Ford Halts Construction of Michigan Battery Plant Amid UAW Strike
Automaker Ford has made the decision to pause construction of a new $3.5 billion electric vehicle battery plant located in southern Michigan. This announcement comes as the United Auto Workers (UAW) strike against Ford, General Motors (GM), and Stellantis intensifies, with the transition to electric vehicles becoming a major point of contention.
The plant, planned to commence production in 2026, aimed to employ 2,500 individuals on its 384-hectare site near the city of Marshall. However, Ford spokesman TR Reid stated that no final decision has been made regarding whether the plant will ultimately become operational. Reid highlighted multiple considerations contributing to the pause, without explicitly mentioning contract negotiations with the UAW.
UAW President Shawn Fain responded to the decision, characterizing it as a “thinly veiled threat by Ford to cut jobs.” Fain emphasized the union’s demand for a fair transition to electric vehicles and expressed concerns over potential job losses and reduced wages due to the significant reduction in labor required for electric vehicle production. Job security has consequently become a crucial aspect of the ongoing negotiations.
The political landscape surrounding the battery plant has also become contentious. Reuters reports that some politicians have criticized Ford’s utilization of “Chinese technology” at the facility, even though the factory was set to be owned and operated solely by Ford. Plans originally involved Ford operating the plant as a wholly owned subsidiary, with batteries manufactured in collaboration with Chinese company Contemporary Amperex Technology Co., Ltd. (CATL), the world‘s largest battery manufacturer.
The passage of the Inflation Reduction Act (IRA) by the US Congress further complicates the situation. The legislation aims to restructure tax credits for electric vehicles. Under the act, consumers who purchase an electric vehicle are eligible for tax credits based on the vehicle’s manufacturing origin, battery components, and sourcing of battery minerals within the United States.
In addition to the Michigan plant, Ford has already announced plans for battery plants in Kentucky and Tennessee, partnering with South Korean-based company SK Innovations. These developments reflect Ford’s ambition to produce 2 million electric vehicles worldwide by the end of 2026.
As the UAW strike continues and Ford faces mounting pressures from various stakeholders, the future of the Michigan battery plant remains uncertain. The outcome of ongoing negotiations and the potential impact on the electric vehicle industry will be closely watched by industry observers.