THE ROAD AHEAD FOR GENERAL MOTORS – AUTOMOTIVE INDUSTRY

The General Motors strike rolls on, but its ultimate conclusion carries some interesting possibilities.

Lordstown, Ohio, the former assembly site of the Chevrolet Cruze (closed out in March, 2019) is playing out as a battleground in the UAW strike, but interestingly has also been mentioned as a possible location for plans to build a battery-cell factory (ref WSJ).  If this does, indeed, come to pass, it would be the first investment by a Detroit automaker in battery cells, which are currently the near-exculsive purview of East Asian companies, such as South Korea (which currently supplies GM) and China.  It’s expected that GM’s effort would be a joint venture, with a company that has expertise in battery-making.  GM has made the offer of union representation at a factory that otherwise wouldn’t have it.  And, in addition, the union would be “getting a toehold in what is expected to be the technology of the future,” (ref WSJ).  At present, it’s said that the UAW isn’t responding favorably to the offer because GM isn’t planning on paying cell-production workers a wage akin to what assemblers at Lordstown got when they made the Chevrolet Cruze.  Currently, ongoing negotiations with the UAW do not formally include the Lordstown battery option.  But, it actually sounds like an opportunity too good to miss out on.  Even if the new battery plant doesn’t include union representation,  a battery cell plant would be a “milestone on the road to Detroit’s road to electrification,” (ref WSJ).  Volkswagen and Toyota, top-selling European and Asian automakers, have announced major investments in battery cell production in 2019, through joint ventures.  Should GM go ahead with plans for the plant they would be a third top-selling automotive company to join in those ventures.  Behind the promotion of this effort is the worry that China is cornering the resources required to make a product essential to the future of both the energy and auto industries.  China’s push in recent years in this area has them in the position of making two-thirds of the world’s battery cells.  Batteries are said to hold the promise of helping to wean the world off of oil, but that will only be true if there are inroads made into China’s domination of the battery-making production.

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