GM To Open Battery Lab In Mich.

DETROIT - General Motors Corp. said Monday it has picked LG Chem of South Korea to supply the lithium-ion battery cells for its Chevrolet Volt electric vehicle.

The cells will be made in Korea, but they'll will be assembled into battery modules and packs at a factory in Michigan. GM Chief Executive Rick Wagoner said the lithium-ion battery pack assembly facility will be the first in the U.S. operated by a major automaker.

LG Chem CEO Peter Kim said the company may eventually build cells in Michigan and anticipates that the company's U.S. subsidiary, Compact Power Inc., will add to its 100 person work force in Troy, Mich.

Volt vehicle line director Tony Poswatz said GM also will open a new battery lab at its Warren technical center. The 31,000-square-foot battery lab will be the largest in the U.S., Wagoner said.

Wagoner said the company is integrating battery research and assembly into its mainstream to develop powertrains of the future.

"We believe this will become a competitive advantage for GM and will be critical to GM's success," he said in announcing the news at the North American International Auto Show.

Detroit-based GM had planned to name a battery supplier early last year but decided to keep working with two developers simultaneously to test their batteries under a variety of conditions. The other company that was in the running for the contract was Germany-based Continental Automotive Systems, which is using cells developed jointly by GM and A123 Systems Inc.

Poswatz said GM chose LG Chem because of its flat-cell design that dissipates heat better and stores more energy than competitors' cylinder-shaped cells.

The competition from A123 Systems Inc. was very capable, Poswatz said, but "one has to be the lead."

The factory that will assemble GM's batteries likely will be located near the Volt assembly plant, which straddles the border between Detroit and Hamtramck, Poswatz said.

He did not know how many workers the battery factory would employ but said he expects the battery manufacturing and development operations to bring more jobs to Michigan, where the shrinking auto-dependent economy has led to a nation-leading 9.6 percent unemployment rate.

"We think this is the next great industry in Michigan. I think 50,000 jobs over the next five years is not unrealistic," said Jim Epolito with the Michigan Economic Development Corp.

"We have enough critical mass that future growth will cluster," Poswatz said.

GM also announced Monday that it has established a partnership with the University of Michigan in Ann Arbor to train battery engineers and to create a new automotive advanced battery lab.

University officials said a five-year, $5 million award will establish the GM/U-M Advanced Battery Coalition for Drivetrains. The lab will accelerate the development of advanced batteries by conducting experiments and simulations to better understand and resolve issues related to battery life and performance.

Three Michigan professors and a faculty member at the University of Colorado at Colorado Springs are working on the project.

"Our shared ambition is to see electrified drive trains in a large number of vehicle types and applications. That means we need to reduce the design cycle in both time and cost," Michigan engineering professor Ann Marie Sastry, the lab's co-director, said in a news release.

"We feel in the future, design and assembly of the battery pack, and a knowledge of the battery electric chemistry, and how to make it work is a core competence for an auto company," said GM Vice Chairman Bob Lutz.

The Volt is designed to plug into a standard wall outlet and travel 40 miles on battery power alone. After that, a small internal combustion engine will kick in to generate power for the car.

The car is set to go on sale next year. GM hasn't announced pricing, but it is expected to cost $30,000 to $40,000 initially.

Copyright 2011 by The Associated Press contributed to this report. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.