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Ford ‘pausing’ construction of Michigan EV battery plant

Construction equipment can be seen on property where Ford planned to build a 2.5-million-square-foot electric vehicle battery manufacturing facility, in Marshall, Michigan, Sept. 5, 2023. (David Guralnick/The Detroit News/TNS)

Ford Motor Company has halted construction of a $3.5 billion electric vehicle battery plant project in near Marshall, Michigan, a company spokesman confirmed Monday.

“We’re pausing work, and we’re going to limit spending on construction at Marshall until we’re confident about our ability to competitively run the plant,” Ford spokesman T.R. Reid told The Detroit News on Monday.

Reid said a “number of considerations” were at play in the company’s business decision but wouldn’t say whether the United Auto Workers’ ongoing strike was a factor.

Michigan Gov. Gretchen Whitmer speaks at a press conference at Ford Ion Park in Romulus, Michigan on Feb. 13, 2023. (Robin Buckson/The Detroit News/TNS)

“We haven’t made a final decision about the investment there,” Reid said of the Marshall site.

The Ford spokesman said the pause in construction is effective Monday.

The decision was announced on the eve of President Joe Biden traveling to Michigan on Tuesday to rally striking UAW workers, who have walked off the job at Ford’s Michigan Assembly Plant in Wayne, Michigan. On Wednesday, former President Donald Trump is planning a town hall-style event in Macomb County to appeal to auto workers whose jobs he contends are at stake in the transition to EVs.

The 2.5-million-square-foot battery park was to be run by a wholly-owned subsidiary of Ford called “Blue Oval Battery Park Michigan.” The plant would employ 2,500 people with pay ranging from $20 to $50 an hour.

Ford planned to license battery technology from China-based Contemporary Amperex Technology Co. Ltd., or CATL — the world’s leading LFP battery maker — but CATL would not receive state tax incentives, Ford officials told lawmakers.

The Dearborn, Michigan-based automaker announced on Feb. 13 that it planned to invest about $3.5 billion in an electric vehicle battery plant park in Marshall. As part of the deal, Ford secured about $210 million in direct tax incentives plus a 15-year property tax abatement worth about $775 million over the life of the tax break.

There was also roughly $750 million set aside for site prep at the location, with $299 million allocated for a local economic development organization and $330 million pushed toward the Michigan Department of Transportation budget for expanding roadways and freeway connections for the presumed Ford plant’s truck traffic.

The Marshall Area Economic Development Alliance assumed responsibility of site preparation of the large tract of farmland west of Marshall for the battery manufacturing park. State officials have stressed that Marshall’s site prep there — paid for with roughly $420 million allocated to the group since the start of the year — is separate from Ford’s construction of the EV battery plant.

Michigan Economic Development Corporation CEO Quentin Messer said in February that the site prep work would have needed to be completed for any development, but Ford’s plans for the location accelerated the work.

The Ford battery plant in Marshall was one of four cornerstone projects around which lawmakers and Gov. Gretchen Whitmer, in 2021, built the state’s incentive program, the Strategic Outreach and Attraction Reserve Fund.

The project was met with some pushback from the community, which opposed the behind-the-scenes negotiations that landed the deal, questioned the use of agricultural land for the project and expressed concerns about Ford’s relationship with CATL to obtain the battery technology to be produced at the factory.

Some Republican congressional leaders had sharply criticized the project and asked Ford CEO Jim Farley in July for copies of the licensing agreement and communications between Ford and CATL, as well as communications between Ford and the Biden administration.


© 2023

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