Michigan wants to lead the United States in electric vehicles. Ford has turned elsewhere.
The Dearborn-based automaker chose Tennessee for what it called “the largest, most advanced and efficient automotive production campus in Ford history.” Blue Oval City will cover 3,600 acres northeast of Memphis and employ 6,000 people.
And Ford turned to Kentucky to have its twin battery factories built with partner SK Innovation, a battery cell supplier, on 1,500 acres southwest of Louisville.
With the pair of announcements of new facilities, Ford’s combined investment in electric vehicle batteries has eclipsed the total investment made by all automakers in Michigan’s electric and autonomous vehicles over an entire decade. MichAUTO, the auto arm of the Detroit Regional Chamber of Commerce, said $ 10.6 billion was invested in Michigan from 2010 to 2020, nearly $ 1 billion less than the value of the two new ones. factories.
Asked about the Tennessee and Kentucky deals, Whitmer said Wednesday Ford had not seriously negotiated with Michigan over the factories, which the head of the Michigan Economic Development Corporation also said earlier in the week.
The state had put in place multi-million dollar incentives for other Ford projects in the state, including helping the automaker this week save around $ 6 million on its $ 265 million investment. in the Dearborn truck plant when he plans to develop the electric production of the F-150 Lightning there.
“I’m always looking to make Michigan more competitive and always keen to put solutions on the table,” Whitmer told reporters after signing the state’s $ 70 billion budget for the next fiscal year. “But we needed a real opportunity to do it. And that was really not the case here.
But Ford said Michigan didn’t have what it needed for the massive projects, which company officials said would generate 11,000 direct jobs and indirectly lead to thousands more job opportunities in the city. the regions where the factories will be built. Among the selection factors where Michigan currently cannot compete, said CEO Jim Farley, are low utility costs and adequately sized factory sites.
“The location decisions for our new mega campus were based on several factors – starting with the size of the site, shovel readiness and proximity to other EV sites, transportation and other key services.” Ford spokesman Martin Gunsberg said in Bridge Michigan.
Gunsberg continued, “Michigan did not have the type of sites needed for this project, so they weren’t part of the formal bidding process.”
A week before Ford’s announcement, heads of state and business leaders at the annual Mackinac Policy Conference spoke of Michigan’s potential “to be at the epicenter of the next decade of automotive production and innovation. In part because the state owns a third of all battery production and development, according to a MichAUTO report.
“I’m laser-focused on growing our economy, creating well-paying jobs, and building the future of mobility and electrification right here in Michigan,” Whitmer said at a conference press at the political rally, where she appeared with Quentin Messer, the new CEO. of MEDC and Matthew Godlewski, Ford’s vice president of government relations.
Godlewski cited $ 7.7 billion in investments Ford has made in the state since 2016, including in the Mobility Innovation District under construction at Michigan Central Station in Detroit.
“When you look at these investments in Southeast Michigan, you can see that we are creating a hub for advanced vehicle research, engineering, design, test and manufacture,” Godlewski said.
Ford has said it expects 40 to 50 percent of its global sales to be fully electric by 2030.
Godlewski did not mention at the time the new factories planned for Tennessee and Kentucky.
Thelen, the economic development strategist, called Ford’s decision a “setback for Michigan.” He said the company’s investment in the southern states was reminiscent of the closure in the early 1990s of General Motors Corp’s Willow Run assembly plant in Ypsilanti Township, when GM chose to consolidate production. in Arlington, Texas.
“This decision has been a wake-up call for our state, which has led to the development of an aggressive and robust set of economic development programs and strategies, which have unfortunately faded away over the past decade,” said Thelen.
Among those efforts was the Good Jobs for Michigan tax incentive program, which expired in 2019, despite the recent request from the Detroit Regional Chamber and other business groups for the Legislature to reinstate it. It had started under the administration of Republican Governor Rick Snyder, who was initially against tax incentives before signing the law in 2017, saying the state needed a recruiting tool for large companies.
Thelen said Wednesday that “the way we respond today will set the course for the next generation of Michigan’s economic future.”
To maintain or expand the auto industry’s investments in Michigan, Thelen said the state needs to take aggressive action, including:
- Ready-to-fit sites for companies to build electric vehicle-related facilities and other large-scale job-generating projects.
- Economic incentive tools that mirror those of other states.
- Competitive utility rates for large scale projects.
- Workforce training for high-tech jobs emerging from the VE transition.
Whitmer addressed some of the workforce training at the Mackinac Island press conference, announcing that up to $ 5 million will be spent to create an EV training center to help retrain 46,000 current auto workers who will no longer manufacture combustion engines in the years to come.
More changes could take place as the legislature passes Whitmer’s economic proposals, known as the MI New Economy Plan, in which it seeks to expand the state’s skilled workforce and support the growth of high-level jobs. technology, including mobility and vehicle electrification.
“There is no doubt that the landscape remains competitive for auto and electric vehicle manufacturing projects – and Michigan is up to the challenge,” MEDC spokesperson Otie McKinley told Bridge.
Initiatives such as accelerating the construction of the state’s electric vehicle charging infrastructure will be part of it, McKinley said, as MEDC works with groups including state utilities to ” be competitive on a global level and accelerate our time to market ”.
Other signs of growth in electric vehicles are occurring in the state, state officials said on Wednesday:
- GM has set up its first fully dedicated electric vehicle assembly plant in Hamtramck, providing 2,200 jobs.
- Stellantis is building plug-in hybrid JEEP models at its new Detroit plant, employing more than 6,400 people.
- XL Fleet has opened its new Fleet Electrification Technology Center in Wixom for modernization of commercial electric vehicles, and Canadian automotive supplier Magna International is building a plant in St. Clair to supply battery boxes for GM’s new GMC Hummer EV.
Meanwhile, economist Austin, former Democratic leader of the State School Board and director of the Michigan Economic Center, disagreed with Thelen’s assertion that Ford’s out-of-state battery development is bad for Michigan.
Globally, the decision to deploy 11,000 employees at two US-based campuses signals Ford’s bet on growth by seizing the opportunities of electric vehicles. If successful, the company will remain an employment leader in Michigan.
“It’s really a good thing for the Michigan economy that these factories and these investments are made, even in Kentucky and Tennessee,” Austin said. “What that means is that Ford and the entire industry are increasing their production… and they’re bringing some of the production that was far across the world back to North America. “
Factories will source components “everywhere,” Austin said, including Michigan. And the development of electric vehicles will take place here, including in Corktown.
“As long as the ‘brains’ of the operation for Ford remain here, that is to say the head office, the engineering, the design, the marketing… it means that we are doing things with high added value”, Austin said.
“It increases the footprint of economic activity to the highest level here. “