Amid heightened political scrutiny and a strike by the United Auto Workers (UAW) union, Ford (F) said it will put on hold its $3.5 billion electric vehicle (EV) battery plant in Michigan.1
Ford spokesman T.R. Reid reportedly said the automaker had stopped work on the factory announced in February and would limit spending on it until confident about its ability to competitively operate the plant.23
The move comes as the Big Three Detroit automakers—Ford, General Motors (GM), and Stellantis (STLA)—face an ongoing strike by the UAW in which the transition to EVs has become a sticking point in negotiations. While the UAW has said it supports the EV transition broadly, the union also voiced concerns about job security and a “just transition that ensures auto workers have a place in the new economy.”45
Pausing work on the Michigan plant drew criticism from the UAW. “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,” said union president Shawn Fain in a statement.6
Politicians have also criticized Ford's partnership with China's Contemporary Amperex Technology Co. (CATL) and the plant's dependence on its technology, leading to calls to review the agreement.7
Ford shares were little changed in early trading Tuesday, ticking less than 0.1% lower as of 10:00 a.m. ET.
Originally published on Investopedia.com