Cars? Jobs? Yes Maybe
Bloomberg Businessweek|November 15, 2021
Lordstown, Ohio, is getting a new factory making batteries for electric vehicles, but it will employ less than one-third as many workers as the auto plant it’s replacing
David Rocks

It’s just after 2 p.m., and Justin Brown is waving down the bartender at Ross’ Eatery & Pub, a dimly lit dive in the shadow of the old General Motors Co. assembly plant. It isn’t hard to get her attention. The crowds have thinned since GM closed the factory two years ago, cutting about 3,300 workers and striking another blow to Lordstown and other cities in northeastern Ohio still reeling from the loss of highly paid steel jobs in the 1980s.

When the plant closed, Brown was transferred to a GM facility in Missouri, though he frequently makes the nine-hour drive in his Lordstown-built Chevrolet Cruze to help his aging parents and look after his house. Furloughed because of a semiconductor chip shortage, he’s back in Lordstown on a balmy afternoon with plenty of time to ponder whether to stay at GM or return home for a shot at a job that would require months of training and a pay cut of 30% or more.

Less than a mile from Brown’s barstool, construction crews are building a $2.3 billion battery plant in an empty field just behind the old GM site. The blindingly white expanse of concrete, the size of 30 football fields, stands at the center of U.S. efforts to compete in the global race for electric vehicles. A joint venture between GM and South Korea’s LG Chem Ltd., it will be just the second such facility in the U.S., after Tesla Inc.’s battery factory in Nevada. The company, Ultium Cells LLC, is a separate entity from the Detroit automaker, so Brown’s 13 years at GM are worth less than the can of beer in his hand. If Ultium were to hire him at all.

The battery maker has announced plans to bring on roughly 1,200 workers for the factory’s planned opening next summer, about a third of what GM had when it started winding down its plant five years ago. Sure, 1,200 jobs in a brand-new industry is a lot for a place like Lordstown. But the question is whether this emerging industry will be able to provide the vast numbers of well-paid positions that have defined the American auto industry for the better part of a century. EVs contain fewer parts, require fewer assembly-line workers, and use many components from nonunion companies in Asia, putting the livelihoods of 135,000 autoworkers—almost a fifth of the industry’s U.S. workforce—at risk.

The facility in Lordstown, about halfway between Cleveland and Pittsburgh, will be a key part of a growing EV ecosystem in the U.S. At least a half-dozen other battery plants are in the works, and by 2025 there will be 44 factories making electric cars in North America, up from 14 today, according to researcher LMC Automotive.

Hanging in the balance are workers such as Brown, 44, who once saw GM as a ticket to the middle class but harbor doubts about an electric future, which will frequently require a different set of skills. “Am I the type of person who would be able to get into that plant and work?” Brown asks, sipping a freshly cracked can of Milwaukee’s Best, seeming to address the six-point buck whose head hangs on the wall behind the bar. “Would I return for half the pay? I don’t know.”

Just three years ago, GM announced it would halt production of the subcompact Cruze and shutter its assembly plant in Lordstown. Although employees were offered jobs at other GM facilities, the shutdown was a blow to the region and infuriated then-President Donald Trump, who’d urged workers in the area to stay put in expectation of better times. That didn’t happen. But to help the area after the assembly plant was shut, GM in late 2019 said it would use the Lordstown site for the venture it was planning with LG, which had a wealth of experience in battery production and could aid the American company’s efforts to gain traction in EVs.

Ultium says laborers at the plant will earn $16 to $22 an hour. That’s in line with wages in the area, but well below the $27 an hour that a single parent would need to support a child, according to a study by the Massachusetts Institute of Technology. And it’s no match for what union assemblers earn at GM plants, where pay starts at $19 an hour and tops $32 within four years, though Ultium says such comparisons don’t take into account health insurance and other benefits workers at its factory will receive.

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