Ford suspends construction of Michigan battery plant
We can say that the automobile industry, as we know it, continues to be turned upside down. Whether it is the pandemic, the shortage of components, the acceleration of the electrification of transport, the rise in interest rates and, now, the strike on the United States side, all have a role to play in the management future of manufacturers. It is with this in mind that Ford announced last February its intention to build a new battery factory in Michigan to support its electrification and supply plan. However, it appears that the project is now on hold, according to the manufacturer’s announcement on Monday.
An important project on pause
This investment of 3.5 billion US dollars was announced last February for this new battery factory, in partnership with the Chinese company CATL. However, Ford announced yesterday that it had suspended work and cited concerns about its ability to operate it profitably and competitively. The manufacturer, however, remained silent on the exact reasons which prompted it to make this decision.
This announcement comes at the same time as the United Auto Workers (UAW) initiated a walkout that is still raging across the United States. Meanwhile, Shawn Fain, president of the UAW, accuses Ford of wanting to use the new plant as a pressure point at a time when broader contract negotiations between the union and automakers appear to be making no progress.
A factory that does not attract unanimous approval
According to information obtained from the American side, this factory would not be unanimously supported. Indeed, Republicans in Congress were opposed to this new battery factory in Michigan, since they believed that it could facilitate the shift of American subsidies to China. They also feared that Ford would become dependent on this Chinese company’s technology.
LFP (lithium-iron-phosphate) batteries in play
In its announcement made at the beginning of the year, this new factory was to produce lithium-iron-phosphate (LFP) batteries and create 2,500 jobs, starting in 2026. When it opened, the factory was to make it possible to add some 35 gigawatt hours of LFP battery capacity to the manufacturer and allow it to produce 400,000 additional electric vehicles annually.
Currently, the fate of this Ford battery factory appears to be on ice. We will have to wait for news from the manufacturer soon in order to know the next developments. However, it is reasonable to believe that more news will be known, once the strike is over and agreements reached between the manufacturer and the UAW.
