GM Battery Plant Offers EV Workers Higher Wages After Solvent Leak

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Union workers at Ultium Cells, a battery plant joint venture between General Motors (GM) and LG Energy Solutions, have won a "breakthrough agreement" to hike wages, the United Auto Workers union announced Thursday.

The interim deal will raise hourly pay for workers at the Lordstown, Ohio plant by 25% on average, and includes back pay to December 2022 for tenured workers. The agreement will now be put to a ratification vote by Ultium workers.

The proposed agreement comes one day after a chemical solvent leak at Ultium Cells. The company announced a "cathode mixing slurry leak" on Wednesday which was resolved after a temporary production halt. While there were no injuries or employee exposure from the incident, UAW has repeatedly criticized the plant's health and safety practices.

GM stock slumped earlier this month after the company warned investors that EV production was slowing due to issues producing Ultium battery packs. That follows a late July tumble following second-quarter earnings over similar battery pack concerns.

The tentative deal comes after months of negotiations that drew national attention—and the ire of Democratic politicians. Ohio Democratic Senator Sherrod Brown called the plant's $16 an hour rate "poverty-level wages" and a "national disgrace" at the end of July. Analysts see the Ultium deal as a benchmark for battery workers' labor rights as electric vehicles become more common.

Despite the wage hike, the proposed rate for battery workers is still lower than that of traditional UAW workers who assemble engines and cars. Those workers voted Friday to authorize a strike if an agreement isn't reached, which would cost the economy as much as $5.6 billion, according to one estimate.

Reuters. "US Agency Probes Chemical Spill at Battery Plant Owned by GM, LG Energy."

Reuters. "GM JV Battery Firm Rejects Including Ohio Workers Under National Agreement."

CNBC. "GM Battery Plant Workers to Vote on Union Representation in Labor Test for the EV Industry."

CNBC. "GM’s Ultium Agrees to Increase EV Battery Worker Pay by 25% on Average."