Ford is reducing its commitment to a planned electric vehicle battery facility in the Marshall area by 800 jobs and more than $1 billion, a move that would reduce the plant’s production capacity by about 40%.
But the Dearborn automaker is resuming work at the site after a two-month hiatus and still intends to meet its goal of opening the plant by 2026, a company spokesman said Tuesday.
The announcement represents a dramatic turnaround from the promised 2,500 jobs and $3.5 billion in investments announced earlier this year by Ford and Gov. Gretchen Whitmer. Ford spokesman Mark Truby acknowledged that the company’s cuts almost certainly mean the state will cut the roughly $1.8 billion promised in taxpayer subsidies for the massive development.
“We’ve been studying this project over the last couple of months. I think we’re all aware that adoption of electric vehicles is growing, and we expect that to continue, in fact. But it’s not growing at the pace that I think we ourselves and the industry would have expected,” Truby said.
“We want to be really disciplined about how we allocate capital and think about matching future production and capacity based on demand.”
Truby said Ford originally anticipated the facility It will produce 35 GWh of batteries per year, enough to power about 400,000 vehicles. Now, the company expects the plant to have a capacity of 20 gigawatt hours, which represents a roughly 42% reduction in production — roughly enough batteries for 230,000 vehicles.
While Truby did not say exactly how much it plans to cut from the $3.5 billion investment, he said it is linked to production cuts. By 42%, this would mean a reduction of approximately $1.5 billion, creating a new $2 billion in total investment.
The company also intends to use less space at the site, which currently includes hundreds of acres west of Marshall, a small town about 35 miles east of Kalamazoo.
Representatives for Whitmer and the Michigan Economic Development Corporation, the state entity that oversees incentives for this deal and other mega sites, focused on the fact that Ford still plans to invest in the site and not on the reduction in promised investment or jobs created.
“Today’s announcement means 1,700 new jobs coming to Michigan along with billions in additional investments for the state, which will help grow the economy and put more money back into people’s pockets,” Whitmer spokeswoman Stacey LaRouche said.
MEDC spokesman Oti McKinlay said the project incentives “will certainly be reviewed in accordance with the new investment criteria.”
At this point, McKinney expects Ford and MEDC to come together to get a proposal on a reduced support package that could be presented to the board of the Michigan Strategic Fund, an entity that authorizes incentives. It remains unclear whether any changes will ultimately require legislative action.
Michigan House Republican Leader Matt Hall, of Richland Township, suggested lawmakers could push to eliminate subsidies altogether.
“If the original proposal skews Ford’s plans, hundreds of millions of dollars tied to job creation under the contract should be eliminated. The governor must adjust the size of state funding and ensure taxpayers are not left on the hook for its failure,” Hall said. He said in a statement Tuesday.
McKinley emphasized that although Ford and the state had a framework for the deal, they never executed a final agreement for the project. It takes months, if not more than a year, for such agreements to be finalized.
If the original proposal misrepresented Ford’s plans, hundreds of millions of dollars tied to job creation under the contract should be eliminated. The governor must adjust government funding and ensure taxpayers are not left on the hook for her failure.
The announcement confirms that Ford is resuming work at the plant. In late September, the company paused the widely supported project amid uncertainty over the UAW strike.
Ford surprised some policymakers and industry observers when it announced a “temporary shutdown and reduction in construction spending” at the Marshall District plant. Ford spokesman TR Reed said at the time that company work would not resume “until we are confident in our ability to operate the plant competitively.”
But that did not prevent the major contractor, Walbridge, from continuing to prepare the site; Awarded a contract worth up to $178 million to ensure the readiness of Ford’s infrastructure.
During Ford’s stop at the site, work continued on roads, sewer systems and other facilities, Jim Dorian, president of the Marshall Area Economic Development Alliance, a local entity working with MEDC at the site, said in a statement.
“We are pleased to see Ford resuming work to build the BlueOval facility that will create 1,700 local jobs,” he said.
On Tuesday, Truby explained why Ford had officially resumed work at the site.
“We’re making some strategic decisions, and this will be just another one of those as we move forward. But we’re trying to determine the right size of investment and footprint,” Truby said, referring to a previously announced plan. Delay in investing $12 billion in electric car production.
“There were a number of factors. Obviously it helps to have some certainty that, you know, we’re no longer on strike and we understand what our labor costs are going to be, overall.”
The project is a key part of a larger policy supported by Whitmer and state economic development officials. They argue that using hundreds of millions of public tax dollars to support such massive deals will ultimately revitalize communities and stimulate industries essential to Michigan’s future.
While some locals support the site, others are fiercely campaigning against it. Many local residents oppose what they see as a lack of transparency around the project, while others have concerns about potential environmental impacts.
Some are attacking Ford’s partnership with CATL, a Chinese company and the world’s largest battery manufacturer, on the site. They suggest, without evidence, a nefarious relationship between CATL and the Chinese government.
Truby confirmed that Ford still intends to work with CATL at the site, noting that the 1,700 promised jobs will all be Ford jobs.
This is a developing story. Check for updates when they become available.
Contact Dave Boucher at dboucher@freepress.com and on X, formerly called Twitter, @Dave_Boucher1.
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