Ford Motor Company (NYSE:F) has announced the temporary suspension of operations at its $3.5 billion battery facility in Michigan, which produces cost-effective lithium iron phosphate batteries. The automaker cited the need to regain competitiveness as the reason for the halt, refraining from disclosing specific details behind the decision.
This development comes on the heels of Ford’s February announcement to establish a plant in Michigan for localized battery production in the United States. Under the agreement with Chinese partner CATL, Ford’s subsidiary was set to manufacture battery cells using CATL’s LFP battery cell technology and services. The duration of this production suspension remains uncertain.
Ford is currently in contract negotiations with the United Auto Workers (UAW), and this suspension follows a strike initiated by the UAW against Ford, General Motors, and Stellantis, despite Ford’s increased offer to the union. The decision also coincides with congressional committees launching an investigation into Ford’s licensing agreement with CATL in July.
Both the UAW and Congress advocate for plant workers to receive wages on par with assembly and engine plant workers.
The Michigan facility was a key component of Ford’s commitment to invest $50 billion in electric vehicles worldwide through 2026. The automaker has ambitious plans to achieve an annualized EV production capacity of 600,000 units globally by year-end 2023 and aims for 2 million EVs by the end of 2026.
Gretchen Whitmer, Governor of Michigan, expressed the intention to continue advocating for successful negotiations between the Big Three automakers and the UAW to bring local workers back to their jobs.
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