The intensifying auto workers' strike in the United States may be an important reason for the suspension of the project. On September 25, local time, Ford Motor announced that it had suspended construction of a US$3.5 billion electric vehicle battery factory in Michigan, citing concerns about the competitiveness of operating the factory. On February 14 this year, Ford announced that it had reached a new agreement with CATL. According to the agreement, CATL will provide technical and service support for the production of Ford's new lithium iron phosphate battery factory in the United States.
A Ford spokesman said, "We are evaluating all of these considerations from a competitiveness perspective." The spokesperson did not disclose any specific reasons for the suspension of the project, but emphasized that the company has not made any final decisions on its investment plans. U.S. labor unions believe Ford's move is a strategic move to fight the auto workers' strike. As of press time, CATL had not responded to questions from China Business News reporters on this news.
The above-mentioned new lithium iron phosphate factory is located in Marshall, Michigan, USA. It is fully invested by Ford at US$3.5 billion. It is expected to be put into production in 2026. The initial design annual production capacity is about 35 gigawatt hours (GWh), and it can provide power battery packs for about 400,000 Ford electric vehicles every year.
Under this cooperation model, Ford owns 100% of the factory, including the building and factory infrastructure, while CATL will operate the factory and provide battery manufacturing technology. Regarding the above-mentioned cooperation model, some analysts said that this will allow the new battery factory to not require direct financial investment from CATL and make full use of the tax benefits of the U.S. federal government’s Inflation Reduction Act (IRA).
After the signing of the agreement, the cooperation between Ford and CATL was frequently questioned. Several U.S. Republican lawmakers have previously criticized the project and expressed concerns about Ford's relationship with CATL.
However, the recent intensifying autoworker strikes in the United States may be an important reason for the suspension of the project.
Ford, General Motors and other U.S. automakers are currently negotiating with the United Auto Workers (UAW) but have not reached an agreement. Since mid-September, the UAW has begun strikes against Ford, General Motors, etc., and the scale of the strike has continued to expand recently. On September 22, 38 parts distribution centers across the United States joined the strike. It is expected that the economic losses caused by the strike will increase exponentially. UAW President Sean Fein announced new strike locations in 20 different states on September 22, including six General Motors facilities and seven Stellantis Centers in Michigan.
In this context, Ford announced the suspension of the battery factory project, which means that the project's potential 2,600 jobs will be delayed; UAW Chairman Sean Fein stated: "Ford's decision is a shameful act of thinly veiled threats to lay off employees. In the past 20 years, three car companies have closed 65 factories. This is not enough for them, and now they want to threaten us with closing factories that have not yet opened. We are only asking for a just transition to electric vehicles, while Ford is accelerating their competition."
Dan Ives, an analyst at the brokerage Wedbush, believes: "A strike lasting more than four weeks will deal a heavy blow to GM and Ford's ambitions to manufacture electric vehicles in the first half of 2024, delaying their electrification transformation in many dimensions."