Tennessee and Kentucky battery plants for Ford electric vehicles on track for $9.2 billion federal loan

Construction money would secure a significant portion of Ford’s big swing funding in both states.

Ford’s plans include two battery plants in Kentucky and one in Tennessee, each through a joint venture with battery partner SK On of South Korea. Additionally, there will be a Ford assembly plant in Tennessee capable of building up to 500,000 electric pickup trucks per year. The companies plan to invest $11.4 billion in the projects.

The three battery plants combined are expected to create 5,000 construction jobs, as well as 7,500 operating jobs once the plants are operational, the Department of Energy said in its announcement on Wednesday.

The loan would come from the Advanced Technology Vehicle Manufacturing Loan Program. The company – named BlueOval SK under the joint venture – must meet important milestones before the deal is finalized.

“We are thrilled that the Department of Energy is joining BlueOval SK in our vision to electrify the future of mobility,” Robert Rhee, CEO of BlueOval SK, said in a statement to media. “BlueOval SK will make full use of this loan as we create 7,500 good American jobs, strengthen critical national supply chains, and produce high-quality batteries for future Ford and Lincoln electric vehicles here in Tennessee and Kentucky.”

However, the announcement drew heavy criticism from the United Auto Workers union, which called it a “massive $9.2 billion loan to Ford Motor Co. through the Department of Energy.” to create 7,500 jobs on secondary roads without regard to wages, working conditions, union rights or retirement security.

The department’s loan office said it “works with all borrowers to create well-paying jobs with strict labor standards during construction, operation and throughout the life of the loan and to adhere to a strong community benefits plan”.

Ford said its assembly plant and battery plant in rural Stanton, Tennessee, will employ about 6,000 people with an investment of about $5.6 billion. Ford plans to start production by 2025.

Before landing the Ford project, Tennessee had invested more than $174 million in the unused megasite outside Memphis where the factories are being built. Tennessee lawmakers have pledged to spend nearly $900 million on state incentives, infrastructure upgrades and more as part of a sweeping plan with Ford. The deal included $500 million in capital grant funds.

Production is also expected to start in 2025 at the two battery manufacturing plants being built in Glendale, Kentucky. The company will employ 5,000 people to produce batteries for future Ford and Lincoln electric vehicles. Ford and its battery partner have invested $5.8 billion in the Kentucky project.

The Kentucky State incentive program for the project includes a $250 million loan.

The Department of Energy said the federal loan helps support several of Biden’s clean energy goals, including priorities for domestic manufacturing of clean energy and transportation technologies and a push for electric vehicles. account for at least half of all new cars purchased in the United States by 2030.

News of the loan comes about three weeks before the UAW opens contract talks with Ford, Stellantis and General Motors.

Newly elected UAW President Shawn Fain criticized the companies, saying they were making billions without fairly compensating workers. Many in the industry expect strikes against one or more companies as the union tries to achieve general wage and cost of living increases and to eliminate levels of workers who receive different wages, sometimes to do the same job.

In the Tennessee and Kentucky projects, Ford refrained from offering explicit support for union membership at its new plants. The company said it was up to the workers to decide.

“We have been absolutely clear that the shift to jobs in electric motors, battery production and other electric vehicle manufacturing cannot become a race to the bottom,” Fain said in a press release. on the Ford Battery Project Loan. “Not only is the federal government not using its power to reverse the tide, but it is actively funding the race to the bottom with billions of taxpayer dollars.”

The loan also follows the Department of Energy’s recent decision to abruptly reject a $200 million loan for an electric vehicle battery installation project in Kentucky. The department did not explain the reason for the decision, which came after some congressional Republicans argued that the Texas-based company Microvast had inappropriate ties to China.

Microvast refuted this claim saying that the Chinese government and the Communist Party have no ownership in the company and do not control or influence its operations.


Associated Press reporters Tom Krisher in Detroit and Matthew Daly in Washington contributed to this report.

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