In the midst of the auto workers' strike, Ford suspended the construction of a joint U.S. plant with CATL
CATL (300750.SZ) has repeatedly encountered obstacles in building a joint U.S. plant with Ford Motor Co., Ltd.
According to Detroit News, Ford Motor announced on Monday that it was suspending construction of its battery plant in Marshall, Michigan. "Until it is confirmed that the company is able to operate the Michigan plant in a competitive manner, the company will suspend construction work on the plant and limit its construction expenditure. Ford said.
With a total investment of US$3.5 billion (25.6 billion yuan), the plant will be built by Ford Motor in partnership with CATL. In response to this matter, CATL responded to the interface news reporter that there is no information that can be disclosed for the time being.
Ford said the decision was based on multiple considerations, but declined to say whether the ongoing auto workers' strike against Ford and its city-side rivals was a factor.
Ford is currently in the midst of a strike action initiated by the United Auto Workers (UAW). The strike, which targets the three giants of Detroit Auto, namely Ford, General Motors and Stellantis, has lasted more than 10 days.
The unions want the Big Three to offer workers a 40 percent pay rise over four years, as well as improved pensions, shorter working hours and other benefits.
The Big Three say they can't afford significantly higher labor costs because they want to invest profits in the expensive transition to electric vehicles. The auto industry accounts for about 3% of U.S. gross domestic product, and Detroit automakers account for about half of the total U.S. auto market.
On Friday, UAW announced that 38 parts distribution centers of GM and Stellantis would join the strike action. As negotiations progressed, no more Ford factories joined the latest strike action.
Two days later, on Sunday, Ford said that while negotiations with the UAW had made progress in some areas, the two remained at odds on key economic issues until a new labor deal was reached.
Shawn Fain, president of the United Auto Workers, likened Ford's suspension of construction of its Michigan plant to a "shameful, barely disguised threat of layoffs."
"The Detroit Auto Triumvirate, which has closed 65 factories in the last 20 years, still doesn't feel like it's enough," he said. Now start threatening us with the closure of factories that are not yet open. Unions are simply demanding that workers be treated fairly in the transition to electric vehicles, while Ford is still reversing the charge. ”
In February, Ford announced that it would build a battery plant in Michigan, U.S., with its partner CATL.
Ford owns the new plant, while CATL provides pre-construction and operation services, as well as licenses for patented battery technology. When completed, the battery plant will have a capacity of 35 GWh, which can accommodate 400,000 new energy vehicles, employ no less than 2,500 people, and is scheduled to start production in 2026.
The construction of the plant has already encountered challenges on more than one occasion.
In July, Mike Gallagher, chairman of the U.S.-China Select Committee on Strategic Competition, and Jason Smith, chairman of the Ways and Means Committee, sent a letter to Jim Farley, president of Ford Motor Co., Ltd., asking him to elaborate on the details of the collaboration with CATL.
The letter mentions that hundreds of CATL employees will be responsible for assembling and maintaining the equipment among the plant's employees, questioning whether the two companies' partnership could help reduce the United States' dependence on Chinese battery technology.
