General Motors Company (GM) Earnings Call Transcript & Summary

Good morning. Great to be with you here today. My name is Tom Gallagher. I'm the Chief Operating Officer of Ultium Cells, which is a joint venture between LG Energy Solution and General Motors. Thank you for joining us today for exciting news about Ultium Cells commitment to battery cell manufacturing in the United States. And more specifically, for great news about our manufacturing jobs right here in Tennessee. And for the future, battery cell manufacturing at large in the United States. We're here today in Tennessee State Museum here in Nashville, which is really an appropriate venue for this historic investment announcement. It really is an exciting time leading to the future manufacturing and jobs in Tennessee. We would prefer to host a much larger event, a significant celebration, but having a larger audience would create a situation where our health and safety could be in jeopardy. So we've assembled a smaller group here in Nashville. But we're pleased to be webcasting our important news with our virtual guests around the world, including the United States and Korea. Today, you're going to hear from a number of people who will be providing details about the news of today's business. Very important messages from our leaders from LG, GM and the State. And that's what makes today so special. We'll be hearing from several people who played an important role to make this day possible. And it's certainly great today to get together to celebrate that. Before we get started, I'd like to line up -- before we get started with our lineup of speakers today, I'd like to recognize a special guest today, who is the General Consulate of Korea, Young-jun Kim. So thank you. Appreciate you being here. Your presence today makes today special. So thank you so much. So as we move forward with today's program, it's my pleasure to introduce the Chairman and CEO of General Motors, Mary Barra.

Well, good morning, everyone, and thank you very much for joining us today. It is always a pleasure to share exciting news about how General Motors is transforming our manufacturing footprint in the United States as we transition to an all-electric future. And once again, we are making that news here in Tennessee. About 6 months ago, we announced a $2 billion investment in our Spring Hill assembly plant to enable and support the production of electric vehicles starting with the Cadillac LYRIQ, which, by the way, will reveal the production form next week. Today, though, with -- through our Ultium Cells LLC, our joint venture with LG Energy Solution for the production of EV battery cells, I'm extremely pleased to announce, along with JH Kim, President and CEO of LG Energy Solution, another $2.3 billion investment for the construction of an all-new battery cell manufacturing plant. It will be built on the grounds at Spring Hill, and it will join the facility in Lordstown, Ohio as the second Ultium plant to support our growing EV lineup. This state-of-the-art plant will create 1,300 new jobs. Construction will begin immediately with the goal of coming online in late 2023. These investments at Spring Hill and other facilities in Ohio and Michigan affirm our commitment to U.S. manufacturing as well as to our employees and to our communities. They demonstrate that we're committed to changing the world right now. We are taking bold steps necessary to accelerate toward an all-electric future and to support our vision of 0 crashes, 0 emission and 0 congestion. We have committed more than $27 billion through 2025, including $7 billion this year alone to our EV and AV programs as we plan to launch 30 electric vehicles by mid-decade. This move to EVs as well as to autonomous vehicles is a fundamental shift in transportation and General Motors will lead the way. We believe 2021 is truly the tipping point toward electric vehicles, and we are seeing growing enthusiasm from all corners with more customers, more commercial interest and more policymakers embracing this fundamental change in mobility. All of that is crucial for widespread adoption of EVs that is so important to our industry and to our future. That's why we're moving toward an all-electric product lineup and why we plan to be carbon neutral in our global products and operations by 2040. And the foundation for this seismic shift to EVs is our Ultium platform and the Ultium lithium-ion batteries that we're going to build right here in Tennessee to support EV production at Spring Hill. Our new batteries will use less of the rare earth material cobalt and feature a single common cell design that can be configured more efficiently for higher energy density and a smaller space than our current batteries. This versatility means we can put more battery power into a wider variety of vehicles and at a better price for customers. It's truly a revolution in electric vehicle technology that will help democratize EV ownership for millions of customers, which will change lives and change the world. As I look around, I see that we are joined by our partners from LG Energy Solution, our community leaders, our local and state government officials, and I know we have the right people with us and supporting us to achieve this goal. To everyone who helped get us here today, thank you. We will reach a brighter, better and safer future together. At General Motors, we want to put everyone in an EV, and we have the technology, the manufacturing expertise and should I say the partnerships, along with global scale to do it. There's more work ahead, but we're moving forward with vision and determination. And that's why I'm so happy to be here today for this very important next step, our investment in Spring Hill. So thank you very much for being here. Thanks for the opportunity.

So thank you, Mary. And certainly, we appreciate your leadership driving GM's all-electric future. The transformation happening at GM is exciting, and Ultium is proud to be part of that future. So now it's my pleasure to introduce the President and CEO of LG Energy Solution, JH Kim. Thank you.

Good morning, everyone. Thank you for joining us today. My name is Jong-Hyun Kim, CEO of LG Energy Solution. I would personally like to express my appreciation to Bill Lee, the Governor of Tennessee; and Bill Hagerty, the U.S. Senator; and Marsha Blackburn, U.S. Senator; and Mary Barra, Chairman and CEO of General Motors; Young-jun Kim, Consulate General of Republic of Korea in Atlanta. And everyone who have worked hard to make this ceremony happen, your contributions are what made this investment possible. The history of LG Energy Solution's electric vehicle battery business started to ride here in the United States. In the year of 2000, we first opened our tech center in Detroit. From here, we only moved forward. The U.S. has been the land of opportunity for LG Energy Solution and also been home to a solid part of our business. General Motors has been the core of this partnership for more than a decade. As pioneers of the industry, we were the first paved the way for the electric vehicle market with Chevy Volt and Bolt. I don't know whether my pronunciation is right on that. These collaborations led to our joint venture, which we named Ultium Cells. And today, I'm very proud that we are setting another milestone here in Tennessee. What makes Tennessee the perfect investment is its great accessibility and its passionate people and the trust of local government, definitely, all of which were very critical factors in our decision. This represents LG Energy Solutions commitment to U.S. market. With the best-in-class technology and the products, setting a new standard for the future of electric vehicle market, our new plant in Tennessee will build solid and stable U.S.-based supply chains from research, product development to the procurement of low components. Furthermore, from 2024, we will plan to localize 4 major materials for making our cells. Once construction is complete and our new facility is fully operational, our U.S. plants will accommodate world's largest production capacity of 70 gigawatt hour as a joint venture, which is 2x bigger than Gigafactory in Nevada. Crucially, we will use 100% of renewable energy to accelerate the green movement. Thanks again to Governor; and Senators; and Chairman and CEO, Mary Barra; and Consulate General Kim, and everyone joining us here today. My sincere gratitude to everyone at General Motors and LG Energy Solution for making this joint project possible in such a short period. As the CEO Barra mentioned, LG Energy Solution is bringing the best-in-class technology into U.S., and we hope to be the main contributors to GM's electrification strategy. I am confident that is possible with the strong support from State of Tennessee and through partnership with General Motors. We will humbly execute the plan to realize the three 0s; 0 crash, 0 emission and 0 congestion. Thank you.

Thank you, JH. We appreciate your commitment and partnership in everything that you do to make Ultium possible. So thank you so much. These types of investments are not possible without teamwork and partnership, as we've discussed, at all levels of government in our local communities. The State of Tennessee and Maury County have been great advocates for General Motors for many years. And once again, we're great partners when it comes to this project between GM and LG for Ultium. So now it's my pleasure to introduce the Tennessee Governor, Bill Lee.

Thank you, Tom. Thank you, JH. Thank you, Mary. We are deeply grateful in the State of Tennessee for your continued investment of 2 great companies, a great American company, General Motors, a great Korean company, LG. And what that means to our state, what that means to the people in our state is that lives will be changed, and our state will become an even stronger leader. We are the leader in the automotive industry in the southeast as it stands. We hope to be the leader in the country in the automotive industry. And this decision today and your investment today allows us to move even stronger in the direction. It's obviously very important to all of us in leadership in this state. We have Senator Blackburn and Senator Hagerty here, our U.S. senators. We have our Speaker of the House, Cameron Sexton here. We have Leader of the House, William Lamberth. We have Chairman Cepicky, members of the General Assembly, who were all part of making decisions and partnership for what's happening here right now. But I want to not only say thank you, but commit to you. And I'll say it's an important day for me, and it's a memorable day for me. When I first was elected and was Governor-elect, I went to Detroit to meet with Mary and her team at General Motors because of the importance that this company has had in a relationship with our state for decades and how it's been transformative. So we flew up there and we met and talked about an announcement there, but also about how grateful we are in the state for the investment and how we hope for more. Also flew to Korea. And you, in fact, were touring Tennessee at the time, and we have worked very hard to create an environment in our state for continued investment from LG, who as well has -- this is not the first investment in our state. You've created -- you've spent significant capital investment here and created jobs and changed Tennesseans' lives. So for today to be happening, the congruence of those visits, those -- building of those relationships and our desire as a state to create an environment for you to be successful, it's very rewarding for me, in particular, to be here. We have worked very hard in our state to, in fact, create the kind of environment that will allow companies to thrive. And we've invested heavily in workforce, particularly the kind of education that creates a skilled workforce that will be needed for the expansion and growth of your great companies here. We're committed to the idea and the value of a skilled craftsman. And we are constructing an education system that appreciates that value and is working to enhance the number of and the level of skilled people in our state so that you will have an opportunity to thrive. We've created what we believe is a business-friendly environment as is evidenced by investments made by multiple companies. But today, this is the largest single investment of economic activity in the state's history. We are celebrating that today, but we are most grateful for your investment here, and I'm proud to be here, and I'm proud to partner with you, and I look forward to the years and decades ahead when we can continue to lead the country in this type manufacturing. Thank you very much.

Governor, we appreciate your visionary leadership and certainly, all that made today possible. So thank you so much for you and your team support to the project. Support for GM, LG Energy and Ultium comes from all levels of government in Tennessee, including at the federal level. And today, we're pleased to have both senators today from the State of Tennessee. So now it's my pleasure to introduce Senator Marsha Blackburn.

Thank you, Tom, and there has been a lot said today about partnerships, and partnerships are indeed vital. And to JH and Mary and those on the private sector side, it is important that those of us on the public sector side understand our role with our Governor, our ECD Commissioner, the leadership from our General Assembly and Mayor Ogles and the leadership in Maury County. And many years ago, when I was in the State Senate, and we were working on something for economic development, I said, you know there is a formula that really puts in concise form exactly what we in the public sector need to do, and it's this. It is less taxation plus less regulation plus less litigation equals more innovation and job creation. That creates the environment for jobs growth to take place. And as we talk about partnerships, we understand which side of the line we're supposed to stay on. We create that environment. It is the ability to have a friendly place to work where you have low taxes, where you have less litigation, where you have rightsized regulation, and that is Tennessee. And we are thrilled with that. And what attribute to the hard workers in this state. And at the federal level, we're continuing to put that focus on innovation. Senator Rosen and I have advanced manufacturing legislation that is working its way through the Senate right now. We are also focused working in a bipartisan way with the administration as we look at rare earth minerals, as we look at microprocessors, as we look at semiconductor chips and bringing that manufacturing back. And we're so thrilled that LG is showing how to do this. So thank you all. Thank you for your belief in Tennessee workers, and thank you for choosing Tennessee for this expansion.

Thank you, Senator Blackburn. We really appreciate your support and drive for innovation. Now it's my pleasure to introduce Senator Bill Hagerty.

Tom, thank you. And I want to congratulate and thank you, Mary. Mr. Kim, thank you for your leadership, being here. Consulate General, Kim, we appreciate your presence here as well. Governor Lee, you are leading the economic juggernaut of America right now, and you've got the best economic development team, I think, present in the United States. You're doing a tremendous job and my hats off to you with this great accomplishment today. The legislature, the conservative legislature that we've had in place here for years has really transformed the state and created a business environment for us that has made us second to none in terms of our competitiveness. Our partners at TVA have done a wonderful job and all of our local partners. Mayor Ogles, a wonderful job in Maury County. I'd say this, what a difference a decade makes. Because as we were coming out of the last recession, I remember traveling up to General Motors in Detroit, the plant in Spring Hill, as you remember, Mayor Ogles, was in a very different place, most of it shuttered. What's happened over the years is we've rebuilt that plant, we've got a tremendous workforce, the investments that the Governor talked about are making a transformative difference here. And your investment today not only makes a big difference for Tennessee, but it is strategic beyond belief. We've been working very hard, Senator Blackburn and I, to get our supply chains back onshore to see this happen in a cutting-edge environment like we're in today, to see electronic vehicles produced where they're sold is the right formula for economic success. And it's my great privilege to work with Senator Blackburn every day to try to make certain we create the best environment possible so that companies like GM and LG continue to find America the most attractive place to invest. And I can assure you that Governor Lee and Commissioner Rolfe do everything they can to make certain that Tennessee is the very best place in America. Thank you all. And congratulations again.

Thank you, senators, and we really appreciate you traveling from Washington, D.C. to join us today. It's rewarding to see how Washington is helping grow electric vehicle manufacturing and its related supply chain and seeing that come to fruition right here in Tennessee. With manufacturing complex in Spring Hill, GM has enjoyed a long and successful relationship with Maury County. A big part of this project has been the Maury County leadership working with the joint team between LG, Ultium and General Motors to bring this together for us. So a big part of that leadership in the county, of course, is Mayor Ogles. So it's my pleasure now to introduce Mayor Ogles.

Well, thank you all. This is a historic moment. So thank you, Mary, and Mr. Kim, Mr. Kim. An announcement like this doesn't happen overnight. It is about partnership. It's working with the Governor and Commissioner Rolfe, and working with our elected officials at the federal level. And when GM reached out and said, "Hey, it's time to renegotiate our pilot," it was more than just a pilot. It was an investment in our community, an historic announcement or investment. And it was -- and I have to admit, when you're negotiating with a company, and you're new to the role, a $2 billion negotiation is rather exhausting. And as we go through the process, and you're excited because you know that, that commitment is going to mean jobs for generations, Commissioner Rolfe let me know that it was time to, it wasn't over. Because there was another opportunity for Tennessee to be the leader in North America on technology. And so this partnership with LG and General Motors really transforms Tennessee, in my humble opinion, as the place to be. We are open for business. We have a low tax environment for your business. We have a great workforce, and I'll brag on Maury County. We -- I'm biased. I'm the Mayor. It's my job to be the cheerleader for Maury County but also Tennessee. But we're open for business. And this plant is a flag, right here in the middle of the state that we appreciate our partners from South Korea. We certainly appreciate our partners from up North, and we look forward to working with you. I'm here to be your advocate, anything you need, any problems that you have. If you need the Governor, if you need me, if you need connections to our Senators, all you have to do is call me. It's a blessing to have you, and I look forward to working together.

Thank you, Mayor. I'd like to welcome another important partner in this project as well. It's my pleasure to introduce the Tennessee Commissioner of Economic and Community Development, Bob Rolfe.

Tom, many thanks. Mary, thank you. 45-year partnership with our great state. In the last 2 years, $4.5 billion. Thank you. Mr. Kim, it's been a long road, sir. Actually, 3.5 years, ECD and our Governors have pursued this opportunity. So thank you very much, and we look forward to 45 years. And then to our leadership, thank you, guys, both in D.C. Man, I don't know a county in the country that wouldn't want to wake up this morning to another $2.3 billion investment and 1,300 jobs. I don't know another county in our country. So thank you. To the General Assembly and the leadership in the General Assembly, I must tell you, it's your budget, it's your leadership that provides ECD with the economic tools to be competitive. And I can promise you, this is a great investment. This is a return on investment that we will quickly redeem, and we will enjoy the benefits for decades. And the Governor Lee, the person that I have the privilege of working for and serving every day. Let's just assume this is Friday morning, which it is, and we're presenting our Friday morning report card. And one of the things you ask us to do when you swore-in at ECD, ECD go out and recruit the greatest global brands. Sir, we didn't deliver 1 today, sir, we delivered 2. We'll call that group on Friday, okay? So thank you for that. You also said, Bobby, I want us to continue to support the rural communities. Sir, 40% of the projects that we announce at ECD are rural communities, and today is no exception. Then I think you said, Bobby, go out there and let's use our FDI initiative and our resources across the globe. And [ Hei Zong Chen ] who is on the ground, an ECD colleague in Korea, did a fabulous job, and so I thank her. And then you said, Bobby, let's go out and make sure that we incent with General Assembly dollars the best family wage jobs. So, sir, we would check that box as well. And then lastly, I think you said that there's more -- maybe, ladies and gentlemen, my words, maybe not the Governor's, but he said, when it comes to the automotive industry, don't blow it, grow it. And sir, today, we are doing exactly that, not only taking care of the 900 automotive ecosystem DNA companies that call Tennessee home, but we're now transforming lives, as you say, in the electric vehicle business. And today, I think it's fair to say the State of Tennessee, thanks to your great leadership and everybody's decisions to come here, we can check that box. So to our friends, again, thank you very much. I hope that we can say for the next 45 years, sir, that this has been a great investment for our friends in the Republic of Korea. So many thanks. I believe, Tom, I'm kind of the caboose here, so I'm going to turn the stage back over to you and ask for further introductions. So ladies and gentlemen, thank you again for your time today, and our friends at TVA, Department of Transportation, many thanks for your support.

Thank you, Commissioner, and appreciate your support, your leadership and all the work you did with the legislature in Tennessee. So thank you so much for making today possible. Just again, thanks to all of our speakers. Without your presence today, today would not be a special. So it's great to come together in a safe manner and enjoy this opportunity. What strikes me in this moment really is a core value of General Motors, a core value of Ultium. What that is, is one team. We are one Ultium team in this room. We're all together driven around one objective, which is the success of the future of the automotive space, the electrification of the automobile and making Ultium the best solution in that business. So again, thank you to our partners in General Motors, LG Energy Solution and all the governments that made today possible. So excellent work today and really appreciate your contribution and commitment. There are a number of other partners in our -- that made today possible. Important partners that come from various aspects of government and other agencies that make today special. So as we begin, I'm going to read a list and ask that you hold your applause to the end. Certainly, we ask anybody in the room to raise their hand for recognition. So beginning with Mayor Chaz Molder of Columbia; Mayor-Elect Jim Hagaman from Spring Hill; Senate Minority Leader, Jeff Yarbro; House Speaker, Cameron Sexton; House Majority Leader, William Lamberth; Representative, Scott Cepicky; and then Commissioner Bright and the team from the Department of Economic Transportation -- Economic Development and Transportation; team members, which are extensive from the Tennessee Department of Economic and Community Development, appreciate their partnership; John Bradley and the team from the Tennessee Valley Authority; Wil Evans, President of Maury County Chamber and Economic Affairs. So again, we really appreciate all your support. We recognize the work that goes into this at all levels of government, a private business and all agencies making today special. So really appreciate you coming together for all the speakers that made today possible. Without this type of work and commitment, this would not be possible today in Tennessee. So we really appreciate, really excited about today. We're also excited about the work that's going on as we lead the electrification space with the work in Lordstown, Ohio. It's exciting to see the progress of the plant, and we're looking forward to taking the learnings from that project and bring it right here in Spring Hill, Tennessee. So again, all these come together to making all-electric future reality. So again, appreciate your contribution making today possible. Thank you for those who tuned in through webcast, who could not be here in person. And so thank you again for making, your participation makes that special. So that ends the formal presentation today. We appreciate all those who tuned in. For those of you who are here in the museum with us today, I ask that you remain in your seats and that the speakers will come to the stage, and we've got properly positioned places on the floor for socially distanced photo. So we're moving to a photo position. But those in the room, we ask that you stay. So thank you so much, and appreciate you being here with us today in this special event. So thank you.