Ford moving forward with Michigan battery plant, but with 800 less jobs

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Ford Motor Co. is moving forward with a scaled back investment of an electric vehicle battery plant in southwest Michigan.

Work will restart on BlueOval Battery Park in Marshall, Ford announced Tuesday, Nov. 21, but the automaker will reduce the battery capacity by 43% and cut 800 jobs from the lithium iron phosphate battery plant. The plant will now have a 20 gigawatt-hour capacity and create 1,700 jobs. Ford originally expected the $3.5 billion plant would have 35 gigawatt hours of capacity and create 2,500 jobs.

“While we remain bullish on our long-term strategy for electric vehicles, we are re-timing and resizing some investments,” Ford said in a statement. “As stated previously, we have been evaluating BlueOval Battery Park Michigan in Marshall. We are pleased to confirm we are moving ahead with the Marshall project, consistent with the Ford+ plan for growth and value creation.”

Related: Ford pausing construction of $3.5B battery plant in Michigan

Ford paused construction on the plant in late September citing concerns about its “ability to competitively operate the plant,” as electric vehicle sales have reportedly started to soften. Ford projected it would lose $3 billion on electric vehicle sales this year. The automaker now says it is “right-sizing” the BlueOval investment as it balances “investment, growth and profitability.”

BlueOval Battery Park is a key project for Michigan as the state has been strategically trying to land major electric vehicle investments. The sprawling battery campus is being constructed on 950 acres of a 1,900-acre rural mega site in Marshall. The remainder of the mega site, deemed the MAJOR Campus, is being prepped for other non-Ford projects like a possible supplier park.

Michigan put together $1.7 billion of incentives to support the Ford project and development of the mega site. But a spokesperson for the Michigan Economic Development Corporation said Ford’s incentives will be impacted by Tuesday’s announcement.

“The value of the incentive will be reduced and adjusted based on the final scope of the project,” Otie McKinley said.

Related: Michigan gave millions to Ford’s paused mega site project. What’s been spent?

A recent analysis from the Upjohn Institute, a Kalamazoo employment and economic research firm, found the state incentives, with a current value of $1.4 billion, will ultimately lead to a $2.6 billion value to Michigan.

UpJohn senior researcher Tim Bartik said this was “particularly surprising” because of the high cost per job. But the job creation in related businesses, the project’s location in Calhoun County and using business taxes to underwrite the incentives means the benefits outweigh the costs, Bartik wrote.

In response to Ford’s announcement Tuesday, the Michigan Economic Development Corporation says it is “staying the course” to secure the state’s position as a leader in mobility and highly advanced manufacturing at the strategic site in Marshall.

“We continue working closely with our partners in the community as Team Michigan moves forward on developing a world-class site at the Marshall Area Jobs, Opportunity and Recreation (MAJOR) Campus that creates good paying jobs, brings supply chains home to Michigan, and enables us to compete to make more in Michigan,” a statement said.

Related: Michigan awards $65M to Marshall mega site, one day after Ford halts work

McKinley also noted, “while it was a reduction of jobs, it is still 1,700 jobs for Marshall.”

BlueOval Battery Park has faced scrutiny from some in the Marshall community concerned about a large industrial park scarring rural farmland. Others, including federal lawmakers, questioned Ford’s plan to license technology from Chinese battery maker Contemporary Amperex Technology Co. Ltd., or CATL.

Despite the pause in construction, Ford still expects the plant will begin producing battery cells in 2026.

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