Korean battery makers face wage hikes from U.S. workers

[Source : Ultium Cells]

Workers at Ultium Cells LLC, a joint venture established in the U.S. between LG Energy Solution Ltd. and General Motors Co., are demanding a significant increase in wages, which is expected to be joined by other unionized workers to challenge Korean firms setting up multibillion-dollar facilities in the country.

Unionized workers of Ultium Cells will have their first collective bargaining talks with the management this month, according to media outlets in the U.S. It is said that the labor union will ask for a raise in hourly pay to $32, doubling from the current pay that starts at $15.50 or $16.50, depending on the job. That would put their wage on par with the average hourly pay of $32 for traditional auto assembly jobs, according to the union.

The Ultium Cells labor union is a member of United Auto Workers (UAW), one of the largest industrial unions in the U.S. The UAW plans to set up labor unions at the second and third factories of Ultium Cells.

The UAW also represents auto workers at General Motors, Ford Motor Co., and Stellantis N.V., those automakers that Korean battery manufactures have either set up or planning to produce electric vehicle batteries in the U.S. under joint ventures.

Ford and SK on, one of three Korean EV battery majors, has a joint venture, named BlueOval SK. The joint venture began constructing the first and second EV battery plants in Kentucky last month, and it is due to break ground for another factory in Tennessee soon.

Stellantis and Samsung SDI have teamed up to establish an EV battery plant in Indiana. The auto giant also joined hands with LG Energy Solution, the largest EV battery maker in Korea, to build a factory in North America.

Industry experts expect workers at those EV battery joint ventures will also organize unions for collective bargaining, especially wage negotiation.

Factory worker pay is going up fast in the U.S. due to labor shortage, noted Cho Hyun-ryeol, an analyst at Samsung Securities Co. Korean firms setting up a joint venture in the U.S. should seek to increase automation to lower operational expenses, said Cho.