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Holland gets battery plant for Volt
3/12/2010
Alisa Priddle / The Detroit News
Battery-maker LG Chem Ltd. of Korea, through its North American subsidiary Compact Power Inc., will start producing battery cells for vehicles including the Chevrolet Volt in Holland by 2012.
Today's announcement that a $303 million, 650,000-square-foot plant will be built in Holland fulfills the promise the lithium-ion batteries will be built in Michigan. When LG Chem was chosen as the first battery supplier for General Motors Co., the company better known for cell phones said it would export the battery cells from South Korea until North American production could commence.
Groundbreaking is set for this summer, and the plant is slated to be fully operational in 2012.
The number of jobs created will be about 50 initially but will increase to more than 400. They will make 15 million to 20 million battery cells a year, enough for 50,000 to 200,000 battery packs a year.
The cells will be transported to GM's facility in Brownstown Township where they are assembled into T-shaped packs designed to fit into the Volt, which goes on sale in the U.S. in November and will be exported to Canada, Europe and China in the second half of 2011, said Tony Posawatz, GM's vehicle line director for global electric vehicles including the Volt.
Some of the cost of the plant will be covered by a $151.4 million Department of Energy grant LG Chem received last year but the Korean company also will invest $151.5 million in the Holland facility.
The impact of producing batteries locally "is huge, from a number of perspectives," Posawatz said.
First, there's the question of logistics. "You can't put cells on planes," Posawatz explained. They require careful, temperature-controlled packaging for transport by ship, which takes weeks, and are subject to tariffs and duties -- adding hundreds of dollars per vehicle.
Also, there's the importance of the battery cells to GM's e-flex program, which includes the Volt, the 2012 Opel Ampera and a right-hand-drive Vauxhall version.
GM is expected to decide soon what other style of vehicle will get the Voltec system. Compact Power has the contract for what originally was to be an electric Saturn Vue. When the crossover was killed from GM's portfolio, the technology was to go into a Buick crossover -- but it, too, was killed.
"The next vehicle is still confidential," Posawatz said.
The cells also will be used in non-plug-in hybrids as the technology in some of GM's trucks spreads to its car lineup.
Gov. Jennifer Granholm lauded today's announcement.
"Thanks to a bold vision and aggressive strategy, Michigan is now the leader of the U.S. advanced-battery industry," she said.
"There are defining moments in any community's history," said Holland Mayor Kurt Dykstra, whose city began courting LG Chem a year ago.
"I believe that years from now, today's announcement will be viewed as one of those moments for Holland, Michigan."
Johnson Controls-Saft also is establishing a battery cell plant in Holland. Production at that plant could begin at roughly the same time as at LG Chem.
Governments in Asian countries made battery and electric vehicle production a priority in a way the U.S. government had not, Posawatz said.
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