Stellantis (NYSE:STLA) and South Korea's Samsung SDI (KS:006400) revealed on Wednesday the two companies their plans to establish a second electric vehicle battery facility in Kokomo, Indiana, which happens to be the hometown of United Auto Workers President Shawn Fain.
The union leader is presently engaged in a dispute with the Detroit Three automakers regarding union representation in new battery plant establishments.
Stellantis and SDI’s second collaborative battery factory in Indiana is on track to commence operations in 2027, potentially providing employment for 1,400 individuals. Samsung SDI, in a statement, mentioned that the combined annual production capacity at the Indiana site would reach 67 gigawatt hours (GWh).
The first joint facility is scheduled to begin production in the first quarter of 2025.
This announcement coincides with a challenging period for Stellantis, the parent company of Detroit's Chrysler, Jeep, and Ram truck brands, which is dealing with financial losses stemming from nearly four weeks of strikes by the United Auto Workers at a Jeep plant in Toledo, Ohio, as well as at parts depots throughout the United States.
Fain, who initially became a member of the UAW while working at one of Chrysler's Kokomo powertrain facilities, is insisting that Stellantis, General Motors (NYSE:GM), and Ford (NYSE:F) integrate their joint venture electric vehicle (EV) battery factories into the union's overarching agreements with these automakers.
Stellantis and Ford, however, have thus far remained firm in their position, contending that the battery ventures are distinct entities requiring more cost-efficient labor arrangements.
The establishment of a second U.S. battery plant by Stellantis would aid the company in meeting the requirements of the U.S. Inflation Reduction Act, which regulates the domestic content criteria for federal electric vehicle subsidies.
Shares of STLA are up 3.12% in pre-market trading Wednesday morning.