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Stung by EV losses, Ford plans smaller Michigan factory with fewer jobs

aerial view of green area
Land development started over the summer in Marshall, where 1,900 acres of former farm fields are being turned into heavy industrial space for an EV battery factory and related businesses. (Bridge photo by David Ruck)
  • Ford Motor Co. is evaluating its EV investments as it falls behind in profit goals
  • After putting the BlueOval battery factory in Marshall on hold two months ago, the automaker said Tuesday it will proceed 
  • But the factory will be smaller and employ about two-thirds as many people as originally planned

Michigan’s rush to add electric vehicle production jobs hit a bump on Tuesday. 

Even as Ford Motor Co. recommitted to building a multi-billion dollar battery factory in Marshall, it announced that the new plant would have 800 fewer jobs than initially projected and would produce fewer batteries — an estimated 40 percent cut to capacity. 

The overall investment by Ford is likely to shrink by $1 billion or more, based on the capacity cuts.

Still, Michigan officials, including Gov. Gretchen Whitmer, expressed confidence about the 1,700 jobs now planned for the to-be-smaller battery factory.

“(Ford’s) project is an important one,” Whitmer said Tuesday as she spoke to reporters after a bill signing event in Livonia. “We're all invested in making sure that Michigan on-shores battery operation, that we learn how to build batteries and ultimately shorten these critical supply chains.”


First announced in February, the Marshall battery factory — planned as Ford’s first to use less-expensive LFP technology — represented a $3.5 billion investment from the automaker, about $2 billion in a state incentive package and 2,500 new jobs in the small community east of Battle Creek.


The first sign of trouble came in September when the Dearborn-based automaker put the project on hold after falling $1.6 billion behind its profit target, largely due to losses in its electric vehicle division as sales lagged behind the pace of production. The announcement also came a week after the United Auto Workers launched a six-week strike against the Big Three.

At the time, Ford announced a company-wide EV slowdown that, until Tuesday, raised questions about the future of the planned Marshall facility. 

Now, in a statement Tuesday, the automaker said it is “re-timing and re-sizing some investments” but “remains bullish” on its long-term strategy for electric vehicles. 

The Marshall plant will now be capable of producing 20 gigawatts of power that will allow the automaker to make an estimated 200,000 battery packs per year, down 43 percent from original plans. 

Specifics on the land deal for the Marshall property — once planned for 950 acres of a new state megasite, with a conservation easement on the Kalamazoo River — remain undisclosed, though a smaller footprint is certain.

Michigan’s stake in the Marshall deal totals $2.2 billion in incentives, including a local tax break worth about $700 million for land preparation and a $200,000 job-creation grant that would go directly to Ford once it hires at the facility, according to documents from the Michigan Economic Development Corp. (MEDC). 

Whitmer said she is open to reevaluating the state's commitment to the project in light of recent downsizing, noting she "won't get ahead of MEDC" as the department responds to the announcement.

"As Ford has had to make some changes, … the state's role will change as well," Whitmer said. "When one aspect gets resized, so does the other."

Ford’s disappointing third quarter came in part due to production declines, the UAW strike, slower-than-projected sales and ongoing investor concerns with the company. Ford [NYSE: F] is valued at about $41 billion, number three in the state among public companies. The company’s current value is 18.4 percent less than it was at the beginning of the year at a time when other companies have seen gains. The S&P 500 benchmark grew by 18 percent since January. 

Ford is not the only automaker adjusting its EV investments. 

Since the Marshall project was put on hold in September: 

  • General Motors announced that it will delay the conversion of its Lake Orion assembly plant to produce EV pickups. The company now plans to open in late 2025 instead of next year.
  • GM, which plans to make a corporate announcement on Tuesday morning, also delayed opening its Ultium Cells battery plant in Spring Hill, Tennessee, until 2024. However, the company assured Michigan that its Ultium factory near Lansing is on track. 
  • LG Energy Solution’s $1.7 billion EV battery factory expansion in Holland, which was expected to create 1,000 jobs, instead resulted in 170 worker layoffs this month, the Holland Sentinel reported. The company said production line changes resulted in the staff cuts, as did “automakers realigning the speed of the EV transition."
  • Other national and international battery factory development has slowed, including the second phase of Ford’s BlueOval SK in Hardin County, Kentucky and a Volkswagen factory that had been planned to be located in Europe.

Local reaction to Ford’s news on Tuesday ranged from economic development officials who said they were “thrilled” that the stalled project is back on, to concern from community-based opponents to the plan. A group of opponents is engaged in a court battle with the city of Marshall to try to force a public vote on the megasite rezoning. 

A statement from that group, the Committee for Marshall -— Not the Megasite, said that construction on the site raises “uncertainty for the community due to an ever-changing consumer marketplace (and) the significant reduction in size of the plant.”

Questions from Bridge to Ford, Marshall and the Marshall Area Economic Development Alliance (MAEDA) about the expected size of the development in Ford’s new configuration went unanswered Tuesday. The factory site will be a portion of the approximately 1,900 acres that MAEDA is using for the megasite it now calls the Marshall Area Jobs, Opportunity and Recreation (MAJOR) campus.

The state is funding land acquisition and site development on the property for Ford and to attract related businesses. In September, the Michigan Strategic Fund awarded $65 million to MAEDA for more work, bringing the state’s spending on property and infrastructure like roads and water lines to over $800 million.

With Ford’s downsized plan in Marshall, Michigan Republicans reignited criticism of Ford’s alliance with a Chinese-based battery maker, though the Marshall factory will be operated as a wholly owned subsidiary of Ford.

Joseph Cella, former U.S. ambassador to Fiji, said Ford’s plan to license battery technology from China-based Contemporary Amperex Technology Co. (CATL) could expose the U.S. to national security risks due to the nations’ uneasy relationship.

“Ford has zero ability to protect our sensitive and nearby task critical military assets from (Chinese) nationals who would be present at the proposed plant, “ Cella said. 

Michigan’s economic development policy — which Democrats are proposing to change — also took hits on Tuesday. 

“It is negligent to disrupt the lives of so many in the Marshall community without assurances that the project partner would follow through with their commitments,” said state Sen. Thomas Albert, R-Lowell. “That is a shocking display of poor planning and lack of due diligence from the state.”

Tim Bartik, senior economist at the W. E. Upjohn Institute for Employment Research in Kalamazoo, studied the impact of state incentives on the Ford Marshall project as originally proposed in a paper published on Friday. 

About 80 percent of the jobs at Ford’s EV factory 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. 

Bartik’s initial findings — which he told Bridge will be updated as new Ford project details are disclosed — suggested that the project brought positive net benefits for the incentive investment. 


“This was surprising to me given the high incentives for jobs,” Bartik said. 

Tipping the scale in the original plan in part were the number of jobs in moderately distressed Calhoun County. 

The MEDC awaits details from Ford on the downsizing of the battery factory, but spokesperson Otie McKinley said the number of jobs remains sizable for Michigan.

“While it is a reduction of 700 jobs from the original 1,700 jobs, it is a pretty incredible amount for an area like Marshall,” McKinley said. 

Lauren Gibbons contributed to this report.

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