Ford lied about the eventual size of battery plant, but perhaps that’s a good thing because there is now a concerning link between lithium-ion batteries, commonly used in electric vehicles, and the spread of harmful per-and polyfluoroalkyl substances (PFAS), also known as “forever chemicals.”
From the Detroit News:
The Michigan Economic Development Corp. on Tuesday reduced incentives to Ford Motor Co. after slower-than-expected electric vehicle sales resulted in the Dearborn automaker pulling back on plans in Michigan, including at its rising battery plant in Marshall.
The revised project for the BlueOval Battery Park Michigan in the south-central part of the state calls for a maximum investment of $3 billion and a minimum investment of $2.5 billion, according to a briefing memo considered by the MEDC's governing body, the Michigan Strategic Fund board. That's down from $3.5 billion from before Ford announced in November it was shrinking the project by 43% and its job creation by 32%. The revised incentive package now is valued between approximately $384 million and $409 million, down from almost $1.035 billion.
Ford Motor Co.'s BlueOval Battery Park Michigan site in Marshall is 20% complete in July 2024. The Michigan Economic Development Corp. on Tuesday approved a scaled back incentive package after Ford announced a smaller scope for the project last year.
Ford also received approval for incentives for a $2.014 billion investment into 10 Michigan manufacturing sites to create 3,260 jobs. It met previously approved objectives for total investment and overall job creation, but Ford fell short of expected job creation specifically at the Dearborn Electric Vehicle Center after becoming a one-shift operation there in April in response to where demand was for the all-electric F-150 Lightning truck. Half of 1,400 the affected workers transferred to Ford's Michigan Assembly Plant in Wayne building Bronco SUVs and Ranger pickups, while others transferred to other Ford sites or received buyout packages under the company's contract with the United Auto Workers.
As a result, the company and the quasi-government economic development agency agreed to forgo an almost $101 million Critical Industry Program grant and modified a State Essential Services Assessment exemption to allow investment in qualified manufacturing personal property over the 15-year term.
Contracts for the previously approved terms hadn't yet been signed and disbursements hadn't happened, according to MEDC officials.
Ford has said it has delayed or eliminated $12 billion in planned EV investments since sales of all-electric vehicles have been slower than many in the industry anticipated. A majority of car buyers remain skeptical of adopting EVs because of higher prices, range anxiety, limited access to public charging, concerns over grid reliability and other related matters.
"The restructured incentive package," MEDC CEO Quentin Messer Jr. said in a virtual briefing ahead of the MSF board meeting, "will appropriately address Ford's revised project scope, balancing the company's investment in Michigan and allowing the company to proceed with establishing a new EV battery manufacturing facility in Marshall."
Added Tony Reinhart, Ford’s director of state and local government affairs, in a statement: “We are grateful to the Michigan Strategic Fund board and the Michigan Economic Development Corporation for their support as we build upon Ford’s strong history of job creation and investment in Michigan. We are nimbly adjusting our manufacturing operations to match evolving customer demand and the Michigan Strategic Fund board is revising its incentive offers accordingly.”
The wholly Ford-owned Marshall battery plant is slated to open in 2026 and is about 20% complete, the automaker said on Tuesday. The automaker is forming the plant's leadership now. Scott Davis, CEO of BlueOval Battery Michigan LLC, will head the operation. He is a 17-year resident of Marshall, according to the company.
Construction progresses on Ford Motor Co.'s BlueOval Battery Park Michigan site in June 2024. The Michigan Economic Development Corp. on Tuesday approved a scaled back incentive package after Ford announced a smaller scope for the project last year.
The 1.8 million-square-foot plant will produce lithium-iron-phosphate batteries, technology that Ford is licensing from Chinese battery maker Contemporary Amperex Technology Co. Ltd. because it's less expensive to produce than traditional nickel-manganese-cobalt batteries, though it's also less energy-dense.
“BlueOval Battery Park Michigan will play an important role in our plan to help make electric vehicles more accessible and affordable by producing low-cost LFP batteries in the U.S. and not relying on imports,” Lisa Drake, Ford’s vice president of electric vehicle programs and energy supply chain, said in a statement. “We continue to make great progress establishing America’s first automaker-backed LFP battery plant right here in Michigan.”
The plant is expected to have a capacity of 20 gigawatt hours of capacity, down from the initially expected 35 gigawatt hours. Ford has said under the new plans, the plant will create 1,700 jobs, down from 2,500 jobs, though the revised plan considered by the MSF board says as many as 2,100 jobs could be created.
The revision also shows an increased starting wage at the site to $25 per hour, up from $20, with the average wage at the site rising to $25.50 per hour, up from $21.70. That would put total annual payroll at between more than $90 million and $111 million, down from almost $113 million.
UAW-represented employees at the battery plant in northeast Ohio's Warren owned by Ultium Cells Inc., the joint venture between General Motors Co. and Korean battery manufacturer LG Energy Solution Ltd., voted last month to ratify a new agreement that granted most workers an immediate raise of $3.59 per hour. The starting wage rate upon ratification was $26.91 per hour with annual increases pushing it up to $30.88 in 2027.
Ford's contract with the UAW paved the way for a card-check system for the UAW to organize workers at the Marshall plant. That's an easier path to unionization than a traditional National Labor Relations Board election.
Ford's joint venture with Korean battery partner SK On Co. Ltd. said in October it was increasing the wages for maintenance technicians and associate technicians to between $24 and $27.50 per hour based on experience for when its plants in Tennessee and Kentucky begin production as early as next year. Ford's contract with the UAW doesn't pave a card-check path for those sites.
The new incentive package for the Marshall site includes a Critical Industry Program grant of between $141 million and $166 million, up from $210 million. There is a State Essential Services Assessment exemption of more than $18 million. The original SESA was included in an estimated almost $773 million in tax abatements as a part of a Renaissance Zone that is no longer a part of the package. Instead, a Public Act 198 abatement designed to incentivize manufacturers to build new facilities was calculated based on the plant's square footage. That, combined with a state education tax abatement. is expected to be almost $225 million, up from more than $52 million under the original plan.
Details of Strategic Site Readiness Program awards to the Marshall Area Economic Development Alliance also were amended to address the smaller scale of the project. The award amounts, however, were unchanged.
bnoble@detroitnews.com
@BreanaCNoble