Ford puts brakes on $3.5B BlueOval Battery Park in Marshall

• Ford said it is pausing work on its $3.5 billion EV battery factory in Marshall
• The project, which divided the community, received $2.2 billion public subsidies, including tax breaks
• The move comes as both parties are raising concerns about billions of dollars in public incentives

Ford Motor Co. is halting development of its $3.5 billion electric vehicle battery factory in Marshall, saying that a final decision has not been made about the automaker’s investment in the mega-project.

"We're pausing work, and we're going to limit spending on construction at Marshall until we're confident about our ability to competitively run the plant," Ford spokesman T.R. Reid confirmed to Bridge Michigan on Monday.  

Reid said a "number of considerations," which he didn’t disclose, influenced the Dearborn-based automaker’s move, which comes as the United Auto Workers union is on strike at a Ford factory in Wayne along with about 40 other Detroit automaker operations in the U.S.

Related:

• Gov. Whitmer’s SOAR incentive fund, once a triumph, now faces headwinds
• Ford EV battery plant on Marshall Michigan megasite gets $1B in incentives

Reid would not say if the strike is a factor, The Detroit News, which was first to confirm the news, reported. The UAW is pressing for wage hikes and job security measures amid the EV transition, leaving automakers including Ford warning that their long-term profitability could be hindered by increased labor costs. 

Ford’s decision came a day before President Joe Biden visits Michigan to support striking UAW members walking a picket line, and two days ahead of former Republican President Donald Trump coming to the state to court union workers’ support. Both men are campaigning for president in 2024. 

Beyond the strike, the Marshall plant project has been targeted by some local community opposition that led to litigation by The Committee for Marshall - Not the Megasite and community division over the rural area west of Marshall becoming a massive industrial site.

Ford announced BlueOval Battery Park in February, saying it would use 900 acres acquired by local economic developers to build an LFP battery plant to make EVs. The location, near I-94 and I-69, offers Ford access to its several factories in Michigan, as well as in Kentucky, including Louisville and the new BlueOval Battery Park under construction in nearby Elizabethtown.

Michigan’s stake in the Marshall deal — in exchange for an estimated 2,500 jobs — totals $2.2 billion in incentives, a local tax break worth about $700 million and land preparation.

The state subsidies for the project and other mega deals in the state have drawn scrutiny from both Democrats and Republicans, who in part question the value of the jobs. At Ford’s battery site in Marshall, about 80 percent of them would start at $20 per hour, or about $41,600 per year, far less than the state’s median earnings, which were $55,432 in 2022. 

Ford’s decision on Monday is adding urgency to their questions. 

“We’re evaluating the clawbacks … that are in their agreements with the (Michigan Economic Development Corporation), trying to evaluate how many dollars went out the door,” said Rep. Sarah Lightner, R-Springport, who voted against the subsidies. 

Gov. Gretchen Whitmer “insisted on paying a premium to have Ford stay here,” Lightner said. “I thought the return on investment wasn’t there.”

“They basically need to see if this project is going to be feasible despite getting billions in taxpayer money,” Lightner added.

State Sen. Mallory McMorrow, D-Royal Oak, told Bridge on Monday she thinks the project’s pause is temporary.

“I’m confident Ford will come through,” she said. 

McMorrow, chair of the Committee on Economic and Community Development, said she is planning to introduce a package of bills to reform the state’s incentives. Her goal is to use incentive dollars toward public improvements that could attract business — like improving child care and education — and reduce direct subsidies.

The Ford move, she said, reminds her of when Amazon’s HQ2 project in Virginia was put on hold during a tech downturn. 

Because incentives there funded items that improved roads and the talent pipeline, she said, “residents there are still set up to succeed despite the change in the company’s timeline.”

In Marshall, land acquisition and preparation, including adding roads and high-powered utility service, already is under way. The work is fueled by nearly $1 million awarded to the Marshall Area Economic Development Alliance (MAEDA), which assembled the group of parcels, many long used for farming, from among several owners. 

MAEDA CEO James Durian told Bridge last summer the project is significant for the community located east of Battle Creek due to the 2,500 projected jobs it will create, including for many people who do not hold college degrees.  The factory was to open in 2026.

​​“We hope current negotiations between Ford and the UAW conclude in a mutually beneficial manner and we remain confident this project will continue as planned once these negotiations are complete,” Durian said in a statement.

Ford [NYSE: F] stock closed at $12.58 on Monday, giving it a $50 billion value based on outstanding stock shares.