GM picks S. Korea's LG Chem to make Volt batteries

General Motors Corp. on Monday named LG Chem Ltd. of South Korea as the lithium-ion battery supplier for its Chevrolet Volt electric car, and the automaker also announced the seeds of what could become a battery development and manufacturing center in Michigan.

LG Chem will make the battery cells in Korea and ship them to the U.S., where they will be assembled into packs at an unspecified GM factory in Michigan, both companies said at the North American International Auto Show.

GM Chief Executive Rick Wagoner said the battery assembly facility will be the first in the U.S. operated by a major automaker.

LG Chem CEO Peter Kim said the company may eventually build cells in Michigan, and it anticipates that its U.S. subsidiary, Compact Power Inc., will add to its 100-person work force in Troy, Mich.

Volt vehicle line director Tony Posawatz said GM also will open a new battery lab at its Warren technical center. The 31,000-square-foot battery lab will be the largest in the U.S., GM said.

Posawatz said GM's ventures are likely to lure research facilities and factories from other electric vehicle parts suppliers.

"We have enough critical mass that future growth will cluster," Posawatz said.

Southeast Michigan around Detroit, he said, is the likely front-runner for the factory, which would be near the Volt assembly plant, an existing facility that straddles the border between Detroit and the tiny enclave of Hamtramck.

The new plant will employ more than 100 workers, said GM manufacturing head Gary Cowger. He would not give a specific figure but said the plant will be highly automated, in part because it must quickly weld the cells together to make battery packs.

"This is very high-speed kind of work," he said.

Any new jobs would be good news for Michigan, where the shrinking auto-dependent economy has led to a nation-leading 9.6 percent unemployment rate.

GM and the University of Michigan also announced the joint development of a battery research center at the Ann Arbor school. The center will train engineers in battery development and test batteries to improve their life and performance.

Wagoner said GM is integrating battery research and assembly into its mainstream to develop powertrains of the future.

"We believe this will become a competitive advantage for GM and will be critical to GM's success," he said.

Detroit-based GM had planned to name a battery supplier early last year but decided to keep working with two developers simultaneously to test their batteries under a variety of conditions. The other company that was in the running for the contract was Frankfurt, Germany-based Continental Automotive Systems, which is using cells developed jointly by GM and A123 Systems Inc.

Posawatz said GM chose LG Chem because of its flat-cell design that dissipates heat better and stores more energy than competitors' cylinder-shaped cells.

The competition from A123 Systems Inc. of Watertown, Mass., was very capable, Posawatz said, but "one has to be the lead."

LG Chem's Kim said the GM contract boosts his company's global presence.

"We now are a global player. We have many plants sited worldwide. So it would be possible to produce it in the United States in the future," he told The Associated Press in an interview.

The current LG Chem was established in 1947 and besides batteries, also produces petrochemicals. LG Chem is a member of the LG Group, a major South Korean industrial conglomerate with interests in areas including electronics, flat panels, telecommunications and logistics.

LG, once known as Lucky Goldstar, changed its name in 1995. The company's motto is "Life's Good."

LG Electronics acquired U.S. television manufacturer Zenith Electronics Corp. in 1995 and is known for its flat-screen televisions, mobile phone handsets, personal computers and household appliances, including refrigerators and washing machines.

Kim said LG Chem's lithium-ion battery chemistry uses manganese instead of cobalt, making it more stable than batteries made by other manufacturers.

"Our pack system is quite different," he said. "This is very safe. The release of the heat is good."

The Volt is designed to plug into a standard wall outlet and travel 40 miles on battery power alone. After that, a small internal combustion engine will kick in to generate power for the car.

The car is set to go on sale next year. GM hasn't announced pricing, but it is expected to cost $30,000 to $40,000 initially.

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AP Business Writer Kelly Olsen in Seoul, South Korea, contributed to this report.

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On the Net:

Chevrolet Volt: http://www.chevrolet.com/electriccar

(This version CORRECTS GM executive's name to "Posawatz" not "Poswatz")