Ford is halting work on a $3.5 billion plant in Marshall, Michigan, that would make batteries for electric vehicles.
The announcement came after the automaker in July projected its EV unit would lose $4.5 billion this year, about 50 percent more than planned, and that it was slowing its plans to increase EV production, according to Reuters.
The delay also comes as Ford is in the midst of talks with the striking United Auto Workers union.
“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 work in the decision, but would not speak to the UAW talks.
“We haven’t made a final decision about the investment there,” Reid said of the Marshall site.
The administration of Democratic Michigan Gov. Gretchen Whitmer agreed to give Ford $1.7 billion in incentives.
“After failing to land other high-profile Ford deals, Gov. Whitmer gave away the store to bring Ford to Marshall,” Michigan state House Republican leader Matt Hall said in a statement. “But with Democrats pushing policies that make Michigan less competitive, the $1.7 billion in subsidies and tax incentives still fell short.”
The Ford plant would use technology from China’s CATL, which led to concerns that tax subsidies would benefit a Chinese company, Reuters noted.
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This is GREAT news for Michigan and a serious blow to the #CCP. Chinese technology has no place in our country and I am glad to see this battery plant be put on hold. https://t.co/EuL1t6NnYL
— Representative Lisa McClain (@RepLisaMcClain) September 25, 2023
That led Republican Rep. John Moolenaar of Michigan to say that beyond the Ford project, the nation needs a new direction.
“While I support Ford’s decision to put the Marshall project on hold, President Biden should end his tailpipe policies and give American automakers and their employees the freedom to innovate and create the auto technologies of the future,” he said.
“Right now, Biden’s current policies force American auto companies to be more dependent on the Chinese Communist Party and the electric vehicle materials that China has a stranglehold on,” he said.
Others also said healing the plant could be a step in the right direction.
“We applaud that the construction of this reckless deal has been halted,” former U.S. Ambassadors Peter Hoekstra and Joseph Cella, co-founders of the Michigan-China Economic and Security Review Group, said Monday, according to Fox Business.
“From the outset, Ford Motor Company, the State of Michigan, the Michigan Economic Development Corporation and all other parties to it have been irresponsible in advancing this deal.”
“There was zero strict scrutiny or due diligence, concerns of our intelligence and national security agencies were ignored and mocked,” they said. “The halting of the construction is the natural result of the consent of the governed being ruptured by government and business elites.”
Ford has also voiced a concern that the China connection would mean the plant’s products would not be covered by the proposed EV tax credit contained in the Inflation Reduction Act, Reuters noted.
The act bans the credit from being used for a vehicle if its battery components are made or put together by a “foreign entity of concern.”
