Legacy automaker General Motors’ (NYSE:GM) Ultium Cells battery manufacturing plant in Ohio is under investigation for a chemical spill over the weekend. A Wall Street Journal report stated that the Occupational Safety and Health Administration (OSHA) is investigating the matter. The plant notified that mixing operations at the site have been halted until the area is proclaimed safe for use.
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Details of the OSHA Investigation
The Ultium plant is a joint venture between GM and South Korea’s LG Energy Solution. The plant manufactures battery cells for use in electric vehicles (EVs). A chemical named N-Methylpyrrolidone is said to have spilled in the factory during the weekend. This chemical is commonly used in the manufacturing of cathode electrodes for batteries. Notably, an Ultium spokesperson said that no workers were exposed to the leak nor injured in the process, thanks to the workers’ “swift and responsive action.”
OSHA said that exposure to the chemical could cause hazardous problems, including damaging the nervous system. The regulator is still collecting more information from Ultium Cells about the spillage and the measures taken to ensure worker safety.
Based on the details collected, OSHA will decide whether employees are still at risk because of the exposure and if it can initiate a citation. GM and LG Energy together own three Ultium Cells plants in the United States. General Motors’ foray into the EV space is largely dependent on the production of EV batteries at these plants.
The United Auto Workers Union Takes a Dig at GM
Meanwhile, the United Auto Workers (UAW) union took a dig at the Ultium plant’s management for prioritizing the company’s profits over workers’ health. The UAW claims that these “accidents are preventable and manageable.” The union also has ongoing negotiations with General Motors concerning a new labor contract and has cited the lax working conditions at the Ultium plants as a cause of concern.
The union warned that it will go on strike if a win-win deal cannot be reached. The UAW is set for a vote as soon as this week. Apart from GM, rivals Ford (NYSE:F) and Stellantis (NYSE:STLA) are at equal risk from the probable strike.
What is the Future of GM Stock?
The EV industry is in a fiercely competitive mode, with EV makers engaged in a price war. Plus, the union strike remains a looming fear for all automakers. Amid the chaos, GM has its own set of issues, such as the one at its automotive driving unit, Cruise. Recently, GM had to halve its active robotaxi fleet following several “concerning incidents” during the past week.
Analysts, too, remain split on GM’s stock trajectory. On TipRanks, GM has a Moderate Buy consensus rating based on seven Buys, six Holds, and two Sell ratings. Still, the average General Motors stock prediction of $50.33 implies a whopping 51.9% upside potential from current levels. Meanwhile, GM stock has lost 2.1% year-to-date.
