By Michael Elkins
The Wall Street Journal learned today, citing people familiar with the situation, that plans for General Motors (NYSE:GM) and LG Energy Solution Ltd (KS:373220) to collaborate on a battery-cell factory have been shelved indefinitely. The report marks a pause in the growing partnership between GM and the battery supplier.
Recent talks between the companies’ executives ended without an agreement to move forward on what would have been the fourth U.S. battery plant to be developed by the companies through joint venture, Ultium Cells LLC. Ultium Cells is run by executives from GM and LG Energy who were dispatched to the joint venture. They operate a new plant in Ohio and are developing two others, one in Tennessee and one in Michigan, representing a total investment of more than $6.5 billion.
According to some of the people familiar with the matter, plans for the fourth factory were scratched in part because LG Energy executives in Korea were hesitant to commit to the project given the rapid pace of LG’s recent U.S. investments. In addition to the three joint factories with GM, LG Energy last year disclosed plans for a battery-cell plant with Stellantis NV (NYSE:STLA) in Windsor, Ontario, as well as a joint factory with Honda Motor Co Ltd (NYSE:HMC) to be built in Ohio.
Officials from the two companies also disagreed on the process for workers at the 900-employee Ohio factory to form a union, people familiar with the matter said. GM executives supported a so-called card check process, which is a less-formal and quicker path to unionizing than a confidential vote. LG executives rejected that idea and pressed to instead have the workers vote through a formal election.
In December, workers at the Ohio facility voted overwhelmingly to be represented by the United Auto Workers.
Shares of GM are up 0.57% in mid-day trading on Friday.