GM, LG Energy Solution to divvy up state subsidy, still pledge 3,200 new jobs

• Michigan had to ‘decouple’ its first mega-subsidy deal to allow General Motors to sell one of two factories that shared a $600 million incentive
• GM is transferring $120 million in incentives to LG Energy Solution
• Both companies say they’ll still reach the goals of a combined 3,200 new hires

Despite two years of delays, the two giant electric vehicle factories funded through Michigan’s first mega-subsidy deal are still expected to create more than 3,000 new jobs — but the facilities will now have separate owners.

The renewed hiring pledges come as the state on Tuesday allowed General Motors to transfer $120 million in state funding and the incentive terms for its former Ultium Cells EV factory near Lansing to factory buyer LG Energy Solution Michigan.

The move clears the way for LG Energy Solution to close on its purchase of the 2.8 million square foot battery factory that GM built in Delta Township.

And it leaves General Motors responsible for meeting new hiring goals at its expanded Orion Assembly plant, construction funded in part by $480 million in taxpayer money.

“By all accounts, the two projects … are on track,” said Michelle Grinnell, senior vice president of market growth for the Michigan Economic Development Corporation (MEDC).

Related:

• GM sells stake in Michigan EV battery factory subsidized by state
• ‘This is the big one.’ Michigan celebrates landmark $7B GM investment
• Gov. Whitmer’s SOAR incentive fund, once a triumph, now faces headwinds
• Michigan bet billions on EV jobs. But delays, layoffs may diminish returns

Combined, the two companies are still obligated to deliver 3,200 jobs in exchange for the already-spent $600 million in state funding awarded in January 2022.

Authorization came Tuesday during a unanimous vote of the Michigan Strategic Fund, the public funding arm of the MEDC. To meet the new terms of the decoupled deal: 

• GM will need to hire 1,840 workers at Orion Assembly. Wages originally were to be about $27 per hour, but will be set by United Auto Worker contracts.
• LG Energy Solution will need to hire 1,360 at the former Ultium site near Lansing. The company estimates wages of about $55,000 per year for manufacturing workers.

“We fully plan to meet all of our commitments,” George Cook, a Midwest regional director of state and public policy for GM, told the Michigan Strategic Fund board Tuesday morning. 

The statement was echoed by Lisa Niscoromni, director of government affairs for LG Energy Solution. She also noted that the company was familiar with the factory and its capabilities because the Michigan-based company is a part of the South Korean company that partnered with GM in the Ultium brand.

With the factory under LG Energy Solution ownership, it can produce products for customers outside of the single-focus Ultium line, Niscoromni said.

“As sole owner and operator of the Lansing battery cell plant, we can serve a diverse set of customers,” she said. In addition, the company can make products outside of EV batteries, including “batteries for stationary energy storage systems and electronic devices,” she said.

The decoupling of the subsidy award comes as the EV industry faces ongoing challenges in sales growth and federal policy changes. 

Sales, policy challenges

The Trump administration this month announced plans for sweeping rollbacks of federal environmental regulations that would have huge implications for Michigan’s auto, energy and industrial sectors. Changes include a vow to reconsider emission standards to speed the transition to electric vehicles.

The move also comes as EV sales, while increasing overall, have failed to meet projections by automakers, leaving the companies with excess new capacity.

EV sales in February increased 10.5% from a year earlier, but they represented an overall market share of under 8%. 

Meanwhile, although both state Republicans and Democrats originally cheered the GM/Ultium subsidy — which also included $66 million in infrastructure upgrades and a promised Renaissance Zone tax break — the megadeals now face significant bipartisan headwinds.

The award came under the then-new  Strategic Outreach and Attraction Reserve (SOAR) Fund, a bipartisan fund initiated by Gov. Gretchen Whitmer that allocated $2 billion toward large-scale economic development. 

Most of the SOAR deals were for EV battery factories that promised thousands of jobs. But that was before the EV industry’s growth sputtered, creating delays and raising questions among legislators about the value of the projects.

The two factories had created far fewer than the forecast 3,200 new jobs as of Sept. 30, according to state documents that Bridge obtained under the Freedom of Information Act. 

A total of 148 jobs were listed at the former Ultium facility, at an average salary of $84,000. However, 289 were working at GM’s Orion Assembly factory, more than 700 fewer than the “base” number set by the subsidy deal. 

GM, meanwhile, was retooling Orion Assembly for its Silverado EV launch in 2024, a move delayed until 2026. Still, some battery assembly work is being done by workers who’d already been employed by GM.

“When production begins, Orion will be one of GM’s most advanced facilities, with several new technologies being implemented for the first time there,” Cook told the strategic fund board on Tuesday.

Truck production will add 500 workers, some of whom will be new hires in the skilled trades, according to documents. 

“In 2026, there will be a need to bring on another 500-700 employees to meet the mid-2026 launch timing,” GM told the state. Another 1,000 or so are expected to be needed by the end of 2026 for the 2nd shift Silverado launch. 

The former Ultium building cost $432.2 million as of fall 2024, the company told MEDC officials. At that time, Ultium said, installation of equipment to date was valued at $608.1 million.