Ford battery plant in Michigan rose from the state’s failure in 2021

• Michigan lost two major EV developments in 2021, when Ford looked to the South for $11.4 billion in investment
• That prompted state leaders to be more competitive for big projects, which has resulted in over $10 billion in EV battery factories
• Industry experts say the efforts are important to retain Michigan’s automotive industry jobs and R&D here amid the switch to electrification

Michigan’s transformation into a new hub of electric vehicle battery manufacturing started with a loss in fall 2021, when Ford Motor Company turned away from its home state for its largest manufacturing investment to date.

That move — when Kentucky and Tennessee won a combined $11.4 billion in EV investment from Ford — prompted Michigan officials from both political parties to unite over a single goal: Land some of the massive investment generated by the automotive industry’s rapid switch to electrification.

What happened since, from bipartisan collaboration on a $1.8 billion incentive fund for large-scale investments to megasite land acquisition, preceded Monday’s announcement that Ford is choosing Michigan this time for a major battery development plant.

Related:

• Ford EV battery plant on Marshall Michigan megasite gets $1B in incentives
• Marshall megasite wins Ford EV battery plant project with Chinese partner
• Michigan wants to lead U.S. in electric vehicles. Ford turned elsewhere.
• Ford’s $2B investment in Michigan ‘solidifies’ state’s auto production

The Dearborn-based automaker made official on Monday its plans for a $3.5 billion investment on 950 acres in Marshall, near Battle Creek, for a new battery assembly factory that will help it to reduce costs of EVs. The state will provide just over $1 billion in incentives, including a $210 million grant and waiver of property taxes.

The news inspired relief across the state as economic developers celebrated the latest win for the state’s growing EV cluster. 

In Michigan, “the density of this industry is unparalleled in the world,” Glenn Stevens, executive director of MICHAuto, Michigan’s organization dedicated to the automotive industry, told Bridge Michigan on Monday. “And this makes it stronger.”

Adding battery capacity puts Michigan “on the forefront of a significant growth arc of the industry,” Stevens added.

The likelihood of the state retaining its automotive production and R&D is higher as automakers solidify their supply chains in Michigan, Stevens said. That will be important over the coming decade as production of gas-powered vehicles diminishes, notably as the state still has 12 non-EV assembly plants. 

The Ford factory, which is expected to open in 2026, will join several major EV and battery investments in Michigan since fall 2021. They include:

• General Motors battery plant in Delta Township, valued at $2.5 billion and expecting up to 1,700 workers when it opens in 2025. 
• GM retooling and expansion of its Lake Orion assembly plant, valued at $4 billion, to produce two EV pickups by 2024, employing about 2,350 new workers.
• Our Next Energy (ONE) battery factory in Van Buren Township, valued at $1.6 billion.
• Gotion battery factory valued at $2.36 billion facility near Big Rapids in Mecosta County, expected to create 2,350 jobs.
• LG Chem in the Holland area, spending up to $1.7 billion to expand its battery pack factory. 

Combined, those projects total $10.5 billion in investment, and received over $2 billion in state incentives.

The right fit, ready to go  

Ford approached state economic developers last year about the potential battery plant, said Josh Hundt, vice president and chief projects officer for the Michigan Economic Development Corporation. 

The megasite just west of Marshall had been identified for development decades ago, and shown as an option to many possible buyers for more than a decade. But by early 2022, as momentum increased to get sites “shovel ready,” that work, which includes land surveys and engineering studies for adding utilities, was already done. As a result, the land became viable for Ford, Hundt said.

Ford’s announcement seems to tell the state that it’s on the right track with site readiness. 

“We know that it’s important to have sites like this ready so that we’re … prepared for companies to consider them,” Hundt told Bridge. 

For the Marshall area, the promise of 2,500 new jobs from the factory is important, said Marshall Mayor Jim Schwartz during Ford’s announcement Monday in Romulus. The new Ford site will be located near the intersection of I-94 and I-69, just west of the city of about 7,000 people. 

“These jobs will bring opportunities,” Schwartz said. Pay for the positions will range from $20 to $50 per hour, Ford said. 

The city lost just under 1 percent of its population from 2019 to 2020, and about 40 percent have a bachelor’s degree or higher. The median household income was $63,468 in 2021.

Surrounding Calhoun County has also slowly lost population and, countywide, has a median household income of $10,000 less than Marshall.

Hundt said the potential to attract workers from the region attracted Ford. A manufacturing history around Battle Creek — such as at Kellogg’s — and training attuned to the skills needed in a battery plant at Kellogg Community College will make the workers ready for the Ford jobs, he said.  

Manufacturing represents about 14 percent of jobs in Michigan. Of the 603,000 manufacturing jobs in the state, just over 10 percent are in auto production.

Ford’s announced new plant,  to be called Blue Oval Battery Park Michigan, will be a wholly owned subsidiary of the automaker. The factory will be a partnership with Chinese battery giant Contemporary Amperex Technology Co. Ltd. (CATL). 

The future role of incentives 

The role of state incentives in attracting the EV investment concerns John C. Mozena, president of the Center for Economic Accountability, a Michigan-based nonprofit advocating for transparency in economic development. 

Mozenga was the only person speaking at Monday’s Michigan Strategic Fund board meeting, when about $1 billion in incentives were approved for the new Ford deal.

“Stop,” he said. “Stop throwing billions of dollars at a shrinking industry that has abused the generosity of Michigan’s taxpayers for decades.”

Mozenga mentioned a recent town hall discussion involving Ford CEO Jim Farley, who said the company employs 25 percent more engineers than needed. The company reportedly expects to slash $2.5 billion in spending this year and job cuts are expected to be a part of that.

“Yet we’re sitting here talking about subsidizing job creation,” Mozenga said Monday. 

But Hundt, of the MEDC, said Ford is an iconic part of American and Michigan history. Supporting its EV expansion will have impact across the state because of what he called a “generational opportunity” to gain a foothold in the emerging EV supply chain.

The collaboration at all levels of government and economic development to prioritize similar projects flipped the script from where the state stood when it was shocked by Ford’s 2021 announcement. 

Michigan’s attraction efforts now, he said, “are surpassing what other states are doing.”