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SK On to furlough workers, cut production at US plant

Nov. 14, 2023 - 15:39 By Kan Hyeong-woo
SK Battery America's manufacturing facilities in Jackson County, Georgia (SK On)

SK Battery America, SK On’s US subsidiary, will furlough workers at its battery plant in Jackson County, Georgia, and cut down production amid the sluggish electric vehicle market, the South Korean battery maker said Tuesday.

“SK Battery America is temporarily adjusting its line operations and furloughing a portion of our production employees,” said SK On.

“We have taken the decision as a part of our efforts to optimize line operations and workforce management with flexibility as the EV industry is adjusting its pace of growth.”

The battery maker did not reveal how many employees will be subject to the furlough and how long they will be away from work. The company operates two battery factories in Jackson County with a combined annual production capacity of 21.5 gigawatt-hours, enough to power some 180,000 EVs.

An SK On official explained that manufacturing businesses decide to either increase or decrease production depending on the market status, saying that the battery maker shares the same norm.

“SK Battery America remains committed to the Georgia site and optimistic about the long-term growth of the US EV market,” said SK On.

“We believe our Georgia site will play a leading role for years to come in making batteries for American-built EVs.”

SK Battery America announced layoffs in September. The company did not disclose how many of the some 3,000 employees were let go. It said that the factory still had more employees than the originally targeted hiring goals, noting that the layoffs were needed because the battery maker was aligning production with market demands.

The Korean firm has invested a total of $2.6 billion to build two battery manufacturing facilities in Georgia since 2019 to supply batteries for EVs such as the Ford F-150 Lightning and the Volkswagen ID.4.

Regarding the $5 billion joint venture with Hyundai Motor Group to build a battery cell plant in Bartow County, Georgia, SK On said the decision at the Jackson County plant was unconnected. The two firms’ joint battery plant is expected to begin mass production in the second half of 2025 with annual production capacity of 35 gigawatt-hours, as originally announced.

SK On is not the only battery maker making adjustments to production lines amid concerns over weakening demand for EVs in the short term, due to economic recessions and rising costs.

LG Energy Solution, another Korean battery maker, said Saturday that it decided to forgo its plan to build a battery plant in Turkey with Ford and Koc Holding, a Turkish real estate developer. Koc pulled out of the joint project, citing reviews over EV adoption and the timing for the battery investment.