DETROIT — Ford Motor Co. stated Monday that it is pausing construction of a $3.5 billion electrical automobile battery plant in Michigan till it’s assured it could possibly run the manufacturing unit competitively.
The transfer comes as the corporate is within the midst of nationwide contract talks with the United Auto Workers union, which needs to constitute workers at battery factories and win them best wages.
The UAW went on strike towards Ford and the opposite two Detroit automakers, General Motors and Stellantis, on Sept. 15. The union to start with focused one automobile meeting plant from every automaker, and closing week expanded it to portions warehouses. But Ford was once spared from the growth for the reason that union stated development was once being made in negotiations.
In February, Ford introduced plans to construct the plant in Marshall, Michigan, using about 2,500 workers to make lower-cost batteries for a wide range of new and present cars. Marshall is set 100 miles (160 kilometers) west of Detroit and is close to two primary interstate highways.
But Ford spokesman TR Reid showed Monday that plant construction has been paused and spending has been restricted on it.
“There are a number of considerations,” he stated in an electronic mail. “We haven’t made any final decision about the planned investment there.”
There additionally has been native opposition to the manufacturing unit location, and grievance of a Chinese corporate’s involvement within the plant, which might be run by way of an entirely owned subsidiary of Ford.
A message was once left Monday looking for remark from the UAW.
The manufacturing unit was once to start out making batteries in 2026, cranking out sufficient battery cells to offer 400,000 cars in line with yr, Ford stated.
It would produce batteries with a lithium-iron-phosphate (LFP) chemistry, which is less expensive than the present nickel-cobalt-manganese chemistry now utilized in many EV batteries. Consumers may just then make a choice from a battery with decrease vary and value, or pay extra for upper vary and gear.
Ford stated the subsidiary would personal the manufacturing unit and make use of the workers. But China’s Contemporary Amperex Technology Co. Ltd., or CATL, which is understood for its lithium-iron-phosphate experience, would provide era, some apparatus and workers.
Republican State Rep. Sarah Lightner, whose district comprises Marshall, stated Monday the news from Ford “came out of the blue.”
“We’re still gathering information because there’s a lot of moving parts,” Lightner stated.
While the state had allotted just about $1.7 billion in incentives for the venture, no longer all of the cash has been despatched out and there are clawbacks in position, added Lightner, who’s the minority vice chair of the House Appropriations committee.
“Obviously, the strikes could probably have something to do with it,” Lightner stated.
Sam Abuelsamid, an analyst with Guidehouse Insights, stated Ford’s choice may well be associated with the strike, however much more likely displays opposition to the plant amongst other people in a conservative rural house of southern Michigan.
“They don’t want the factory, they don’t want the traffic, and they don’t want anything associated with a Chinese company,” he said.
Abuelsamid said he was surprised that Ford didn’t select a site closer to Detroit, which he thinks would be less hostile to the idea of a battery plant using a Chinese company’s intellectual property.
The plant was announced at a time when U.S.-China relations are strained, and the Biden administration is offering tax credits for businesses to create a U.S. supply chain for EV batteries. To get a full $7,500 per vehicle U.S. tax credit to customers, EV batteries won’t be able to have metals or components from China in them.
The structure of the deal allows Ford to take advantage of U.S. factory tax credits in the Inflation Reduction Act.
Earlier this year Virginia dropped out of the race for the same Ford plant after Republican Gov. Glenn Youngkin characterized the project as a “front” for the Chinese Communist Party that would raise national security concerns. At the time Virginia had not offered an incentive package to Ford.
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Associated Press writers Joey Cappelletti in Lansing, Michigan, and David Koenig in Dallas contributed to this record.
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