In Kokomo, Indiana, the hometown of United Auto Workers President Shawn Fain, Stellantis (STLAM.MI) and South Korea’s Samsung SDI Co Ltd (006400. KS) announced on Wednesday that they will construct a second electric car battery facility there.
The Detroit Three automakers and the union head are now at odds over union participation at new battery plants.
According to Stellantis and SDI, their second joint battery facility in Indiana is expected to open in 2027 with a potential workforce of 1,400 people. According to a statement from Samsung SDI, the two businesses would have a combined annual production capacity of 67 gigawatt hours (GWh) at the Indiana production site.
Production at the first joint facility is anticipated to begin in the first quarter of 2025. The news comes as Stellantis, the company that owns Detroit’s Chrysler, Jeep, and Ram truck brands, is struggling to recover from losses caused by the United Auto Workers’ almost four-week-long strikes at a Jeep factory in Toledo, Ohio, and at parts depots around the country.
Fain requests that Stellantis, General Motors, and Ford bring their joint venture EV battery facilities under the union’s master agreements with the automakers. Fain joined the UAW as a worker at one of Chrysler’s Kokomo powertrain plants.
The battery initiatives are different businesses that require lower labor expenses, according to Stellantis and Ford, who have so far refused to budge.
The UAW and the carmaker have not released any information on the arrangement, including how much the workers at the battery plants will be paid, since GM agreed last Friday to put its joint venture battery operations under its master contract.
In August, UAW-represented employees at GM’s joint venture battery facility in Lordstown, Ohio, earned raises that averaged 25%, and they now get $20 per hour, which is still much less than the $32 maximum salary at GM assembly factories.
For Stellantis, a second U.S. battery facility would aid the firm in adhering to domestic content regulations set forth by the U.S. Inflation Reduction Act, which controls government EV subsidies.
Last month, Samsung SDI said it would spend 2.7 trillion won ($2.01 billion) on constructing its second joint battery factory with Stellantis.
By 2030, Stellantis, a company whose brands include Peugeot, Jeep, Ram, Alfa Romeo, Citroen, and Opel, wants to sell only electric passenger cars in Europe and a mix of 50% electric cars and light trucks in the United States. It has stated that it needs to obtain 400 GWh of battery capacity.
