How bitter rivals settled dispute that threatened to kill Georgia battery plant
As two rival South Korean industrial giants barreled toward a Sunday deadline still locked in a bitter U.S. trade dispute, Georgia officials grew increasingly worried a $2.6 billion SK Innovation project in Commerce that could employ 2,600 people would fall victim to the intractable feud.
Most Georgia politicians joined calls urging President Joe Biden to veto a trade commission decision that was in favor of the company’s adversary, LG Energy Solution, which would have torpedoed the project, one of the largest economic development deals in state history.
U.S. Sen. Jon Ossoff took a different approach, one that the manufacturer’s top executive credited for helping to end the rift.
The $1.8 billion settlement announced Sunday allows SK Innovation to complete construction of sprawling factories that will supply batteries for Volkswagen’s new ID.4 SUV being made in Chattanooga, along with other battery-powered cars being developed by Ford Motor Co. The project is seen as a key part of Biden’s plan to build U.S.-based infrastructure for electric vehicles.
The pact also spares Biden of a difficult decision that could have alienated voters in Georgia, a state he narrowly won in November and is primed to be one of the nation’s most competitive political battlegrounds in 2022.
Ossoff, the newly elected Democrat from Georgia, figured a presidential veto was a long shot at best and instead set about trying to broker a negotiated settlement between SK Innovation and LG
Energy, according to three senior officials familiar with the discussions.
But it required intense negotiations between two firms with a long history of distrust. At stake was no less than a cornerstone of Biden’s $2.3 trillion infrastructure program, which aims to rev up the nation’s electric vehicle supply chain.
Back in February, the U.S. International Trade Commission ruled in favor of LG that SK stole trade secrets. It ruled SK could only make batteries for Ford for four years and Volkswagen for two years. After that it banned SK from importing components needed for making batteries for 10 years. It also scolded SK in its full opinion, issued in March, for destroying documents.
On April 2, less than two weeks before Biden’s deadline, Ossoff flew from Atlanta to Washington to meet with the chief executive of SK Innovation for more than three hours to prod the company to strike a deal and outline several potential pathways to an agreement.
Congress was in recess and Ossoff and the executives were set to meet in a conference room near the Senate floor, but the group quickly relocated to a nearby hotel when Capitol Hill shut down after a man rammed his car into a police barricade, leaving one officer dead and another injured.
After the meeting, Ossoff called a senior White House official to insist there was still a path toward a settlement, though it would require more rounds of negotiations and intense pressure on both rivals, according to the people, who spoke on condition of anonymity to discuss private negotiations.
Over that weekend, the officials said, the talks between the two South Korean firms restarted, though they didn’t gain much traction. On Monday, Ossoff met virtually with the chief executive of LG to urge more talks to bridge the gap.
All the while, other state officials amped up the pressure.
Gov. Brian Kemp lobbied Biden to reject the ruling and met with SK’s leader and other executives in recent weeks.
In a statement Sunday welcoming the settlement news, Kemp said, “Our state attracted this massive $2.6 billion investment because of Georgia’s pro-growth leadership, and I have personally participated in countless meetings, calls and other conversations to make sure this project and the 2,600 expected jobs continued to move forward.
“I want to offer a special thank you to local leadership in Jackson County and the city of Commerce, our incredible partners with the government of South Korea both here and in Seoul, as well as the Office of the United States Trade Representative for assisting the two companies through the settlement negotiations process.”
U.S. Sen. Raphael Warnock also prodded the firms to settle and pressed Biden administration officials to preserve the plant.
In a statement released Saturday after The Atlanta Journal-Constitution and other media outlets reported that a settlement had apparently been reached, Warnock, a member of the Senate Banking and Commerce committees, said, “In my conversations with the Biden administration and the companies involved in this ongoing dispute, my sharp focus has been on protecting jobs with good wages that were committed to Georgians. And given the outstanding litigation between the companies, it has always been clear that the best way to protect workers in Commerce — and the jobs Georgians were promised — is for the companies involved to negotiate a settlement in good faith.
“To that end, I have spoken repeatedly to senior leaders at the companies, as well as numerous officials in the Biden administration about the value of the Commerce factory, both to the local economy and the critical effort in Georgia and across our country to reduce pollution and strengthen environmental sustainability.
“Now that it seems sure that these jobs will stay in Georgia, I’m glad that all the parties involved listened and that the community of Commerce got the decision they hoped for, which will help keep the local economy moving forward.”
New U.S. Trade Representative Katherine Tai, in her role less than a month, also held multiple meetings with the rival firms, the officials said, and both companies stepped up aggressive campaigns to lobby Biden in their favor. Biden praised her “tireless work” in helping broker the pact.
Ossoff stayed deeply involved over the last week, officials say. He asked both companies to brief his staff multiple times a day on the latest developments in case the talks went sour and needed another intervention.
He was also in frequent contact with Biden administration officials over the fate of the deal, urging the talks to resume Friday night amid worries of another impasse.
Officials say a marathon negotiated session that extended from late Friday through Saturday paved the way for a deal, and that Biden called Ossoff on Saturday to confirm the settlement had been reached. After the deal was confirmed on Sunday, SK Innovation noted Ossoff’s role.
“When the future of the plant was in jeopardy, Senator Ossoff provided leadership and helped us achieve a path forward,” said Jun Kim, the company’s chief executive.
“This successful outcome will lead to billions more in investment in Georgia. The state is now positioned to be the nation’s leader in electric vehicle battery production.”
In a statement, Kim also said Kemp played a critical role in the deal.
“From day one, he saw the importance of saving this investment in Georgia and made a sustained effort to keep these factories running. He relayed his concerns directly to the Biden administration at every turn,” Kim said. “Without his efforts, we may not have been able to continue our operations in Georgia.”