{"id":243202,"date":"2023-10-26T14:49:56","date_gmt":"2023-10-26T14:49:56","guid":{"rendered":"https:\/\/automotobuzz.com\/?p=243202"},"modified":"2023-10-26T14:49:56","modified_gmt":"2023-10-26T14:49:56","slug":"uaw-demands-may-jeopardize-detroit-and-koreas-28b-battery-plants","status":"publish","type":"post","link":"https:\/\/automotobuzz.com\/car-reviews\/uaw-demands-may-jeopardize-detroit-and-koreas-28b-battery-plants\/","title":{"rendered":"UAW Demands May Jeopardize Detroit And Korea's $28B Battery Plants"},"content":{"rendered":"

The United Auto Workers (UAW) strikes that started more than a month ago have been a major disruption for Detroit’s Big Three automakers.<\/p>\n

Logistics issues and costs aside \u2013 GM revealed on its Q3 2023 earnings call this week that every week of strikes costs it $200 million \u2013 the strikes also risk hurting Detroit Three’s agreements with major South Korean battery makers.<\/p>\n

LG Energy Solution, SK On and Samsung SDI have set up joint ventures with GM, Ford and Stellantis to build several battery cell plants in the U.S., and their combined investment is estimated at around $28 billion.<\/p>\n

The thing is those eight plants \u2013 four for General Motors, two for Ford, and two for Stellantis \u2013 are major hurdles in contract negotiations between Detroit carmakers and the UAW, which seeks to unionize the 19,600 people the battery joint ventures plan to hire at the new plants.<\/p>\n

According to Bloomberg<\/em> (via Automotive News<\/em>) citing Kim Kwang-ju, CEO of SNE Research, South Korea’s three biggest battery suppliers are anxious about the union pressing for substantial wage increases. Kim said the cost of running plants in the U.S. is already “about twice the cost of other regions.”<\/p>\n

That is why some companies, including component makers that have announced significant investment in the U.S., are reconsidering their plans, he added. Factor in falling battery prices and rising inventory due to weaker-than-expected demand for EVs, and things don’t look that good for the planned U.S. battery factories.<\/p>\n

<\/p>\n

Rendering of Ford and SK On’s BlueOval SK Battery Park in Glendale, Kentucky<\/p>\n

<\/svg><\/span>The Future Of Eight U.S. Battery Plants May Be At Stake<\/h3>\n

Of the eight battery plants from U.S.-South Korean joint ventures, only one is functional at the moment, the one GM and LG ES have built in Lordstown, Ohio, following a $2.3 billion investment. The facility employs 1,100 people.<\/p>\n

GM and LG ES have two more plants under construction, one in Spring Hill, Tennessee, estimated to cost $2.3 billion and hire 1,300 people when finished, and another in Lansing, Michigan, expected to cost $2.6 billion and employ 1,700 workers.<\/p>\n

General Motors has also announced a battery plant with Samsung SDI in New Carlisle, Indiana. Construction on the $3 billion facility is estimated to start next year; when complete, it will have 1,700 employees.<\/p>\n

Ford and SK On have two mega battery plants under construction in Glendale, Kentucky ($5.8 billion, 5,000 employees) as part of the BlueOval SK joint venture and Stanton, Tennessee ($5.6 billion, 6,000 employees), as part of the BlueOval City joint venture; the latter site will also build electric trucks.<\/p>\n

As for Stellantis, it has started construction of a $3.1 billion battery plant with Samsung SDI in Kokomo, Indiana, which is expected to open in Q1 2025. Recently, the joint venture announced plans to build a second plant at the same site, taking the total investment to $6.3 billion and the workforce to 2,800.<\/p>\n

With so much at stake, it’s understandable that Detroit Three’s South Korean battery partners are getting nervous because of the big increase in labor costs if the UAW gets its way.<\/p>\n

Still, the battery joint ventures will also receive lots of government funding through the U.S. Inflation Reduction Act. The climate bill will award companies billions of dollars in tax credits toward cell and pack manufacturing. In addition, the U.S. Department of Energy has offered to loan Ford and General Motors’ battery joint ventures a combined $11.7 billion.<\/p>\n

While these incentives were a key factor in South Korean battery makers’ plans to invest in the U.S., the IRA also comes with strings attached, such as reducing the reliance on China’s dominant low-cost supply chain. Finding alternatives is obviously immensely expensive.<\/p>\n

Add to this Tesla’s price war and the fact Ford and GM are delaying some EV investments, and South Korean battery manufacturers may pull the brakes on their aggressive investments in the U.S., according to Park Chul-Wan, an automotive professor at Seojeong University.<\/p>\n

<\/p>\n

Source: Bloomberg via Automotive News<\/span> <\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The United Auto Workers (UAW) strikes that started more than a month ago have been a major disruption for Detroit’s<\/p>\n","protected":false},"author":2,"featured_media":243201,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"yoast_head":"\nUAW Demands May Jeopardize Detroit And Korea's $28B Battery Plants - AutoMotoBuzz.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/automotobuzz.com\/car-reviews\/uaw-demands-may-jeopardize-detroit-and-koreas-28b-battery-plants\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"UAW Demands May Jeopardize Detroit And Korea's $28B Battery Plants - AutoMotoBuzz.com\" \/>\n<meta property=\"og:description\" content=\"The United Auto Workers (UAW) strikes that started more than a month ago have been a major disruption for Detroit’s\" \/>\n<meta property=\"og:url\" content=\"https:\/\/automotobuzz.com\/car-reviews\/uaw-demands-may-jeopardize-detroit-and-koreas-28b-battery-plants\/\" \/>\n<meta property=\"og:site_name\" content=\"AutoMotoBuzz.com\" \/>\n<meta property=\"article:published_time\" content=\"2023-10-26T14:49:56+00:00\" \/>\n<meta name=\"author\" content=\"mediabest\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/automotobuzz.com\/wp-content\/uploads\/2023\/10\/UAW-Demands-May-Jeopardize-Detroit-And-Koreas-28B-Battery-Plants.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"mediabest\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/automotobuzz.com\/car-reviews\/uaw-demands-may-jeopardize-detroit-and-koreas-28b-battery-plants\/\",\"url\":\"https:\/\/automotobuzz.com\/car-reviews\/uaw-demands-may-jeopardize-detroit-and-koreas-28b-battery-plants\/\",\"name\":\"UAW Demands May Jeopardize Detroit And Korea's $28B Battery Plants - 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