Ford has announced that it is temporarily pausing the construction of its $3.5 billion electric vehicle battery plant in Michigan. Although there is an ongoing strike by the United Auto Workers union and Republican lawmakers scrutinizing Ford’s Chinese partner, the decision to pause construction is reportedly based on the plant’s economic viability rather than the strike. Ford spokesperson TR Reid stated that the company is limiting spending on the project until they are confident about the plant’s competitive operations. No final decisions about the investment have been made yet.
The proposed battery plant near Marshall, Michigan was expected to provide employment for around 2,500 workers and produce enough batteries to power approximately 400,000 electric vehicles per year. Ford had initially announced the Michigan plant as a way to diversify its battery profile and move away from costly nickel cobalt manganese (NCM) batteries. The company aims to manufacture lithium iron phosphate batteries in collaboration with Chinese partner Contemporary Amperex Technology Co. starting in 2026.
However, Contemporary Amperex Technology Co. has faced accusations from some Republican lawmakers of having affiliation with the Chinese Communist Party. These allegations have raised concerns and scrutiny around the partnership.
The announcement regarding the pausing of the battery plant’s construction comes in the midst of negotiations with the United Auto Workers union. The union has been on strike against Ford, General Motors, and Stellantis since September 15, demanding better wages and representation for workers at battery factories. The strike initially targeted one vehicle assembly plant from each automaker but later expanded to include parts warehouses.
In response to Ford’s decision, UAW President Shawn Fain called it a “shameful, barely-veiled threat” to cut jobs. He criticized the automakers for shutting down 65 plants over the last 20 years and now potentially closing plants that are not even open yet.
Overall, Ford’s decision to pause construction on the electric vehicle battery plant is driven by concerns over economic viability rather than the ongoing strike or scrutiny of its Chinese partner. The future of the plant and the collaboration with Contemporary Amperex Technology Co. remains uncertain.
Sources:
– AFP
– Bloomberg
– Reuters