Economic Development

Where Will $2.3B Battery Plant Be Built in Lordstown?

LORDSTOWN, Ohio — So what greenfield site here have General Motors and LG Chem selected to build their $2.3 billion battery cell assembly plant? That piece of today’s big announcement remains unknown. No large land sales have been recorded to date, which leaves room for plenty of speculation.

The first guess is greenfield land that General Motors already owns at its former Lordstown Complex. As part of the automaker’s investment in the joint venture with the South Korean company, contributing vacant virgin land would make financial sense.

Or not. Sources confirm that in recent weeks LG Chem sent scouts to Lordstown to assess a number of sites in the village.

During a conference call this morning announcing the joint venture with the South Korean company, Mary Barra, CEO and chairman of General Motors, offered few specifics about the battery plant construction, instead focusing on GM’s electric vehicle strategy and its existing and future relationships with LG Chem.

Dan Crouse, a commercial real estate agent with Platz Realty Group, says if he had to pick the top three sites, they would be the Norfolk Southern land next to the plant and the Ohio Turnpike, the NorthPoint land to the east of the plant and the acreage GM owns near the two power plants in the village.

Land in Lordstown near the Lordstown Complex. Source: Platz Realty Group.

“These all make sense because they’re adjacent to the plant,” Crouse observes.

Groundbreaking is expected to take place in mid-2020, GM said. Battery cells from the plant likely will be shipped to factories where the electric vehicles are made, where they will be assembled into battery packs.

GM has promised that it would have 20 battery powered vehicles on sale globally by 2023.

GM has been working with LG Chem on electric vehicle batteries since 2009, shortly before the Chevrolet Volt rechargeable gas-electric hybrid went on sale. LG Chem currently supplies battery cells for the Chevrolet Volt fully electric vehicle.

Hak-Cheol Shin, LG Chem CEO, said the joint venture will reduce electric vehicle costs to the point where they can replace those powered by internal combustion engines.

“We believe by working together we’ll accelerate and get to industry leading cost levels,” Barra added.

In announcing the joint venture, Barra was asked if the 1,100 workers expected to be hired at the plant would be represented by the United Auto Workers.

“That’s up to the workforce because it’s a new facility,” she replied.

Will hourly compensation be comparable to UAW wages, $30 an hour?

“To be successful [in the electric vehicle market], we have to be competitive. So this will follow our component strategy. But obviously these are very well paying jobs,” she said.

Will former GM Lordstown employees who did not relocate be given preference for jobs at the joint-venture plant?

“This is a new entity and that will have to be worked through. But clearly we want to tap into the great workforce in Ohio,” Barra said.

As she underscored that all workers at GM Lordstown were offered jobs at other plants when the factory here closed in March, she praised the “very capable workforce” here and said the battery plant’s 1,100 jobs were earned by “the people of Ohio and the state … because of their capability.”

Barra acknowledged conversations are underway with state officials regarding incentives for the project “but we’re not going into any details on that.”

As for GM’s current relationship with Lordstown Motors Corp., which now owns the assembly plant, and a potential relationship once the joint venture is operating, Barra said there is none and nothing is planned.

“That’s not to say there couldn’t be something in the future. They have their own supply base and their own strategy and they are executing through that,” she said.

Ohio Lt. Gov. Jon Husted is flanked by General Motors Chairman and CEO Mary Barra and LG Chem Vice Chairman and CEO Hak Cheol Shin as GM and LG Chem announce a new joint venture that will mass-produce battery cells for future battery-electric vehicles .

Husted said the Lordstown area has plenty of land for the new factory, but would not disclose if a site had been picked. “The people in that part of the state will be very eager to make accommodations to make sure this facility is successful,” he said.

In a statement, U.S. Rep. Tim Ryan called the agreement “amazing news for the Mahoning Valley and all of northeast Ohio [that] speaks to the unwavering commitment, strong work-ethic, and innovative spirit of our community … Last month’s announcement that Lordstown Motors will build electric trucks here and today’s announcement that GM-LG Chem will manufacture electric batteries here, underscore the leading role our community will play in the electric vehicle revolution happening today,” he said.

Ryan’s vision falls in line with what the mayor of Lordstown says he’s hearing.

“We’re getting a lot of inquiries, generating a lot of interest from multiple sources,” Arno Hill said.

Electric vehicle related?

“I think it could be across the board,” he said. “We’re going to be a hot spot on multiple fronts next year.

Editor’s Note: The Associated Press contributed to this story.

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GM, LG Chem to Build $2.3B Battery Plant in Lordstown

Copyright 2020 The Business Journal, Youngstown, Ohio.