Michigan 'Aggressively' Eager To Receive Ford And Its Chinese Battery Partner's New $3.5 Billion Project

Feb. 01, 2023 4:58 PM ET by Gerhard Horn Industry News / 6 Comments

The project will create 2,500 jobs in Michigan.

Michigan is doing the most to secure a deal with Ford-CATL to secure the lithium iron phosphate battery project, reportedly worth $3.5 billion. More importantly, this significant investment from Ford and the Chinese-based Contemporary Amperex Technology Co. Ltd will create 2,500 jobs.

Automotive News spoke to several people involved in the lobbying process, and it's no secret that the state wants it badly. According to Quentin Messer, CEO of Michigan Economic Development Corporation, the state is competing aggressively for the project.

"Michigan is always talking to Ford and any of our large employers," Messer said to the AN's affiliate, Crain's Detroit Business. "We talk in general about making sure that Michigan remains a competitive environment for opportunity."

Ford

"There's a lot of competition for this opportunity, both across the US and also our friends in Canada and also in Mexico," added Messer. "So we are aggressively competing and out-hustling and out-competing, and we'll see what happens."

Ford has chosen not to stay silent, but its official comment doesn't reveal much. "We haven't described or confirmed specific sites - plural - that are or aren't being considered. Or even the states in which they're located," said Ford spokesman T.R. Reid to Crain's.

It is in Ford's interest to keep business dealings of this magnitude secret until a deal is confirmed, but James Hohman, director of fiscal policy at the Mackinac Center for Public Policy, takes issue with this.

"I think a lot of these major companies that have a factory to sell are afraid of that kind of blowback, so they're hosting their competitions in secret, and that's an inappropriate way to do business," said Hohman.

Ford

Michigan already has a 1,900-acre site ready for a transformational project. There's also another site being readied in the Mundy Township outside of Flint, and a site in the Eagle Township near Lansing is closest to completion.

The latest research suggests that the average salary for a factory-line assembler ranges from $40,000 to $50,000 per year, with factory-related wages going up to $118,000 for a Production Manager. Keeping these figures in mind, it's easy to see how much of an impact this investment would have on Michigan - not just for the 2,500 employees who would get work but also for all the places they'll spend their hard-earned wages at.

But we still don't know if Michigan is even in the running, although it would look good for the Dearborn-based operator to build a megasite in its home state. Ford is likely keeping its lips sealed to avoid another controversy like the one that flared up a few days ago.

Ford

Ford has yet to make a decision, but that didn't stop Virginia Governor Glenn Youngkin from banning the American automaker and its Chinese partner from setting up shop in his state. CarBuzz received flack for running the article, but Governor Youngkin genuinely stated that the proposal would serve as a front for the Chinese Communist Party. Following the shocking outburst, the general consensus seems to be that Youngkin was scoring political brownie points before a possible presidential run in 2024, and Ford got caught in the crosshairs.

The deal will not only be good for whatever state Ford decides on, but more Ford models will likely qualify for a portion of the tax credits provided by the new Inflation Reduction Act. The way it's set up, a car receives 50% of the $7,500 if final assembly takes place in the USA and another 50% if a certain percentage of the battery components are sourced in the USA.

We think 50% of $7,500 is better than 0% off a Mustang Mach-E or any other EVs it has planned for the future.