Automaker Ford has announced it is “pausing” the construction of a controversial electric vehicle (EV) battery plant in Michigan.
The multi-billion dollar plant in Marshall has drawn scrutiny from U.S. lawmakers over the company’s partnership with Chinese Communist Party-linked battery-maker Contemporary Amperex Technology Co. Ltd., or CATL.
The decision to halt construction comes amid the ongoing strikes from the United Auto Workers (UAW) union.
“We’re pausing work, and we’re going to limit spending on construction at Marshall until we’re confident about our ability to competitively run the plant,” Ford spokesman T.R. Reid said in a statement.
“There are a number of considerations, all of which we’re evaluating in terms of our competitiveness.”
“We haven’t made a final decision about the investment there,” Reid added.
Reid also revealed that the pause on the $3.5 billion plant was effective immediately.
The statement did not mention the ongoing strikes from the UAW, however.
In response, the UAW issued a statement blasting Ford over the news.
“This is a shameful, barely-veiled threat by Ford to cut jobs,” UAW President Shawn Fain said in a statement.
“Closing 65 plants over the last 20 years wasn’t enough for the Big Three, now they want to threaten us with closing plants that aren’t even open yet.
“We are simply asking for a just transition to electric vehicles and Ford is instead doubling down on their race to the bottom.”
The Detroit News noted that when plans for the plant were announced earlier this year, Ford had hoped to be producing 2 million electric vehicles per year by 2026.
However, the company had to abandon those goals because the market demand has fallen far short of what the company anticipated.
The announcement came as the struggling auto brand lost billions of dollars last year under the leadership of CEO Jim Farley.
According to a report from The New York Times, the losses came in part because of bad investments and poor vehicle quality which has led to expensive recalls.
Republicans from the House Committee on Energy and Commerce sent a letter to Farley on September 1 requesting information on the company’s relationship with CATL.
The partnership, which was agreed in February, was met with pushback from some lawmakers who pointed to national security concerns.
“While Ford has labeled this project a ‘commitment to American manufacturing’ and asserts it will create 2,500 new American jobs, we are concerned that Ford’s partnership with a Chinese company could aid China’s efforts to expand its control over United States electric vehicle supply chains and jeopardize national security by furthering dependence on China,” the letter said.
Republicans referenced congressional testimony that said CATL could stop working on the project if tensions between the U.S. and China escalated.
Such a scenario would leave the vehicle maker in a bind over how to source batteries for its vehicles.
The lawmakers also questioned who would be employed at the plant currently under construction in Marshall.
“Additionally, Members learned at this hearing that Chinese companies often supply their own workers to projects in Latin America and Africa, reinforcing fears that CATL will import workers for this facility rather than creating jobs for United States workers,” the letter said.
House Republicans requested a copy of the licensing agreement between Ford and CATL.
They are also seeking communications from Ford discussing federal incentives for the project.
“We seek to learn more about whether this partnership and others like it will potentially exacerbate our reliance on China,” the Republicans said.
“Should China gain control of domestic electric vehicle production, the United States would be exposed to serious national security risks at a time of escalating geopolitical tensions.”