For over 100 years now, the city of Detroit has been home to one of the greatest corporate battles in American history. By that we mean the ongoing competition between the Ford Motor Company and General Motors. And while for years this fight has been settled on dealer lots, the two automakers are now embroiled in something much different. As both companies seek to transition to selling mainly electric vehicles, their respective battery suppliers have started some serious beef. More specifically, Ford’s supplier SK Innovation has been accused of stealing sensitive trade secrets from GM’s partner in LG Chem.
Now, the federal government under President Biden is going to have to pick sides in the lawsuit, essentially backing one automaker over the other. Here’s what you need to know about this act of alleged corporate espionage.
According to a report from Automotive News, SK Innovation has allegedly been actively poaching employees from LG Chem in an effort to gain access to the company’s proprietary information. Furthermore, SK Innovation has since admitted to actively destroying documents, though the company maintains those documents were completely unrelated. The federal judge working this case for the International Trade Commission didn’t buy this explanation, and ruled in favor of LG Chem earlier this month. The ITC is now reviewing that ruling, which is where things get a bit more complicated.
Should the ITC rule on the side of LG Chem and General Motors, it will have dramatic implications for Ford and their EV-related efforts. That is because batteries and components built by SK Innovation in South Korea will face a total import ban. This will leave the automaker without access to the increasing volume of batteries needed to transition to an EV company. LG Chem wouldn’t mind that, considering they have long stated that they are capable of supplying batteries for the industry as a whole.
The ITC doesn’t necessarily need to side with LG Chem however, as they could simply force the matter to go to trail. This would give more room for an investigation into the alleged theft of trade secrets, but it would go against their judge’s previous ruling. Things aren’t necessarily over for the Blue Oval and SK Innovation if the ITC does side with LG Chem either though. SK Innovation has already asked President Biden to consider vetoing any decision that favors LG Chem. President’s don’t tend to behave like this, as an ITC decision has only been overturned once in more than 30 years.
That said, this import ban would have an impact on the President’s current electric vehicle ambitions, which was a major part of his campaign. President Biden has already announced that he intends to have the entire federal fleet transition to electric vehicles, a decision that will be delayed massively by this move. Furthermore, siding with LG Chem could have repercussions for American workers. More specifically, this move could erase 2,600 jobs that SK Innovation has committed to adding to their Commerce, Georgia facility by 2024. As the United States still finds itself struggling with unemployment as the pandemic rages on, this could prove to be an unpopular move.
Volkswagen, who also get their batteries from SK Innovation, agrees with this sentiment. According to the automaker, the only people who really stand to lose anything in this decision are American workers and consumers. Not exactly the type of folks you want to make upset.
So while this battle between Ford and General Motors wasn’t really started by either of the two automakers, one of them is going to come out on top. Not exactly the type of fair fight that we tend to expect from the two hometown rivals, but such is life when dealing with massive globalized operations.
Who would’ve thought that the push to build electric vehicles would have a corporate espionage sub-plot?