Stellantis Plans to Establish a Second Battery Plant

Stellantis plans to establish a second battery plant in a town where the presence of electric vehicles poses a threat to existing jobs. The Company, Stellantis and Samsung intend to construct a second EV battery plant in Kokomo, Indiana, a town where many of Stellantis’ current workers perceive such plants as a potential threat to their existing jobs.

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Stellantis Plans to Establish a Second Battery Plant

EV battery plants are a crucial element of traditional automakers’ strategies to shift from gasoline-powered cars to electric vehicles in the upcoming decades. However, they may pose a challenge to current jobs related to engine and transmission production, which are unnecessary in an EV. In Kokomo alone, Stellantis operates four plants focused on building engines and transmissions, providing employment to over 5,000 hourly workers.

Stellantis, known for manufacturing cars under the Jeep, Ram, Dodge, and Chrysler brands, along with unionized competitors General Motors and Ford, find themselves in the fourth week of a strike led by the United Auto Workers union. The focal point of the strike revolves around the prospects of jobs in EV production.

Although the four Kokomo plants are not participating in the strike, the union is currently on strike at Stellantis’ assembly complex in Toledo, Ohio, as well as at 20 parts and distribution centers situated across 14 states.

All automakers are actively constructing EV battery plants, and they’ve formed joint ventures with battery manufacturers like Samsung to establish and operate these facilities. They’ve all maintained that the employees at these plants will be associated with the joint ventures, not the automakers directly. Additionally, the compensation at EV battery plants in the United States that have already opened is considerably less than what UAW members typically earn when employed by automakers.

UAW President Announces GM’s Commitment to Include EV Battery Plant 

On Friday, UAW President Shawn Fain revealed that GM had accepted a crucial union request: to include employees at its EV battery plants in the company’s national master labor agreement with the UAW. GM has not officially confirmed this agreement, and the specifics regarding the workers’ compensation and their status as GM employees or employees of separate companies are still uncertain.

Fain celebrated the agreement as a significant victory for the union and expressed the intention to urge Ford and Stellantis to adopt similar terms if they wish to bring an end to the strike.

Following that announcement, Samsung and Stellantis disclosed their intentions for their most recent battery plant.

On Wednesday, the two companies declared their investment of over $3.2 billion in constructing the new plant. It is scheduled to commence operations in early 2027 with an annual capacity of 34 gigawatt hours. This opening will create approximately 1,400 new jobs in Kokomo, situated an hour north of Indianapolis.

StarPlus Energy, a joint venture established by Samsung and Stellantis, had previously selected Kokomo for its first gigafactory, currently under construction and set to open in 2025.

Collectively, these two facilities will yield 67 gigawatt hours each year. Indiana Governor Eric Holcomb commented in a press release, “Indiana’s economy is thriving,” and noted that the second plant signifies a doubling of capital investment and the number of new jobs being generated.

These factories will assist Stellantis in achieving its objective of having battery electric passenger cars account for 100% of its sales in Europe and 50% of its sales in the US by 2030. In 2021, Stellantis disclosed an “ambitious” investment of $35 billion for electric vehicle production and requires 400 gigawatt hours annually to meet its 2030 target.

Stellantis came into existence in 2021 following the merger of Fiat Chrysler and PSA Group, the manufacturer of Peugeot, Citroën, Opel, and Vauxhall cars in Europe. In premarket trading, shares experienced an almost 2% increase.

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