Home » Ford’s Curious Decision To Hit Pause On A $3.5 Billion Battery Plant

Ford’s Curious Decision To Hit Pause On A $3.5 Billion Battery Plant

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On today’s morning news roundup, we’ll be talking a lot about Ford. This is rather unintentional, I assure you. But besides being one of the more interesting car companies to me at the moment—I think it’s trying hard to evolve what it does despite a lot of headwinds and investors losing their minds at the actual costs of making major business investments. One such investment just became extremely controversial in Ford’s home state, and it’s a headache the automaker really doesn’t need right now.

Also on tap for today: President Biden and former President Trump head to the United Auto Workers’ picket line; why Ford has managed this labor dispute a little better than others (until today, maybe); and also, why the Mustang Mach-E has not been a hit in China. Lots to cover today so let’s hit it.

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UAW Slams Ford’s Decision To ‘Pause’ Marshall Battery Plant

Ford Blueovalsk Battery Plant 001
Photo: Ford

Ford has big plans for battery plants in the United States. It’s getting a $9.2 billion loan from the U.S. government to build three factories here—two in Kentucky and one in Tennessee—with South Korean partner SK Innovation in order to catch up to Tesla and the Chinese automakers. Meanwhile, it’s already building another plant in Marshall, Michigan, somewhat ironically with China’s CATL as a technical partner. That plant is due to make cheaper lithium iron phosphate (LFP) batteries, which it will also need in addition to the higher-grade stuff.

But that plant has been remarkably controversial. It was supposed to be in Virginia until that state’s governor nixed the plan over concerns about China’s involvement. So it moved to Michigan instead, but the China controversy has remained, just with different local politicians (specifically Republicans, who are extremely wary of China anything these days.)

And now, work on that Michigan factory has stopped entirely. Here’s The Detroit News, which broke this story:

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“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 told The Detroit News on Monday. A “number of considerations” were at play in the company’s business decision, he said, but wouldn’t say whether the United Auto Workers’ ongoing strike of Ford and its crosstown rivals was a factor.

“We haven’t made a final decision about the investment there,” Reid said of the Marshall site. The pause in construction is effective Monday.

The timing of this move is extremely odd, to say the least. First, it is entirely possible Ford did this as some kind of bargaining tactic with the UAW—joint-venture battery plants are generally not unionized and provide lower wages than UAW-affiliated auto plants. While I’m not aware of that being a specific point in the current negotiations, it is one of the UAW’s broader concerns. Here’s the Associated Press quoting a local pol:

Republican State Rep. Sarah Lightner, whose district includes Marshall, said Monday the news from Ford “came out of the blue.”

“We’re still gathering information because there’s a lot of moving parts,” Lightner said.

While the state had allocated nearly $1.7 billion in incentives for the project, not all of the money has been sent out and there are clawbacks in place, added Lightner, who is the minority vice chair of the House Appropriations committee.

“Obviously, the strikes could probably have something to do with it,” Lightner said.

Naturally, the UAW wasn’t happy about this move. The undertone being, “Do what we’re asking, or this battery plant gets it.”

In a statement, UAW President Shawn Fain called Ford’s move “a shameful, barely-veiled threat by Ford to cut jobs” at a plant that’s not 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” with lower wages, he said.

But then Sam Abuelsamid, an analyst with Guidehouse Insights whose work I regard pretty highly, told the AP he’s not so sure it’s a labor matter:

[…] Ford’s decision might be related to the strike, but more likely reflects opposition to the plant among people in a conservative rural area of southern Michigan.

“They don’t want the factory, they don’t want the traffic, and they don’t want anything associated with a Chinese company,” he said.

Abuelsamid said he was surprised that Ford didn’t select a site closer to Detroit, which he thinks would be less hostile to the idea of a battery plant using a Chinese company’s intellectual property.

And the Ford-CATL plant has been very controversial in Marshall, as it was in Virginia. Politico says the plan has been hit with environmental concerns, a lawsuit from residents and a probe from Republicans in Congress over the China connection. In fact:

Michigan GOP Rep. Lisa McClain wrote in a post on X, formerly known as Twitter, that the pause was “GREAT news for Michigan and a serious blow” to the Chinese Communist Party.

“Chinese technology has no place in our country and I am glad to see this battery plant be put on hold,” McClain wrote.

The plant has also been used by various Republicans to hit Democratic Michigan Gov. Gretchen Whitmer, who has touted the factory as a win for jobs. But the whole battery plant program has drawn heat from the UAW as well; the union opposed the giant loan Ford got because the three new battery plants will be in tougher-on-labor states and not covered by any UAW contracts.

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It’s a mess, all around, but I’m still not sure exactly why Ford made this call—especially right now. More on this as we get it.

Biden, Trump Head To The Picket Lines

Screen Shot 2023 08 28 At 8.34.00 Am
Photo: UAW

Meanwhile, as the UAW’s strike enters its 11th day, both Biden and Trump are headed to Michigan to speak to workers in what will surely be a thoughtful, cohesive, mutually respectful discussion of the complexities of labor issues, economic mobility and the rapidly changing automotive industry.

I kid, of course. It will be a week full of weird old-man rambling, probably.

While we all collectively have little appetite for politics here, unfortunately, politics are coming to the auto industry we cover, as they often do. The UAW strike is happening during a presidential election cycle and it has direct and indirect ties to Biden’s aggressive EV push and fuel-economy mandates.

Biden has claimed he’s “the most pro-union, pro-worker president ever,” and he’s been pushed by various people—including Michigan Democrats—to visit the picket line. But the UAW hasn’t offered an endorsement yet; as you just read, they’re not happy with the nonexistent union presence in these battery plants. He has a tough line to walk here between the environment and labor, and I’m not sure he can do both.

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Trump, for his part, has seized on this as a chance to hit Biden over things like inflation, unaffordable costs of living, the questionable economics of the shift to EVs and more, as have the other GOP candidates.

The visits from Biden and Trump, in that order, are back-to-back today and Wednesday in Michigan, and for this, Trump will sit out Wednesday night’s GOP presidential debate.

But I like how The Detroit News led its story—by talking to the actual workers, who feel like they keep getting let down by both parties and our entire government, just as many people feel these days:

Bianca Garland, a UAW Local 140 member who works at Stellantis NV’s Warren Truck Assembly Plant, put it bluntly: “It doesn’t matter,” she said, speaking from a picket line at a Mopar parts distribution center in Center Line where workers went on strike Friday along UAW members at 37 other Stellantis and General Motors Co. parts depots across the country. “The only purpose would be the economy — their own benefit. … That’s all it’s about.”

Jacquelyn Cargile, who also works at Warren Truck, expressed similar disinterest in the high-profile visits. It seems to her that politicians should have been more involved in trying to find a solution before the strike started.

“For what, though?” she said. “What they gonna say that’s gonna change anything?”

For workers like Garland and Cargile, they’re more concerned about the reality they’re living: paychecks that don’t stretch as far as they used to, and worry about the security of their jobs.

Meanwhile, after Republican presidential candidate Sen. Tim Scott of South Carolina said he’d just fire the striking auto workers like Ronald Reagan did during the federal air traffic controller strikes, the UAW reported him to the National Labor Relations Board. This is all hilarious.

And I don’t think that Shawn Fain’s UAW is just gonna toss Biden an endorsement as a prize for showing up. Not this time.

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Is Ford Doing Better In The UAW Negotiations?

2024 Ford F-150 Stx 01
Photo: Ford

Despite the battery plant weirdness out of Michigan today, generally, I’d say yes. Ford seems to be the most labor-friendly automaker bargaining with the UAW, then General Motors, and then Stellantis as the detached, European outlier with less to lose and a CEO who loves cost-cutting the way the rest of love our families and pets.

Here’s Al Root at Barron’s with some numbers on why Ford is pulling this off:

Ford is on a labor roll. The United Auto Workers didn’t expand its strike against the company Friday, citing progress made. The union opted to strike at more General Motors and Stellantis STLA facilities. Canadian auto workers represented by Unifor ratified a new labor agreement with Ford on Sunday. No strike was needed.

“Historically Ford has had the best relationship with the UAW and has probably done a better job communicating with the union,” says Benchmark analyst Mike Ward. “Eventually, the agreements end up similar but Ford has the most US employees so it makes sense for it to try to set the agreement aligned with its needs.”

His people-point is interesting. Ford has about 173,000 employees worldwide, about 86,000 in the U.S. Of the 86,000, about 57,000 are represented by the UAW. About 33% of Ford employees are UAW.

That number for GM is about 28%. It has about 167,000 employees worldwide, about 92,000 in the U.S., and about 46,000 U.S. workers represented by unions. The vast majority of the unionized employees are represented by the UAW.

Stellantis has about 300,000 employees globally. About 95,000 are in North America and of those about 41,000 are represented by the UAW. Only about 14% of Stellantis workers are represented by the UAW.

Context, as always, is important. And Root smartly notes Ford hasn’t always had a good relationship with labor; far from it. Henry Ford’s approach to labor was to send private security goons into literal street fights with his workers. There’s also the influence of the Ford family, of which there’s no real equivalent at GM or Stellantis (maybe the Agnelli family at the latter, but that feels less relevant here.) And then there’s how the CEO approaches things:

Ford CEO Jim Farley appears to see things differently than Henry Ford or his current CEO peers. GM CEO Mary Barra and Stellantis CEO Carlos Taveres value labor relations too, but Farley speaks a little differently. He doesn’t typically mix the needs of the corporation in when he’s talking about the needs of employees.

“Ford stands apart from all the other automakers and most other major industrial companies,” said CEO Jim Farley on the company’s second-quarter earnings conference call in July. “‘We believe, as [UAW leadership does], that Ford should do our part to support the middle class, create vibrant communities, and build a strong American and industrial base.”

Either way, Ford isn’t seeing advancements on its strikes—for now, anyway. My guess is Ford will get a contract first and that will set the tone for the rest of these negotiations.

The Mustang Mach-E’s China Problem

Mach E Premium Cropped
Photo: Ford

Finally, let’s talk about the Mustang Mach-E. I was as skeptical as anyone when this thing was announced—a “Mustang-themed electric crossover” seemed like about the worst idea I’d ever heard. But driving the final product won me over. I get all the criticisms it gets, but I’m generally a fan nonetheless. Also, rally variants? Who would say no to that?

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Evidently, the Chinese. The Wall Street Journal reports today that the Mach-E has become the poster boy for the American automakers’ struggles in China:

Ford’s market share in China was 2% last year, with sales down 61% from 2016 on a wholesale basis.

People familiar with Ford’s China business point to flawed marketing and sales strategies, such as not giving the Mach-E a Chinese name and underestimating how crowded the EV market would become. They also point to execution problems, including Ford’s slowness in introducing direct-sales stores. The Mach-E also didn’t have the best features among rival cars in a similar price range.

“Their EV strategy for China was the Mach-E. When that didn’t work out, they didn’t have anything,” said Tu Le, founder of consulting firm Sino Auto Insights.

As in America, the Mach-E was positioned in China as a competitor to cars from Tesla, which broke into China first and kicked the domestic market into high gear. It went on sale in 2021, right in time to face intense local competition from cheaper, more advanced Chinese EVs with better range and easier production thanks to local supply chains. Now, Ford is more focused on EV exports and commercial vehicles in China.

Basically, the lesson for the Western and other Asian automakers is they can’t just show up in China and expect to be successful anymore:

After losing market share to local competitors, Western carmakers are pivoting. Volkswagen, the biggest foreign carmaker in China, is planning billions of dollars of investments to build a new research and procurement center for EVs and to join with local companies. General Motors, with its joint-venture partner SAIC Motor, has a goal to launch 15 EV models in the country based on a new platform by the end of 2025.

Some brands have retreated—Stellantis’ Jeep ended its manufacturing operation in China after sales dwindled and it moved to imports only.

In May, Farley said Ford is staying in China, even if it won’t serve everyone.

A cautionary tale that the automakers learned way too late.

Your Turn

What’s really happening here with Ford’s Marshall plant? And is Ford at least trying to make the right moves to meet the moment, or am I giving Dearborn too much credit?

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Mr Sarcastic
Mr Sarcastic
4 months ago

Ford does want peace with the UAW BUT not peace at any cost. The UAW destroyed the American Car Manufacturing industry in the 70s when mgmt just bent over took what the UAW was doing and sold shitier cars for a higher price. Then Asia great cars great build great prices and all of a sudden American buyers realized why is it patriotic to buy crap from the union mob? See the union got too big for its britches. Sure recently mgmt bribed UAW leaders but in the 70s union leaders were hooked up with the mob. They started the war.we still don’t know where they buried that one union guy. But yeah it was LA Costra Nostra. Mobbed up. Now Ford and the rest are willing to spread the wealth they are not willing to bend over to Fain whe seriously just wants to go back to the mob days. Trust me he will get caught hooked up or being bribed soon. But the big 3 knows you can’t sell out the industry or the non union manufacturers will shut the big 3 down. Look at stories here they can’t launch, build, maintain anything as well as the non union manufacturers and if you think increasing the price of already overpriced cars by 40% will increase or keep sales you are nuts. Me I will buy a well built Toyota or Honda for half of what it costs to buy a crappy built Ford or Chevy.

Ben
Ben
4 months ago

Wow, unusual number of really bad takes in the comments today. People, just because we’re celebrating 200000 comments it doesn’t mean you have to comment. If you don’t know what you’re talking about it’s okay to just put down the keyboard. 😉

Jb996
Jb996
4 months ago

“weird old-man rambling”
I’ve never heard our political system described so succinctly.

Boulevard_Yachtsman
Boulevard_Yachtsman
4 months ago

They’re just…
Figuring Out Recent Developments
with
China And The Locals

Chronometric
Chronometric
4 months ago

Ford partnered with CATL because the Chinese have the battery technology and raw materials and we don’t. Any IP transfer is likely from CATL to Ford. I am surprised the Chinese would allow this joint venture.

V10omous
V10omous
4 months ago
Reply to  Chronometric

The fact that they are allowing it should tell you something.

Ilikecarsandbikes
Ilikecarsandbikes
4 months ago
Reply to  Chronometric

they also have some exciting technology breakthroughs they are signaling in the near future which if they hit their promises brings charging down to 15 minutes (advertised as 4C charging meaning four time battery capacity) and improved cold weather performance

Chris Jackson
Chris Jackson
4 months ago

If true, that’s amazing, and will probably be the game changer we need to make electric vehicles viable for the majority. I’ve been saying for a couple years now that we need one more significant development in battery tech to make electric cars make sense to the average person. 15 minute charging and improved cold weather performance could be the thing!

Ilikecarsandbikes
Ilikecarsandbikes
4 months ago
Reply to  Chris Jackson

fingers crossed because I am also not holding my breath until it is in production

Data
Data
4 months ago

“Republican State Rep. Sarah Lightner, whose district includes Marshall, said Monday the news from Ford “came out of the blue.””

So what she’s saying is this is the Democrats fault…

Baron Usurper
Baron Usurper
4 months ago

Chinese technology has no place in our country”
Okay, how do you feel about ketchup?

Col Lingus
Col Lingus
4 months ago

Strictly a negotiation tactic. RE: Ford, “you fuckers want to squeeze our balls on something we don’t even got a handle on yet?” “Bite me, no soup for you.”

As to the visit of the walking fossils to Michigan? WTF?
Why can’t we have someone else to vote for? This choice is like gambling on a 5 day old gas station egg salad sandwich, or buying something off the food truck from the crazy old bastard who get pissed off when you ask for a napkin. We are truly fucked..

Jack Beckman
Jack Beckman
4 months ago
Reply to  Col Lingus

Well, we could have someone else to vote for it people would go out to the primaries and vote. But they don’t – only the most rabid on the right and left seem to, so we get candidates that the general population of voters don’t like.

ElmerTheAmish
ElmerTheAmish
4 months ago
Reply to  Jack Beckman

Even if people vote in the primaries, so much gerrymandering has happened all over the country, the various candidates just try to “out [political] party” everyone else running, which moves the candidates farther to the fringes. Then, all we get are the fringes to vote on.

While this is a quick rant that isn’t obviously 100% true, it’s true enough that we get the mess the US House is in right now…

Col Lingus
Col Lingus
4 months ago
Reply to  ElmerTheAmish

Exactly. My state is currently in a death match with the US Supreme Court of Jesters over bullshit voting districts. And any other kind of shit we can find to be assholes about.

Last edited 4 months ago by Col Lingus
ElmerTheAmish
ElmerTheAmish
4 months ago
Reply to  Col Lingus

My state basically gave up and is moving forward with illegal districts right now until… well I’m not sure anyone knows what to really do from here. The citizens asked the politicians to not gerrymander, the politicians ignored it. The last semblance of the state Supreme Court told the politicians not to gerrymander, the politicians waited it out until they could get a more “understanding” court to let them have their way. Such is life, I suppose.

Jb996
Jb996
4 months ago
Reply to  Jack Beckman

Unfortunately most state political parties require people to be registered to that party to vote in the primary. So, Primaries aren’t about a center candidate, they are an echo chamber for the left and right wings.
So voters in the middle only get to vote in the November election, between two fringe crazies, who were selected by the extremes of their party.

Primaries should be opened up to all voters. That would incentivize very interesting centrist candidates from both parties.

EDIT. Some states have open primaries, but something like 37 states are closed primaries.

Last edited 4 months ago by Jb996
Col Lingus
Col Lingus
4 months ago
Reply to  Jb996

And just one more reason why we are so screwed.

Jack Beckman
Jack Beckman
4 months ago
Reply to  Jb996

Conversely, there should be no primaries. When only the party faithful – the ones who pay dues and volunteer – were running the show, before primaries, the candidates tended to be picked for electability among other things. Now with the radicals on both sides showing for the primaries, you get ideologues who aren’t electable (or horrible choices like we are seeing now).

There are exceptions, of course, and sometimes a party would put up someone with little chance, but usually after getting smacked down, the party would correct. Not so with the people voting now.

So either get more people to the polls (and open them to all in all states) or get rid of them entirely. After all, why are we paying for party primaries?

Iwannadrive637
Iwannadrive637
4 months ago
Reply to  Jb996

Thank you. In my state if you vote in a primary then you’re automatically a registered Democrat or Republican and can’t vote in the other primary. In almost every election I wind up voting for whoever will do the least amount of damage.

Steve P
Steve P
4 months ago
Reply to  Jb996

Ranked Choice, baby!

Mike B
Mike B
4 months ago

Tim Scott saying the quiet part out loud. They all feel that way, but he’s just tone-deaf enough to actually say it in public.

Just like the Australian who called for 40-50% unemployment to get workers back in their place.

Studdley
Studdley
4 months ago

Riddle me this: how does one secure a loan to the tune of 9.4 BILLION dollars and they don’t even know where they are going to build it? Can you imagine going into a bank to get a loan to start a restaurant and you didn’t know where you were even going to build it?

Mantis Toboggan, MD
Mantis Toboggan, MD
4 months ago
Reply to  Studdley

Ford is big and successful enough that it negotiates with lenders on an equal or near-equal footing. If it wanted to it could probably fund the plant itself but would prefer not to because doing so would restrict cash flow or involve the sale of other assets. So it asks for a loan and even without a site the lenders trust that Ford knows what it’s doing and even if it doesn’t it will pay them back anyway. It’s not really an analogous position to small businesses, let alone us regular consumers.

Citrus
Citrus
4 months ago

Given the sheer amount of excess inventory – an anomaly in a still overheated car market – I expect that the incentive to restart production also isn’t there for Stellantis.

Alexk98
Alexk98
4 months ago

I suspect Ford is both using the Battery plants as a UAW bargaining chip, but also reacting to recent regulation weakening from European countries. While their US and European divisions seems to be fairly isolated, their recent massive losses from EVs combined with a decreased speed of EV mandates would suggest they have much less incentive to throw their free capital at a plant that will not make serious profit for years. Also, I would wager that throttling the plant until the UAW deal is done will seriously help with EoY financial hits that will be caused due to inventory shortages caused by strikes.

Parsko
Parsko
4 months ago
Reply to  Alexk98

I like this take and agree with it.

Greg
Greg
4 months ago

China is loosing its hat right now in a lot of sectors and projects, no one wants these batteries and usa and china trade is worse than ever and it wont reverse anytime soon.

plus ford doesnt want this either, it was to convince chinese to give them a market and help out there, now that china isnt hot anymore they have no reason to build in michigan.

it will collapse and be repurposed to another project.

Stealthwang
Stealthwang
4 months ago
Reply to  Greg

lmao @ china auto market isn’t hot anymore

Greg
Greg
4 months ago
Reply to  Stealthwang

not for non chinese companies. you must not pay attention to the last couple years.

Last edited 4 months ago by Greg
Stealthwang
Stealthwang
4 months ago
Reply to  Greg

non-chinese companies having their lunch eaten isn’t the same thing as a cold market. you must not pay attention 🙂

Greg
Greg
4 months ago
Reply to  Stealthwang

It is when we are discussing US companies like Ford? So I stand by saying that the market is not hot for them. Nor any other US company. Sure, its great if you are a Chinese company.

GM lost 35% of their market since 2015. Ford and them are pulling back from investing as are thousands of other companies in the last few years from all over manufacturing. Because the market isn’t worth being in for them, at least not how it currently is going and the winds are blowing.

Last edited 4 months ago by Greg
Dogisbadob
Dogisbadob
4 months ago

The UAW should ask for seats on the board, like the works councils they have in Germany. Ford has a huge business in Germany/Europe.

The CATL closure probably really is more about China than the UAW, especially since they already had another site rejected, as you mention. Now Ford just has to find the most China-friendly state to build it in, if they insist on a joint venture with CATL or any other Chinese company.

Hopefully a Japanese company like Panasonic could step in, or even someone from Taiwan.

Parsko
Parsko
4 months ago
Reply to  Dogisbadob

Absolutely this. I once worked at ASML, and they had a VERY strong seat on the Works Council that could veto anything. That was the last time I ever got profit share or a bonus.

Thevenin
Thevenin
4 months ago

I cannot fault Virginia or Michigan for being hesitant to allow CATL a foothold. Not only do Chinese corporations have a sordid history of IP theft and corporate espionage (which the Department of Commerce describes as “widespread”), but we know now that China’s infrastructure investments always come with strings attached (particularly, though not exclusively, from the Belt and Road Initiative).

As to what’s Ford’s game in all this, I think Ford’s just trying to use the situation to maneuver the UAW and Michigan into conflict with each other.

R Rr
R Rr
4 months ago
Reply to  Thevenin

All I can say at this right-wing fearmongering is LOL

This is the one instance (and the only one, as far as I know) where the western company (Ford here) would actually be using the Chinese IP and NOT the other way around.

“CATL’s foothold” is just Ford paying them to use their battery tech.

V10omous
V10omous
4 months ago
Reply to  R Rr

Would you have allowed a Soviet joint aerospace venture on US soil when they were ahead of us in the space race?

Brian Ash
Brian Ash
4 months ago
Reply to  V10omous

This is a great analogy/example!

Steve P
Steve P
4 months ago
Reply to  V10omous

We were using the CIA to learn about/steal their tech.

R Rr
R Rr
4 months ago
Reply to  V10omous

Oh, so you’re not aware of Ford’s JV with Changan in China, with Changan being the majority owner?

I thought it was common knowledge (especially on this site) that all western car OEMs (except Tesla) had to “partner” with a Chinese co (who’s always the majority owner) to manufacture in China. All those JV’s purpose was IP theft. I assume you’re not worried about any of that, since it’s been going on for decades at this point.

THIS Michigan battery plant using CATL’s tech is the exact opposite of that^^

Again, I was sure the difference was pretty obvious for readers of this particular site. Oh, well, I assumed.. 🙂

Last edited 4 months ago by R Rr
V10omous
V10omous
4 months ago
Reply to  R Rr

Nice dodge of my question.

Also, nice assumption that a) I didn’t know about joint ventures in China and b) I’m in favor of them.

If it were up to me, every American company would pull all manufacturing from China tomorrow.

R Rr
R Rr
4 months ago
Reply to  V10omous

To answer your question: YES, if the US side was the actual owner of the JV and the Soviet side was basically selling their tech to us.

And you’re getting your wish, since the chinese have already gotten all the IP they needed from their western “partners” and have started a robust domestic car industry based on it, and as a result the westerners are forced to pull out, abandon or scale down their chinese operations because they’re losing that market to the domestic manufacturers.

Again, this Ford battery plant is Ford using CATL tech. CATL is a battery maker, not a car maker, and its battery tech is ahead of western battery tech, which is why Ford is buying it. It’s still fearmongering from uninformed FoxNews viewers.

Wuffles Cookie
Wuffles Cookie
4 months ago
Reply to  R Rr

All I can say at this right-wing fearmongering is LOL

Found the commentor who has never done business with a Chinese company.

There are entire departments at fortune 500 companies who’s sole job is to limit IP theft from Chinese companies. The last time we had to let a Chinese corporate vendor on site at my company we found 4 unlabeled USB drives that ended up containing malware- they now have full time security escorts every second they are on property.

You say this will be Ford using CATL IP. I say, from personal experience, that the second any Ford employee sets foot on that site with a company laptop, it’s a data breach.

It’s not “right wing fearmongering”, it’s simply the fact of dealing with state-sponsored industrial espionage. Willful ignorance does not change reality.

CPL Rabbit
CPL Rabbit
4 months ago
Reply to  R Rr

The one thing that Right and Left can [publicly] agree on is that China is a problem in several ways.

Col Lingus
Col Lingus
4 months ago
Reply to  R Rr

what color is the sky in your world?

Thevenin
Thevenin
4 months ago
Reply to  R Rr

This particular mongering of fears is just as valid from a left-wing perspective. China is technically communist in the way Bud Light is technically beer. It’s just capitalism, but with even fewer workers rights, and also (almost) all the corporations belong to a literal imperialist dictator. No one in their right mind encourages the expansion of an exploitative system like that, let alone welcomes one to buy up land or build critical infrastructure.

Taco Shackleford
Taco Shackleford
4 months ago

People need to stop being scared of partnering with Chinese companies, I know they are a convenient bug-a-boo, but just stop. The Chinese gov is focused on planning and supporting industry with a general 10-20 year outlook in regards to all legislation and financial planning. Meanwhile in the US we have a 2-4 year outlook which is always subject to be reversed, or accelerated depending on which party wins every 2 years. By working with the Chinese companies we can bring innovation and manufacturing to the US that is far ahead of our abilities in the renewable energy space. We could have been ahead of the Chinese if we started long term planning 20 years ago, but everything in politics in the US is extremely short term, while China is long term. Because we are behind the only way to catch up, and hopefully exceed China is to work with them now and get jobs in America.

Pupmeow
Pupmeow
4 months ago

Do you want to talk about IP theft? National security?

Taco Shackleford
Taco Shackleford
4 months ago
Reply to  Pupmeow

Yes there is stuff to be weary of like IP theft when working with any international corporation, however in the case of Chinese companies that owned and designed the IP, partnering with US companies to produce in the US this is likely an overstated risk. China has the battery IP and capabilities, and the US does not. If we can use their IP, with better manufacturing techniques it should be a win to everyone. Bringing Chinese companies into the US is a reverse of the offshoring affect that sent US IP into china to be easily stolen, now it can be reversed.

DONALD FOLEY
DONALD FOLEY
4 months ago

..to be wary of…

David Smith
David Smith
4 months ago
Reply to  DONALD FOLEY

I’m a little tired of it so it could work as posted.

Pupmeow
Pupmeow
4 months ago

I don’t necessarily disagree with this comment. But your first was a broader and, imo, flippant assessment. The face is, when you do business with a “Chinese company,” you’re doing business with the Chinese Communist Party. I am not saying we should pull out of China, or avoid business with China altogether (not possible at the moment, anyway). But this is an authoritarian government that arrests, kidnaps, and executes its own people and engages in slave labor and may represent a national security threat with certain technologies. We should not gloss over that.

Brian Ash
Brian Ash
4 months ago

Except no one knows if their long term strategy is to take over the world…..

Taco Shackleford
Taco Shackleford
4 months ago
Reply to  Brian Ash

Allowing the Chinese to partner with Ford on a battery plant will not help them “take over the world”, nor will getting data from TikTok.

Brian Ash
Brian Ash
4 months ago

Your living under a rock and miss the point. What they have been doing in Africa, South America, Middle East… the past 15 years ago is not for anyones benefit but THEIR’S. No one knows what their true intentions or long term strategy is but them. Partnering is fine but to say it’s a rosey good natured relationship to benefit us or mutual is extremely ignorant.

Taco Shackleford
Taco Shackleford
4 months ago
Reply to  Brian Ash

No one knows what their true intentions or long term strategy is but them.

Yet people utter the word China and everyone runs in fear. Stand up and grow a pair America. China is no more dangerous to us than any other country, and they can be brought to a state where they have more benefit in partnering with us then fighting against us. Jobs are returning to the US, and not being shipped to China for the first time in 30 years and the general response is ” we don’t know what China will do, OMG Boogeyman.”

Brian Ash
Brian Ash
4 months ago

Understood they are no more of a threat than NK, Iran, Russia, MBS, etc.

There are no saints in the Global economy from a corporate or govt standpoint. You paint it as if China is mother Teresa spreading goodwill and charity to the world with no ill intentions and mutually equal benefits. Seriously?!?!?

Taco Shackleford
Taco Shackleford
4 months ago
Reply to  Brian Ash

Not at all what I’m trying to get at, but sometime the enemy of your enemy is your friend, and the enemy in this case is failing economies, and partnering with China in the US will create jobs here, and reallocate Chinese money into US bank accounts.

Vetatur Fumare
Vetatur Fumare
4 months ago

China thinks more long term (doesn’t always mean they’re making the right decisions, but still) while US generally thinks no further than the next quarterly numbers. But that doesn’t mean that we are going to benefit from better strategies. Those strategies are expressly to benefit China (understandably). It’s like saying the Hungarians had nothing to fear from the Mongols because the Mongols were better horsemen…

Wuffles Cookie
Wuffles Cookie
4 months ago

Your take is missing a word.

The Chinese gov is focused on planning and supporting Chinese industry with a general 10-20 year outlook in regards to all legislation and financial planning.

Fixed it for you.

Now why on earth would you expect the CCP to assist an American company with it’s development in an industry which it directly competes with Chinese companies?

Taco Shackleford
Taco Shackleford
4 months ago
Reply to  Wuffles Cookie

Chinese Auto companies do not directly compete with US companies here. Also take a look at Fuyao, a Chinese company making automotive glass in the US, they have started to make a profit and have expanded, adding more US manufacturing jobs.

Wuffles Cookie
Wuffles Cookie
4 months ago

You missed a word again.

Chinese Auto companies do not directly compete with US companies here yet.

You said the CCP was all about long term planning, it’s pretty simple to see whats going on.

Taco Shackleford
Taco Shackleford
4 months ago
Reply to  Wuffles Cookie

I’ll speak for myself, thank you very much. Chinese auto companies do not compete here because of the laws we have. Partnering with a Chinese company can help keep Chinese products off our shores, while benefiting from their expertise in some areas, while maintaining proper safety controls for US customers.

Wuffles Cookie
Wuffles Cookie
4 months ago

Fair enough. Suffice to say I disagree with you entirely, I am confident these partnerships are terrible ideas, and I am very happy to see politicians and citizens of all stripes vehemently object to them.

Studdley
Studdley
4 months ago

I think you also missed where China’s domestic automakers have started eating America’s lunch. No one is China is buying American cars anymore.

Taco Shackleford
Taco Shackleford
4 months ago
Reply to  Studdley

And no one in America is buying Chinese vehicles, because they can’t compete. Yes China has an incentive to boost their own on shore manufacturing through incentives and subsidies, but we do the same thing here (IRA) for vehicles manufactured in America.

Brian Ash
Brian Ash
4 months ago

Uh Polestar! Your lack of knowledge gives you zero credibility.

Last edited 4 months ago by Brian Ash
Taco Shackleford
Taco Shackleford
4 months ago
Reply to  Brian Ash

Polestar sold 15,800 cars Worldwide in Q2 2023, which is approximately the amount of rusty jeeps David has bought in his life. They are working on a manufacturing plant in the US that should be open in 2024. Should they not be allowed to build in the US?

Brian Ash
Brian Ash
4 months ago

You said “And no one in America is buying Chinese vehicles, because they can’t compete.” and “Chinese Auto companies do not directly compete with US companies here.”

WHICH ARE 100% FALSE STATEMENTS.

Taco Shackleford
Taco Shackleford
4 months ago
Reply to  Brian Ash

That was my response when Studdley claimed no one in China is buying American, but there are sales of Tesla’s and Buicks, and other GM ventures, as well as minimal amounts of Ford sales. Calm down, take a breath, and move on with life.

VolksWinkle
VolksWinkle
4 months ago

The Chinese economy is collapsing due to demographics. The one child policy has bit them hard. Massive unemployment in the key 20-25 age group. Just the beginning of the fall of China…

David Smith
David Smith
4 months ago
Reply to  VolksWinkle

This seems counter intuitive. How could you not find a job with less competition?

06dak
06dak
4 months ago
Reply to  David Smith

Over education, similar to many other places. They have a glut of highly educated young people that are not keen on taking low level jobs to fill the workforce thus there are openings and high unemployment.

Vetatur Fumare
Vetatur Fumare
4 months ago

Ford’s Marshall plant is interesting; feels like a Last Days of Rome kind of thing. Chinese intellectual property being built in the US… what a reverse from the 1980s. Exporting emissions and crappy jobs instead of having them on their own soil makes sense for the Chinese, but I am beginning to wish I hadn’t saddled myself with a USD mortgage. (I know it’s got to do with trade barriers, too, but it does feel like the beginning of something).

DadBod
DadBod
4 months ago
Reply to  Vetatur Fumare

Eh, if the dollar collapses our shit is fucked, mortgage or not.

MyCarDecisionsMakeFinancialAdvisorsCry
MyCarDecisionsMakeFinancialAdvisorsCry
4 months ago

Wonder if Ford is getting nervous the CATL deal will get squashed by regulators and is trying to get ahead of it – and double dip by using it as a threat to the UAW.

JDE
JDE
4 months ago

I think if they were banking on non-union wage rates to assembly line the widgets and so forth that make the Battery then the union struck and they want a lot of money to do rather simple tasks, that would make me rethink where I place my investments. Certainly if you have to pay back Billions in loans, you cannot do that with an unknown quotient with regard to the ROI factor.

MyCarDecisionsMakeFinancialAdvisorsCry
MyCarDecisionsMakeFinancialAdvisorsCry
4 months ago
Reply to  JDE

From a finance perspective, ford made $25B in profit last year and this is a $3.5B project. They could pay for it in cash if they wanted, but I take your point about unknown ROI.

My Goat Ate My Homework
My Goat Ate My Homework
4 months ago

$3.5B is the capital cost. That doesn’t take any running costs into account. The capital cost is almost negligible.

JDE
JDE
4 months ago

Ford is currently carrying a long term debt, for the quarter ending June 30, 2023, at $93.895B. I agree they are showing big windfalls, and I agree they should share some of it. the hard part to id is that the debt is already 10% higher than it was in 2022, and when you are beholden to stock holders, it becomes harder to get approval to spend the profits when they are so far in the hole already. Doesn’t help to have Farley announce losses expected for the EV cars to be in the Billions this year either.

Nsane In The MembraNe
Nsane In The MembraNe
4 months ago

I wanted to add something to the discussion today-the 2024 GR Corolla is getting a much needed premium package. It includes all the performance pack goodies but dresses up the interior with some suede seats, the better sound system, and some other goodies. It’ll sell for around $41,000 and I think it’s undoubtedly the way to get that car.

The Golf R and CTR run circles around the GRC interior wise and, at least at MSRP, they’re close enough to a loaded 23 Core model that they’re tempting, and the Circuit trim is too limited/similarly a downgrade at the same price as those cars. In addition the GR Yaris is getting an 8 speed automatic for the 24 MY, so I assume it will find its way to the GRC for 2025.

I’m very curious to see if it’s going to be a legit performance automatic or if it’s merely to check a box. The Japanese manufacturers are way behind the 8 ball on this front and the consensus on the automatic in the Toyobaru ruins the entire experience, so we’ll see. I’ll definitely check it out if the demand around them cools off in the next year or so.

10001010
10001010
4 months ago

I may have seen a GR Corolla in traffic the other day but I couldn’t get back to it to know for sure. I know they’re a limited series but I’m thinking the pricing and dealer markups are limiting their appeal a bit.

Nsane In The MembraNe
Nsane In The MembraNe
4 months ago
Reply to  10001010

There’s been a lot of backlash in the enthusiast community because of the markups/Toyota intentionally limiting production to drive up demand. I don’t think it’s a “the car is DOA” type of situation at all but I’ve only seen one in the wild and cars dot com says there are 23 within a 100 miles of me right now. Pretty much all of them are listed for well over MSRP.

Supply is going to outpace demand sooner or later and the prices will cool off. Hell I think it may happen soon to be honest, and it would be a good thing. I also think it’s a car that’s been the victim of its own hype to an extent. It just had so much attention and praise before it even hit the road, and the consensus seems to be that it’s really good but not necessarily the instant classic it’s been made out to be.

They’re also not great track cars stock. Folks have run into some cooling issues and the times they’re getting with them are good but not mind blowing. They tend to lap well behind CTRs and only slightly faster than the Ns.

Anyway, I really like car on paper and I’d started the process to get one before I wound up with my N. Ultimately I think I made the right choice for the time being. If prices come down to MSRP and the auto option is viable I may revisit in a few years. Unfortunately dailying a manual is kind of a non starter for me since my wife can’t drive stick and my commute of 6-7 miles can take as much as an hour because of traffic.

Could I suck it up? For sure! I just don’t want to. The DCT in my Kona N is the perfect middle ground for my needs. If the 8 speed in the GRC performs as well or better than the manual then I’ll be interested…but if it ruins/slows down the car significantly I won’t be.

10001010
10001010
4 months ago

I hope they come down at some point. I’d love to pick one of these up for $30K but at $40-50K there are other cars I can consider.

Nsane In The MembraNe
Nsane In The MembraNe
4 months ago
Reply to  10001010

Therein lies the issue. They’re very appealing at MSRP but once you factor in markups they’re within spitting distance of some cars they just can’t compete with. Paying $45,000-50,000 for a Core model with the rental spec interior doesn’t seem as appealing when it can also get you an Audi S3. Or things like a Supra, Mustang, Z, etc if you don’t need the extra space…which it doesn’t even offer much of the begin with compared to its competitors.

I also genuinely think the lack of an automatic option limits its appeal when the Ns and Golf variants offer DCTs. There’s a demographic of upper middle class professionals (heyyyyy that’s me!) that buy cars like this as compromises and a lot of us don’t want a manual for daily driving. I think the Integra Type S is moving slowly for pretty much identical reasons.

Enthusiasts/JDM fans don’t give a flying fuck and if anything prefer that it’s manual only because it creates a barrier to entry that only “hardcore” folks can get past…but the many of those folks buy cars like these as emotional/stretch purchases and they start to get priced out in the 40s/50s.

Dogisbadob
Dogisbadob
4 months ago

It’d be nice if the premium package included a sunroof. No Corolla hatch sold here was available with a factory sunroof, and they removed the manual transmission from the non-GR Corolla hatch in order to protect the GR.

Nsane In The MembraNe
Nsane In The MembraNe
4 months ago
Reply to  Dogisbadob

That’s obnoxious but very predictable Japanese manufacturer behavior. This is just what they do. They make manual transmissions the centerpieces of their cars then paywall them. Oh you want to row your own? That’s too bad, you’ve gotta pay one of our scummy dealerships $5000 over asking for a GR Corolla to get that experience. We’re SO sorry.

You want to row your own in an Integra? You can do that, but only if you equip $7,000 in options first. We’re SO sorry. Oh and the base transmission is a soul crushing CVT even though we developed a good FWD DCT for the ILX. That’s just TOO bad.

Honestly if the GRC does get an auto I wouldn’t put it past Toyota to make it the base transmission and make the manual an up charge.

Ottomottopean
Ottomottopean
4 months ago

I prefer this to the way it is/was in the more luxury space: they would only offer the manual in the low-powered, entry spec vehicle.
Remember the Hyundai Genesis Coupe? Manual on the 4cyl only. V6 was auto only. As was the case with so many of the Japanese makes; Lexus IS IIRC.

GreatFallsGreen
GreatFallsGreen
4 months ago

Like I said in another comment I don’t think anyone was ever going to spend $5-10k over a regular Corolla to get a GR just for a manual, Toyota just didn’t want to continue to certify it. But that said, I wouldn’t say it’s only the Japanese automakers, it’s just more acute with them because…they’re the only ones still offering them. Ford, GM, VW, Nissan locked you out of certain trims in the past if you wanted a manual. And it’s a heckuva lot better than years ago when manuals were only on base or lower-trim models. I’m on record for my own grievances with some manual packaging out there*, but I can’t say I disagree with offering it on better-equipped models. A manual isn’t necessarily the quicker or more efficient choice, so you have to want it to choose it, and most of those buyers are going to want some options too, myself included.

And even for the Integra which doesn’t have a “base” model in the traditional sense, being Civic-based, manual take rate is nearly 20% and that was before the Type S was out, so doesn’t seem to hurt there.

Edit: I otherwise agree with you on the GR Premium, before they announced it I didn’t realize some of those options were already offered on the Core now, but the Premium should make it easier to find if inventory picks up. And keeps it kind of consistent with the trim walk of the GR86 too.

Last edited 4 months ago by GreatFallsGreen
GreatFallsGreen
GreatFallsGreen
4 months ago
Reply to  Dogisbadob

I’m with you on the moonroof, and the Auris-turned-iM was the same way. It’s possible the GR wouldn’t offer the moonroof though, since the Type-R doesn’t and the Golf R previously didn’t.

But I don’t think they removed the manual from the standard Corolla to protect the GR, it’s highly unlikely a regular Corolla buyer would be stepping up to a GR just to get a manual. Much more likely they just didn’t want to continue to certify it for the low take rate + they’re shifting the product mix more to hybrids. Toyota dropped the manual from Canadian Corollas too far as I can tell, and that’s a market that usually has more manual availability, at Honda and even Nissan which continues to offer a manual Sentra there despite not offering one in the US for years.

Dogisbadob
Dogisbadob
4 months ago

Toyota said the manual take rate was 12% on the Corolla hatch

GreatFallsGreen
GreatFallsGreen
4 months ago
Reply to  Dogisbadob

So even more likely then they couldn’t justify the cost for the sales they got. I wish I could find a breakout of the hatch sales, the iM still was due to its stint as a Scion and seemed to run about 5-6% of Corolla sales, so I don’t think the hatch would be much higher than that now still. The overall take rate for the regular manual in the Corolla line would surely have been much lower since the sedan offered the same powertrain. But in a time where even the GTI is dropping the manual I don’t think the sales alone are enough to make the call for the manufacturers.

Richard Odenweller
Richard Odenweller
4 months ago

The truly sad thing is that these Republicans are doing this so that they personally benefit using this as a wedge issue instead of what’s good for the state.

JDE
JDE
4 months ago

Huh? What are the Republicans doing exactly in the article here? Besides the Orange headed psuedo-Republican making a visit to the picket line, and The Tom Dude talking out his ass about firing everyone, this is really just about inflation causing workers, especially the ones screwed over by the older UAW members in 2007 wanting to be able to buy one of those fancy new $50-80 K mid level Ferd Trucks….Truck Gang

Wuffles Cookie
Wuffles Cookie
4 months ago

Your logic does not square the circle. The Democrat-pushed IRA gives massive incentives for domestic production of EVs and their subcomponents. While the execution is debatable, this has generally been viewed as a Good Thing on both sides of the aisle, as it is good for the auto industry states and their workers. But when a Republican objects to foreign ownership of battery plants, this is somehow… not a good thing, despite the IRA being a good thing? Doesn’t follow chief.

V10omous
V10omous
4 months ago

Naturally, the UAW wasn’t happy about this move. The undertone being, “Do what we’re asking, or this battery plant gets it.”

Union members whining about implied threats, I almost can’t stand the irony.

My Goat Ate My Homework
My Goat Ate My Homework
4 months ago
Reply to  V10omous

It’s entertaining to say the least.

Union: We’re shutting down plants by refusing to work. Oh, and we’re getting the Teamseters (who have no skin in the game at all) to do the same thing. Take that.
Ford: We’re going to idle a huge project that is just about to get underway.
Union: That’s not faaaaiiiirrr.

V10omous
V10omous
4 months ago

I was speaking more in the sense of “something bad is going to happen to you and/or your vehicle if you cross this picket line”, but really there are too many good choices to pick just one.

Ottomottopean
Ottomottopean
4 months ago
Reply to  V10omous

Literal beat-downs for anyone that crosses the picket line, block parts deliveries by blockading warehouses, threatening their own workers before a vote. Take your pick from a long list of shady tactics.

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