Battery-Making Rivals to Settle Trade Rift That Threatened Georgia Plant -- 2nd Update
By Ben Foldy
Korean battery-making rivals SK Innovation Co. and LG Chem Ltd.
have agreed to settle a trade-secret dispute that had threatened a
$2.6 billion factory SKI is building in Georgia set to supply Ford
Motor Co. and Volkswagen AG with electric-vehicle batteries,
according to people familiar with the matter.
That plant's future had been in doubt after the U.S.
International Trade Commission in February sanctioned SKI with a
10-year ban on importing batteries and the materials necessary to
make them after finding the company destroyed evidence relating to
The agreement between the battery makers hasn't yet been
finalized, the people said. A spokeswoman for SKI declined to
The settlement comes just ahead of a Sunday deadline for the
Biden administration to potentially veto the trade commission's
decision. President Biden has made electric vehicles and the
batteries that power them a core component of his proposed $2.3
trillion infrastructure program. As part of that plan, he has
proposed investing $174 billion in spurring uptake of electric
The fate of the Georgia factory has major implications for Ford
and VW, which are counting on the new assembly complex to build
batteries for electric models such as Ford's F-150 pickup truck and
VW's ID.4 crossover. It is also important to the state, which swung
in favor of Mr. Biden in the last election and gave Democrats
control of the Senate.
SKI has said the plant under construction will create 2,600 new
jobs, and Gov. Brian Kemp has described the factory project as one
of the largest job-creation investments in the state's history.
Auto makers have given priority to securing a steady supply of
the batteries necessary for mass-producing electric vehicles.
Locating battery factories in the U.S. is a priority both for auto
makers, for whom shipping heavy batteries between continents is
expensive, and for the administration, which has said it sees them
as necessary for creating jobs and remaining globally
The legal battle between the two Korean battery-making giants
began in 2019 when LG Chem filed a complaint with the trade
commission, accusing SKI of stealing its trade secrets. Last year,
an administrative judge ruled in LG Chem's favor after finding SKI
had destroyed evidence relating to the case. SKI admitted in ITC
filings that some documents had been destroyed but denied it had
stolen trade secrets.
The ITC is an independent government agency that adjudicates
trade and intellectual-property disputes.
The commission's decision in February to uphold the earlier
ruling and sanction SKI started a 60-day period in which the Biden
administration could reverse the decision, based on the consumer
impact and competitive landscape. That decision was to be made by
U.S. Trade Rep. Katherine Tai, according to people familiar with
the matter. Ms. Tai was deeply involved in the settlement talks,
the people said.
Representatives with both LG and SKI met with administration
officials within the past few months to present their views
regarding the decision, The Wall Street Journal reported. Each
company has said they plan billions of dollars in additional
investment to bolster the U.S. supply base for electric-car
The commission gave SKI some flexibility to meet its existing
auto-industry contracts, allowing it to supply Ford and VW for a
limited time until those auto makers can find new suppliers.
But SKI has said that such leeway wasn't enough to make the
Georgia factory complex economically viable.
The company had said it would potentially stop construction on
the site northeast of Atlanta in Commerce, Ga., were the import ban
to come into effect.
The battery maker told the administration in February it plans
an additional $2.4 billion investment to expand the site and create
a total of 6,000 jobs by 2025.
Meanwhile, LG Chem has also pitched the administration on its
own plans to increase U.S. battery production. Through a
battery-making venture with General Motors Co., LG Chem is building
one plant in Ohio and is weighing the construction of a second
factory in Tennessee, the Journal has reported.
The agreement reached Saturday between SKI and LG Chem was
earlier reported by Bloomberg News.
Write to Ben Foldy at Ben.Foldy@wsj.com
(END) Dow Jones Newswires
April 10, 2021 17:03 ET (21:03 GMT)
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