing plant in Lordstown. The closure was one issue during a lengthy strike by GM workers, and U.S. President Donald Trump condemned the move.

Barra said Ohio is providing financial incentives for the plant, but declined to provide details.

Additional reporting by Hyunjoo Jin and Heekyong Yang in Seoul, David Shepardson in Washington and Ben Klayman in Detroit; Editing by Chizu Nomiyama and David Gregorio