Ultium Cells Plant Anchors Opportunity To Build Supply Chain

LORDSTOWN, Ohio – The last year and a half has witnessed a 300-acre plot at the corner of Hallock Young Road and Tod Avenue being transformed into a village within a village.

More than 1,600 tradesmen are now on site at Ultium Cells LLC’s $2.3 billion electric-vehicle battery cell manufacturing plant in Lordstown – a joint venture between General Motors and Korea-based LG Energy Solution. In addition, more than 150 direct employees including engineers, launch team members, managers and design specialists are busy as the giant factory takes shape inside and out.

There’s more to come – much more, says Thomas Gallagher, vice president of operations at Ultium. “There are a lot of moving parts.”

Central to the long-term impact of the plant is the potential of building a supply-chain across the region to support Ultium’s operations, Gallagher says. “We’re going to have more than 100 different suppliers – when you consider products, services, spare parts, logistics and others,” he says.

Where these suppliers locate, Gallagher acknowledges, is a decision outside of Ultium’s control. He believes, however, there is ample opportunity to build a supply base near the plant. “The vertical integration of the supply chain is one phase that could occur,” he says.

In November 2020, Ultium acquired an additional 144 acres just south and west of where the plant is situated, nearly doubling the size of its footprint to more than 300 acres. 

Gallagher says the additional acreage is being used for parking and as a staging area for construction and equipment, which allows for more efficient movement of materials during the building phase.

Once construction is finished, that land presents a formidable opportunity to attract suppliers to Lordstown, Gallagher says. “It gives us opportunities to consider how we can look to the future of the site with our supply base,” he says. “I view it as a business opportunity for an integrated supply base, not for direct capacity.”

Future suppliers could come in the form of recycling operations, companies supplying raw materials used in EV battery cells, logistics, or mobile equipment providers, Gallagher says. 

Lordstown Mayor Arno Hill says Ultium recently contacted him regarding the possibility of locating a recycling operation near the factory. In May, Ultium announced that it has formed a partnership with Li-Cycle, a Canadian company that recycles EV battery materials. An Ultium spokesperson says no final decision has been made regarding the plant.

GM announced in December that it intended to form a joint venture with Korea-based Posco to construct a plant that would supply materials used in cathode production, the positive charge in battery cell manufacturing.

No site for the GM-Posco venture has been identified. Ultium is also building a second cell manufacturing plant in Spring Hill, Tenn., and is expected to construct a third plant in Lansing, Mich.

Thomas Gallagher, vice president of operations at Ultium, stands in a receiving area under construction inside the 2.8 million-square-foot plant. Production is on track to begin in August and ramp up to full capacity by the end of 2023.

Still, Ultium has attracted attention from other suppliers that have sought a presence in the Mahoning Valley. In November, LG Solution Partner LLC, a provider of equipment maintenance and software services for machinery used at Ultium, purchased the seven-story Niles Professional Building for $160,000.

The manager of the building, Jinnie Hong, says the company would employ about nine. It was acquired because of its proximity to the Lordstown Ultium plant.

“From what I understand, they’re one of the supply base used for maintaining processing equipment,” Ultium’s Gallagher affirms. “It’s positive for them to locate here. It made good business sense and we’re happy about that.”

Economic development agencies in the region have seized on the momentum built by Ultium and Lordstown Motors Corp., an electric-vehicle startup that operates from GM’s former Lordstown complex. Taiwan-based Foxconn purchased the Lordstown Motors plant in November for $230 million, opening the potential for several EV manufacturers to work inside the six-million-square-foot plant.

“We’re having ongoing serious conversations with those in the EV market,” says John Moliterno, CEO of the Western Reserve Port Authority. “Some have ties to GM and Ultium.”

Moliterno says the port authority can help to execute development deals because it owns title to land that could be put to productive use. Recently, the agency acquired more than 1,000 acres in Warren that was once the home of Republic Steel. The port authority now can control development at the site.

“Ultium has six or seven Korean companies they buy from and they want them to be within 30 miles,” Moliterno says.

Other initiatives to bolster an EV supply chain are underway. 

“One thing about Ultium and Foxconn is that it generates a buzz and develops a lead flow,” says Shea MacMillan, director, economic development projects for the Youngstown/Warren Regional Chamber. 

The chamber is among several partners that are collaborating to help build an electric-vehicle ecosystem throughout the Mahoning Valley. In particular, the chamber, along with Brite Energy Innovators in Warren, represents local involvement in a larger consortium that includes Team NEO, agencies in the cities of Akron and Cleveland, and Stark County.
The partnership successfully landed Phase I of the federal government’s Build Back Better Challenge and was the sole award winner from Ohio. Out of 560 applicants across the country, just 60 were selected for Phase I funding.

Phase I allocates $500,000 to support eight regional projects to prepare for a Phase II application, MacMillan says. A Phase II award would mean a $75 million grant for the projects – $8 million of which would be dedicated to the development of a battery research and development center in the Mahoning Valley, he says.

“The things we see happening now are just the tip of the iceberg,” says Rick Stockburger, CEO of Brite Energy, which is spearheading the battery R&D center. “As these plants get going, there’s an unbelievable amount of opportunity to focus on.  Our largest opportunity locally and in the United States is capturing the battery supply chain.”

Stockburger says securing that Phase I approval in the Build Back Better Challenge sends a loud message that the region is on the right track in pursuing an EV industrial cluster. “It’s the federal government nodding their head indicating that this is very real,” he says.

Stockburger says he’s in touch with startup companies from across the country that are seeking connections with EV entities such as Ultium, GM and Foxconn. “They want to be sure they’re designing the products of the future.”

Ultium’s Lordstown project is not only an anchor to future economic development initiatives across the Mahoning Valley, but also a testament to the revolutionary change underway in the global automotive industry.

General Motors, for example has stated it intends to invest $35 billion in electric and autonomous vehicles and launch 30 of these products by 2025. By 2035, the automaker promises that all-new light and heavy-duty vehicles will be electric-powered.

“We plan to convert more than 50% of our manufacturing footprint in North America and China to EV production by 2030,” GM Chairwoman Mary Barra said Jan. 5 during a virtual keynote address at the 2022 Consumer Electronics Show in Las Vegas.

Underlying GM’s efforts is the Ultium platform.

“We believe we have one of the most vertically integrated supply chains for battery production in the industry,” Barra said, making reference to Ultium’s Lordstown and Tennessee plants. Barra also said GM is taking steps to improve its semiconductor supply chain.

“These actions on semiconductors and our new battery plants are all part of a broader initiative to build a more secure EV supply chain,” she said.

The Ultium plant in Lordstown is in many ways a case study on how to navigate the challenges of a global supply network, particularly during a pandemic that has stalled deliveries worldwide and driven costs higher.

“The biggest challenges remain logistics,” Ultium’s Gallagher says. To maintain control of point-to-point delivery, Ultium specifically chartered eight container ships from ports in Asia, the ships filled with components and equipment dedicated to the Lordstown project.

“We’ve had to use 10 different ports in the U.S. and Canada to get parts ashore,” he says. “By chartering, we can bring as many as 300 containers on a dedicated vessel to our site on our own plan. That’s been a unique challenge. GM and LG – they’ve never experienced this.”

Other logistics challenges included tracking domestic shipments on rail and truck. “We’re managing through the complexities,” Gallagher says.

While supply chain issues have led to cost hikes, construction on the plant remains on schedule and production should begin this summer, he says.

The exterior of the 2.8 million-square-foot plant is 95% complete, Gallagher says, while equipment installation is in its infancy.

The factory will manufacture battery cells used to power the next generation of GM electric vehicles. Production is on track to begin in August and ramp up to full capacity by the end of 2023, according to Gallagher.

The plant is expected to employ about 600 full-time by the end of 2022, and more than 1,100 once the complex reaches its production stride by the end of 2023, he says.

More than 6,000 job applications have been received.

The plant itself is among the most sophisticated and largest of its kind. Indeed, a wide corridor that bisects the entire complex stretches a half-mile. Behind the walls of the long aisle, process equipment such as mixing systems for anode and cathode charges, coating lines and rolling machinery are being installed.

Once the cells are manufactured, they will be sent to GM’s Factory Zero in Hamtramck, near Detroit, where they are assembled into modules and then grouped into packs.

“We’ll have some earlier production batteries used for validation during the second quarter,” Gallagher says. The first batteries produced from Ultium’s Lordstown plant will power the new EV Hummer, in production at Factory Zero.

“We’re building a business, building a team, and building a plant,” Gallagher says. “It’s exciting.”

Pictured: Two Ultium Cells employees take stock of plant machinery and fixtures that await installation at the 2.8 million-square-foot Ultium Cells plant in Lordstown.