In a significant development, Ford has announced the suspension of construction activities at its Michigan battery factory for electric vehicles. While the automaker did not provide specific reasons for the shutdown, it comes amidst ongoing strikes led by the United Auto Workers (UAW). Ford stated that it is “pausing work and limiting spending on construction on the Marshall project until we’re confident about our ability to competitively operate the plant.”
Details of the Factory and Battery Tech
The Michigan battery factory, established earlier this year, was intended to produce battery technology licensed from China’s Contemporary Amperex Technology Co (CATL). It remains uncertain whether the suspension is temporary or permanent.
The factory, with a budget of $3.5 billion, was scheduled to commence operations in 2026, focusing on the production of lithium-iron-phosphate batteries for electric vehicles (EVs). This project was expected to create employment opportunities for at least 2,500 autoworkers and stimulate domestic EV battery production.
Uncertainty Surrounding the Project
The project has been marked by uncertainty, as it coincided with deliberations by the Biden Administration over regulations that could potentially restrict U.S. companies from collaborating with certain Chinese entities.
While the UAW strike against major automakers, including Ford, has expanded to 38 locations across 20 states, it remains unclear whether Ford’s decision to suspend construction is directly related to the ongoing labor disputes.
UAW’s Demands and Ford’s Response
The UAW has been demanding various concessions from automakers, including pay raises, a shorter workweek, protection against inflation, and other worker-related concessions. Ford CEO Jim Farley had previously stated that meeting these demands would force the company to reconsider its investments in electric vehicles.
Union President’s Response
UAW President Shawn Fain criticized Ford’s decision, describing it as “a shameful, barely-veiled threat” by the automaker to cut jobs. He emphasized the union’s request for a “just transition to electric vehicles” and accused Ford of pursuing a “race to the bottom.”
The suspension of construction at the Michigan battery factory adds another layer of complexity to the ongoing labor disputes and the future of EV production in the United States.
