Canadian supplier Magna International Inc. and South Korea's LG Electronics Inc. broke ground today on a factory in Mexico that will supply parts for General Motors' electric vehicles, the companies said today.
LG Magna e-Powertrain, the joint venture created in 2021 between the two companies, plans to open a 260,000-square-foot plant in Ramos Arizpe, Mexico, by 2023. The plant will employ about 400 people producing inverters, motors and on-board chargers for GM, the companies said in a statement.
"In the space of just over one year, we've added an expansion agreement, identified a strategic location to support our customer, and are now in the process of realizing our plans," Magna Powertrain President Tom Rucker said in a statement.
"The building of a new facility is a true testament to the strength of this collaboration and commitment in delivering innovative solutions to customers to meet their challenges."
The plant's groundbreaking comes nearly a year and a half after LG and Magna announced their joint venture in December 2020 and less than a year after the deal closed in July 2021. The venture, reportedly valued at about $1 billion in 2020, employs 1,300 people globally, according to a news release.
The cost of the manufacturing investment was not disclosed, nor was it immediately clear which GM vehicles or assembly plants the LG-Magna factory will supply. A Magna spokeswoman declined to comment.
GM has plans to build EVs at its Ramos Arizpe plant by 2023, the same year the LG-Magna factory is expected to be up and running. The automaker said last year that it would spend about $1 billion to retool that plant for EV production.
The GM Ramos Arizpe plant is expected to begin production of an electric Chevrolet Blazer model in mid-2023, followed by the Chevy Equinox EV later that year, and then a model for Honda in 2024, according to AutoForecast Solutions LLC.
LG-Magna e-Powertrain called GM its "foundational customer" for the new factory, saying it will play a "key role in GM's journey to build a strong, scalable, sustainable and North America-focused EV supply chain."
"The JV's ongoing success will enable us to better support our customers with best-in-class components for the next generation of electric vehicles, and help us to expand our presence in the fast-growing global EV market," LG-Magna CEO Cheong Won-suk said in a statement.
Magna ranks No. 4 on the Automotive News list of the top 100 global suppliers, with worldwide parts sales to automakers of $32.65 billion in 2020.
Hannah Lutz contributed to this report.