GM CEO Mary Barra Talks New Deal With LG Chem for EV Battery Production

December 5, 2019

Mary Barra, chairman and CEO of GM, and Hak-Cheol Shin, vice chairman and CEO of LG Chem, discuss their companies' new partnership in the electric vehicle space.

FULL TRANSCRIPT

FEMALE_1: Welcome back to Cheddar Business,

FEMALE_1: Electric news breaking from the auto world today,

FEMALE_1: General Motors and LG Chem announcing plans to mass

FEMALE_1: produce battery cells for future electric vehicles.

FEMALE_1: The two companies are going to create more

FEMALE_1: than 1,100 jobs in

FEMALE_1: a new Ohio facility and

FEMALE_1: invest more than two billion dollars collectively.

FEMALE_1: Joining us now live from Warren,

FEMALE_1: Michigan is Mary Barra,

FEMALE_1: chair and CEO of GM and Hak-Cheol Shin,

FEMALE_1: vice chair and CEO of LG Chem.

FEMALE_1: It's great to have you both with us.

FEMALE_1: Uh, Mary, we'll start with you.

FEMALE_1: Why was LG Chem the right partner in this joint venture?

MARRY BARRA: We have a long relationship of working with

MARRY BARRA: LG Chem and they truly bring,

MARRY BARRA: um, battery expertise that I think is industry leading.

MARRY BARRA: So we're looking to continue to build on

MARRY BARRA: a strong partnership and we think this

MARRY BARRA: will accele- accelerate our path

MARRY BARRA: to a winning in the electric vehicle market.

FEMALE_1: Uh, Mary, speak to us more about

FEMALE_1: the batteries that are going to be

FEMALE_1: produced at this plant.

FEMALE_1: Are they exclusively for your cars or you can be

FEMALE_1: producing batteries there for other competitors as well?

MARRY BARRA: Well, right now, we're focused on,

MARRY BARRA: uh, po- uh, providing, uh,

MARRY BARRA: cells for General Motors, uh,

MARRY BARRA: plant electric vehicles as we go forward,

MARRY BARRA: but this is a joint venture.

MARRY BARRA: So we're obviously going to do

MARRY BARRA: what's in the best interest of

MARRY BARRA: the joint venture and the two companies working together.

MALE_1: Yeah. Hak-Cheol, to that point,

MALE_1: how do you thread this needle between being a partner

MALE_1: with other auto manufacturers

MALE_1: in their quest to go fully electric?

MALE_1: Bloomberg reported, for example,

MALE_1: that you're partnering with Tesla

MALE_1: at its Shanghai Gigafactory,

MALE_1: but also be a good partner to GM.

HAK-CHEOL: So, uh, like Mary pointed out,

HAK-CHEOL: we have been working together for more than 10 years,

HAK-CHEOL: uh, starting from Chevrolet Volt.

HAK-CHEOL: So- so we know each other very well.

HAK-CHEOL: Uh, LG Chem has been developing and

HAK-CHEOL: commercializing battery since 1995.

HAK-CHEOL: So we have 25 years of history of,

HAK-CHEOL: uh, of battery technology development.

HAK-CHEOL: LG Chem is bringing

HAK-CHEOL: the best battery technology to the joint venture.

HAK-CHEOL: We are very pleased and honored to do that,

HAK-CHEOL: uh, with, with the Leading General Motors

HAK-CHEOL: in the state of Ohio, uh,

HAK-CHEOL: to share, uh, and to fulfill the dream of General Motors,

HAK-CHEOL: uh, in terms of all electric future.

HAK-CHEOL: So we are very pleased and honored.

FEMALE_1: It does sound like, Mary,

FEMALE_1: that it is going to be up to the facility there, right,

FEMALE_1: the plant and the ownership as to whether or

FEMALE_1: not this will be unionized work.

FEMALE_1: We know Tesla's Gigafactory,

FEMALE_1: for instance, is not unionized.

FEMALE_1: And so how do you plan to compete, uh,

FEMALE_1: with companies like Tesla that are-

FEMALE_1: that are doing this without unionization?

MARRY BARRA: Well, we compete today with

MARRY BARRA: a represented workforce and we

MARRY BARRA: have very talented men and women across,

MARRY BARRA: uh, across the United States and across the globe.

MARRY BARRA: So and this specific facility,

MARRY BARRA: because it's a joint venture that people who work there

MARRY BARRA: will decide on union representation.

MARRY BARRA: But, you know, we compete, uh,

MARRY BARRA: today and we plan to compete and

MARRY BARRA: have industry leading, uh,

MARRY BARRA: cost winning technology and-

MARRY BARRA: and winning the marketplace with customers.

MALE_1: Mary, you've been on the receiving end of, uh,

MALE_1: some tweets from the president, uh,

MALE_1: about closing, uh, plants in the past.

MALE_1: Um, what type of political pressure did you feel you were

MALE_1: under in order to bring jobs back to Ohio?

MARRY BARRA: Well, I think when we look at, um,

MARRY BARRA: Ohio, we're looking at a very capable workforce.

MARRY BARRA: We know that from, uh,

MARRY BARRA: the great me- men and women who work

MARRY BARRA: at Lordstown and each of them were

MARRY BARRA: offered positions in our other plants.

MARRY BARRA: So we think there's a, uh,

MARRY BARRA: very strong workforce there and we are,

MARRY BARRA: as a company committed to

MARRY BARRA: the communities in which we live and work.

MARRY BARRA: So this was a natural place to look,

MARRY BARRA: to have a talented workforce.

MARRY BARRA: Uh, we have a great, uh,

MARRY BARRA: relationship with the state of Ohio

MARRY BARRA: and so we're excited to be there.

MALE_1: Were there any sort of incentives

MALE_1: offered by the state of Ohio,

MALE_1: uh, to bring this to fruition?

MARRY BARRA: Uh, You know, we're not

MARRY BARRA: going to talk about the specifics,

MARRY BARRA: but we did have discussions and they

MARRY BARRA: supported, uh, this joint venture.

FEMALE_1: Ah, Hak-Cheol, we have

FEMALE_1: yet to get a trade deal between the US

FEMALE_1: and China obviously impacting global growth.

FEMALE_1: Has that caused you to change your projections, uh,

FEMALE_1: for anything related to business,

FEMALE_1: uh, here in the new year?

HAK-CHEOL: As you know, the electric vehicle

HAK-CHEOL: is proliferating around the world in

HAK-CHEOL: the United- United States is growing at

HAK-CHEOL: the rate of 26 percent per annum.

HAK-CHEOL: On a worldwide basis,

HAK-CHEOL: this market- the electrification of

HAK-CHEOL: vehicle market is growing at the rate

HAK-CHEOL: of 35 to 38 percent.

HAK-CHEOL: Also, we, we think this is a re- remarkable, uh,

HAK-CHEOL: trend that has taken place and we are very glad,

HAK-CHEOL: uh, to be on the top of that,

HAK-CHEOL: uh, with General Motors.

FEMALE_2: Mary and to you,

FEMALE_2: has GM changed its projections at all for

FEMALE_2: the year 2020 as we still do not

FEMALE_2: have a phase one trade deal with China?

MARY: Uh, you know, we are, uh,

MARY: working to, to maximize across

MARY: the globe for all the markets that we compete in.

MARY: We have a very strong position in China.

MARY: We, we lead in the United States

MARY: and we plan on continuing to build on that.

MALE_2: Mary, I wanna get your thoughts on

MALE_2: Tesla- Tesla cyber truck specifically.

MALE_2: GM, of course, is a leader, uh,

MALE_2: when it comes to pickup trucks.

MALE_2: What were your thoughts when you saw

MALE_2: this cyber truck unveiled recently?

MALE_2: And do you anticipate with

MALE_2: 250,000 deposits at this point, uh,

MALE_2: that the cyber truck will eat into shares,

MALE_2: uh, share of GM that it has in the market?

MARY: General Motors has an incredibly strong truck franchise

MARY: and we know what's important

MARY: to our customers from

MARY: functionality and all aspects of full-size trucks.

MARY: So it's something I'm very proud of.

MARY: Our Chevrolet Silverado and Chev-, uh,

MARY: and GMC Sierra are doing very well,

MARY: both light duty and heavy duty.

MARY: So we're gonna build on that experience with

MARY: our battery electric truck that we will

MARY: be sharing in the not too distant future,

MARY: uh, that will start production in the fall of 2021.

MARY: We're very excited about it.

MARY: I'm excited to get the customer response when

MARY: we are able to reveal the, the vehicle.

MARY: Uh, so I think it's important what customers

MARY: think and how customers are gonna use the vehicles,

MARY: and again, building on our very strong truck franchise-

MALE_2: Right.

MARY: -and our leadership position.

MARY: I'm, I'm looking forward to, uh, to competing.

MALE_2: Was- as a competitor, what were

MALE_2: your thoughts when you saw that, that thing unveiled?

MALE_2: I mean, many said this looks

MALE_2: like something that belongs on Mars,

MALE_2: not on the streets.

MARY: Uh, you know, it's really not

MARY: important what I think personally,

MARY: it's important what customers think.

MARY: So, uh, we'll let the market de- decide as we go forward.

FEMALE_2: Hak-Cheol, with this particular plant

FEMALE_2: in Lordstown for the electric vehicles, uh,

FEMALE_2: for the electric batteries, that is,

FEMALE_2: how involved are you gonna be on a day to day basis,

FEMALE_2: or perhaps it's more of a quarterly basis?

HAK-CHEOL: Right. I, I think we have

HAK-CHEOL: a very capable team working on, uh,

HAK-CHEOL: day to day operation,

HAK-CHEOL: both from LG CHEM and General Motors.

HAK-CHEOL: I'm very, uh, you know, I'm very, uh,

HAK-CHEOL: optimistic about the operation

HAK-CHEOL: of joint venture on day to day basis.

HAK-CHEOL: Uh, we can get involved in some management win and,

HAK-CHEOL: uh, every time is needed.

HAK-CHEOL: So I think we are all here together as a team.

HAK-CHEOL: I'm very glad to see

HAK-CHEOL: the teamwork between General Motors and LG CHEM.

FEMALE_2: Uh, Mary, last question to you.

FEMALE_2: Uh, your stock, uh, peaked to just about two years ago.

FEMALE_2: It's down about 16 percent since then

FEMALE_2: even as the overall market has climbed higher,

FEMALE_2: how are you gonna revitalize the stock price?

MARY: You know, we're just gonna keep focusing

MARY: on our core business and on

MARY: leading in the future of mobility

MARY: with, uh, electric vehicles.

MARY: So what we're announcing today is very,

MARY: very important as we continue to, uh,

MARY: launch more electric vehicles along

MARY: with our autonomous vehicle business,

MARY: and then the strength that we have in the truck market,

MARY: uh, with Cadillac going forward.

MARY: So we're gonna keep executing our plan,

MARY: and uh, you know,

MARY: we believe that we will demonstrate that we are,

MARY: uh, uh, able to,

MARY: to provide not only growth but great returns and

MARY: value for our shareholders and

MARY: that's what we work on every day.

MALE_2: And finally, Hak-Cheol , uh, for you,

MALE_2: how do you make LG a leader over the next decade or

MALE_2: even 30 years when it

MALE_2: comes to electrification of vehicles?

HAK-CHEOL: Right. Uh, we continue to

HAK-CHEOL: invest in research and development.

HAK-CHEOL: Right now, uh, as a company,

HAK-CHEOL: we are investing over one billion dollars

HAK-CHEOL: in research and development.

HAK-CHEOL: There's about four percent of sales,

HAK-CHEOL: we continue to develop new technology,

HAK-CHEOL: new solutions as, as we continue to move forward.

HAK-CHEOL: Our objective is to continue to

HAK-CHEOL: increase the effectiveness of the battery system,

HAK-CHEOL: safety and reliability, and continue to drive the cost.

HAK-CHEOL: We continue to do that and continue to

HAK-CHEOL: work with partner like, uh, General Motors.

HAK-CHEOL: Uh, they clearly put us,

HAK-CHEOL: uh, in the- in,

HAK-CHEOL: in the leading position in

HAK-CHEOL: electrification market in the world.