Ford pauses construction of EV battery plant amid UAW talks

Ford (F) halts the construction of its electric vehicle battery plant in Marshall, Michigan, citing uncertainty about the site's ability to compete with major EV makers. The facility, which had the potential to employ up to 2,500 workers, faces this setback amid the ongoing autoworkers strike against Big Three automakers Ford (F), General Motors (GM), and Stellantis (STLA).

Yahoo Finance Autos Reporter Pras Subramanian discusses the details of the plant's untimely shutdown, referring back to comments made by Ford CEO Jim Farley in March, while also commenting on President Biden's visit to United Auto Workers' picket lines in Michigan.

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Video Transcript

BRAD SMITH: Ford is pausing construction of an electric vehicle battery plant in Michigan until it's confident it can run the factory competitively, the automaker saying that in February. Ford announced the plan to build the plant in Marshall, Michigan, planning to employ about 2,500 workers to make low-cost batteries. We spoke to Ford CEO Jim Farley about the car batteries earlier this year. Take a listen.


JIM FARLEY: Batteries are the constraint here. It won't be the manufacturing site behind me. And the lithium ion batteries that we use-- both lithium and nickel are really the key constraining commodities. We normally get those from all over the world-- from South America to Africa to Indonesia and Southeast Asia.

We want to localize that here in North America, not just the mining but the processing of the materials. Actually, even if they're mined let's say in the US, nickel, most of it is sent back to China to get processed, so the big change is going to be to onshore all that capability of processing but also mining back here in the US. It will be a huge job, just like it has been for semiconductors.

BRAD SMITH: And for more on Ford's latest move and what this means for the UAW, we've got Yahoo Finance's reporter Pras Subramanian. Hey, Pras.

PRAS SUBRAMANIAN: Hey. How's it going, Brad? Yeah, so that plant there-- Ford pausing development on a $3.5 billion plant in Michigan, like you mentioned. Ford saying the company said it has concerns about competitively operating the plant. Ford declined to say what specifically changed recently on that thinking. And the company hasn't made a final decision on the plant yet.

Note that-- I want to note that Ford is also-- they're partnering with CATL-- China CATL to make these batteries, licensing their tech, so it's possible that guidance might have changed from the government as to whether they can get the credits that they were seeking by making these batteries there.

But I want to note that the UAW pounced on this, claiming the move was to punish the union-- union jobs because of labor costs. Shawn Fein said in a statement in part, "This is a shameful, barely veiled threat by Ford to cut jobs. Now they want to threaten us with closing plants that aren't even open yet. We are simply asking for just transition to EVs, and Ford is instead doubling down on their race to the bottom." So some strong words there by the UAW. We don't even really know why exactly they're pausing development on this plant.

SEANA SMITH: Well, Pras, we, of course, are continuing to follow the latest coming out of the UAW strike and President Biden heading to the UAW picket line later on this afternoon. In terms of what this signifies, how significant this is, what do you think this means here to the UAW strike and really for the workers?

PRAS SUBRAMANIAN: I mean, it brings a huge spotlight to Michigan and where President Biden will be picketing with these-- with these UAW workers for about a couple of hours starting at noon today Eastern time. There was some confusion before earlier. The president's plans were not known until late last night, a lot of-- which is sort of-- sort of odd for this planning to be so last minute and also sort of up in the air with the White House pool sort of complaining about where are they going to be tomorrow. But it turns out he's going to be in Michigan tomorrow-- today at 12:00.

Not exactly sure what site. There's Ford's Michigan assembly plant that is currently on strike there and potentially some auto supplier parts distribution centers. So anyway, the fact that he's there is a big deal. He's the first-- first sitting US president to be at a picket line-- a UAW picket line, so this is a big deal for that. And don't forget, tomorrow night, president-- former president Trump is going to be speaking in front of some workers there, so Biden sort of had to maybe jump ahead of Trump to kind of shore up his base with union workers because he was concerned that Trump was going to go after them.

BRAD SMITH: Yeah, both trying to appeal to a block of voters which are very key in this swing state. All right, Yahoo Finance reporter Pras Subramanian, Thanks.