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LG Chem To Make Battery Cells In Michigan

Korean battery maker and its U.S. subsidiary Troy-based Compact Inc. will make battery cells for electric vehicles at a new $303 million plant in Holland, Mich.

HOLLAND, Mich. (AP) -- Korean battery-maker LG Chem Ltd. and its U.S. subsidiary Troy-based Compact Power Inc. will make battery cells for electric vehicles at a plant in western Michigan, the companies announced Friday.

At its peak, the $303 million factory in Holland will produce enough battery cells for 50,000 to 200,000 vehicle battery packs, including General Motors Co.'s Chevrolet Volt, the companies said in a statement.

Production at the 650,000-square-foot plant is expected to be fully operational in 2012 and create more than 400 jobs by 2013.

Groundbreaking for the facility, located on a 120-acre site in the city about 155 miles west of Detroit, is scheduled for this summer. It will be financed in part by a $151.4 million grant from the U.S. Department of Energy. LG Chem also will invest $151.5 million in the plant.

Jon Lauckner, GM's vice president for global product planning, said in an interview Friday that the plant is likely to get more work from GM because it has plans to spread gas-electric hybrid and electric vehicle technology further into its model lineup during the next five years. Just how far depends a lot on fuel prices and demand, he said.

"We certainly understand that the electrification of the vehicle goes beyond just talking about the Chevrolet Volt," he said. "We need a range of technologies and we have a plan that does that."

Vice Chairman Bob Lutz said Thursday that GM must apply hybrid technology to more vehicles in order to meet fuel-economy standards that will rise 40 percent to an average of 35 miles per gallon by 2020. The cost will likely be spread across GM's lineup, since charging individual buyers for a hybrid system would make vehicles too expensive. GM has seven hybrids in its lineup now.

While neither executive would give details of the models, Lauckner said the company's two-mode hybrid system which now is used in trucks and sport utility vehicles will be modified to fit into cars and other vehicles. GM also plans vehicles that run solely on electricity.

Lauckner said the Volt is on schedule to hit showrooms in November. GM says the car can travel 40 miles on a charge from a home power outlet. After that, a small internal combustion engine generates electricity power the Volt.

The Detroit factory where the Volt will be made is gearing up to begin production of a limited number of Volts for testing by engineers, Lauckner said. The company still would like to get a few Volts onto roads early for customers to use, but that depends on the production model testing, Lauckner said.

At the Holland plant, LG Chem will make six-inch by eight-inch battery cells that will be sent to a GM factory in Brownstown Township south of Detroit, where 250 to 300 cells will be assembled into 400-pound T-shaped battery packs for the Volt, Lauckner said.

LG Chem's lithium-ion technology eventually will replace older nickel-metal-hydride technology used in GM's current hybrid systems, Lauckner said. Lithium-ion batteries are smaller and can store more power.

"It makes sense to migrate all applications, or virtually all applications, where you have batteries to lithium-ion," Lauckner said.

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