Q&A: Work force, partnerships key to N.A. battery manufacturing, LG Energy's Denise Gray says

DETROIT — LG Energy Solution is swiftly expanding its North American manufacturing footprint as automakers plan a flood of electric vehicles.

Developing a skilled work force to collaborate with its global teams and partnering with automakers is key to scaling battery production, said Denise Gray, head of external affairs, government relations and North America at LG Energy Solution.

The battery maker has had a plant in Holland, Mich., for more than a decade and aims to open two plants in Arizona in 2025. The company has plans for factories in Ohio, Tennessee and Michigan with General Motors. It is partnering with Honda on a plant in Ohio as well and with Stellantis on a factory in Ontario in Canada.

Gray's team is focused on the needs of those automaker customers today while also keeping an eye on the future.

She believes the R&D team should be at the table where decisions are being made so that all the discussion isn't just on what's happening today. "If you only concentrate on today, you may be obsolete tomorrow," she said.

Gray, 60, spoke with Staff Reporter Hannah Lutz at the SAE World Congress here last month. They discussed the evolution of the supply chain, transferring knowledge between the U.S. and international regions and building a U.S. work force. Here are edited excerpts.

Q: How will LG keep up with demand for EVs and batteries in North America?

A: LG has been working on batteries for over 30 years here in the United States. But the demand hasn't been here. Your return on investment didn't come for a very, very long time. Now we're shifting to, "There is demand, and demand is really aggressive." We've got to really do the right thing to invest in the right place with the right technology for customers. We're working hand in hand with them. The collaborations that we have with General Motors, with Stellantis, with Honda, with Hyundai will make LG even more capable to meet the growing demand in the most efficient way.

Describe the value of partnerships with automakers.

It's supply base and volume purchasing. If you think of GM, they have a huge purchasing organization and they've been around for so long. They've got huge purchasing power. When an OEM goes with you to a Tier 2 or Tier 3 supplier and says, "We want you to be a part of the supply chain," it's one thing to get that confirmation from the battery supplier. To also get it from the automobile maker is double confirmation that the volume is coming. We've been able to get additional manufacturing efficiency know-how from the vehicle companies, but also purchasing strategies that will support the procurement of the entire supply chain.

What type of work force is needed for battery manufacturing? How does the U.S. industry need to change?

Leaders understand that we are going to be using technology that was originated in another country, in another language. As we bring that to the United States, the leadership has to recognize that we're going to have to integrate foreign technology, foreign processes into our country's culture. … how we train [employees] and how we transfer the knowledge. It's not something that you can just read in a book or you can just look at this document. We really want to make sure that it's 1+1=2 and not just we're adding a plant and turning it on. It has to have focus and dedication for it to be something that is here today and will continue to be here tomorrow and the next tomorrow and the next tomorrow.

What are you doing to ensure knowledge is transferred and that leadership plans for the future?

There's battery manufacturing happening around the world today by LG. We're sending people from the United States to Korea or to Poland to see and to develop a network in order to help do the training that we need. There are a number of things happening, but we need to continue to do more. It can't just be delegated to various entities within the company. It has to be recognized at the top of the company. [North America battery manufacturing is] really starting something that's never been here before at this quantity, this volume. If you're going to be able to extract what's currently happening from battery technology and integrate it with the U.S. culture of efficiency and continuous improvement, really bringing those two together takes a dedicated effort to be sustainable.

How do you balance technology innovation while also working on the proven technology today?

You have to have a dedicated team that's looking globally for technology and opportunity. You have to invest in people, in technology, in research for the future so that you know when it's time to transition from what you have today to what you'll have tomorrow.

Why is diverse experience important for your work force?

This is a great opportunity for LG to really tap into the diverse work force and the experienced work force we have when it comes to high-volume manufacturing. That work force may come from the chemical industry; you're going to need folks who understand machine-people interface, people who understand the importance of high-quality operations. It's pharmaceutical-grade quality parameters we have. It should be people from the traditional automotive industry. It should be people from the pharmaceutical industry, from chemical. It should be people from equipment and machine operations. It should be software and controls, testing, quality. All of those kinds of skill sets are going to be needed. That will only happen if it's coming from a number of different sources and backgrounds and experiences.

There's an ingredient of innovativeness in this as well. It really needs to be, "We're going to build it, but we're always going to have an eye for how can we improve it and how do we keep an eye open for the next generation of equipment that's available to us?" We need people who are team players and who can talk to each other with respect so that we can end up producing the best battery technology ever. It's not easy to pull all of that together. The leader of that has to be extremely sensitized and intentional when it comes to creating that kind of team.

How has your auto industry experience at GM and elsewhere helped you in this battery role?

At the OEM, I recognized I was only as good as my weakest link, which was my suppliers and their suppliers and their suppliers. Learning that early in the game allowed me to be more effective as a supplier, knowing when to bring up information, filling in the gaps. Hopefully, we don't have as many miscues because I'm bi-experienced. I can play on both sides.

How important is a North America supply chain for LG Energy Solution?

Having a supply base that's regionally available as well as globally available is extremely important. We don't only sell locally; we sell globally. You have to have regional opportunities. LG has customers in the United States and China and Europe. You have to have manufacturing capability all over. It's always been our philosophy to build the product where our customers are.

How do you feel about recent EV and battery regulation, such as the Inflation Reduction Act and the EPA's proposed rule on vehicle emissions?

I truly believe that those who are [proposing] the regulations [are] soliciting information because they want it to be a success. They're not creating these incentives to fail, to only allow one or two companies to reap the rewards. They really are trying to craft this supply chain resiliency, the incentives to help spur customer demand. They're trying to do it for all the right reasons, and input is needed. It's important that we all provide data. If it's based on good data, then it's going to be good policy. The people who are providing the data for decision makers are people who've been in this industry for decades. I'm optimistic around the government support, that the outcomes will prove what's needed to really accelerate the adoption.