Ford CEO says UAW holding labor deal ‘hostage’ over fate of battery plants

5:40 pm Friday, September 29th, 2023

By David Shepardson

WASHINGTON (Reuters) – Ford Motor Chief Executive Jim Farley on Friday accused the United Auto Workers union of holding up a new U.S. labor agreement in a bid to force the automaker to pay workers at new battery plants the same top wages as workers at assembly plants.

Farley also disclosed the automaker is awaiting “final language” from the U.S. Treasury on whether batteries made at a planned Michigan plant using Chinese technology will qualify for tax credits.

“The UAW is holding the deal hostage over battery plants,” Farley said, and claimed a “bad deal” could threaten financial viability of some U.S. vehicle production. .

UAW President Shawn Fain said Farley was not telling the truth about the negotiations and said the sides were far apart on core economic proposals including “job security in this EV transition, which Farley himself says is going to cut 40% of our members’ jobs.”

On Monday, Ford said it had paused work on its $3.5 billion Marshall, Michigan battery plant that will use technology licensed from Chinese battery company CATL, citing concerns about its ability to operate competitively.

In 2022, Congress passed the Inflation Reduction Act (IRA) barring $7,500 in future consumer EV tax credits if any battery components are manufactured or assembled by a “foreign entity of concern.”

Ford is awaiting guidance to determine if batteries produced by the Marshall plant would meet the requirements. “We can make Marshall a lot bigger or a lot smaller,” Farley said.

On Sept. 8, Ford wrote Treasury Secretary Janet Yellen and Energy Secretary Jennifer Granholm warning that an unfavorable interpretation of the foreign entity provision would lead the automaker to make “fewer batteries in Michigan, shrinking that project and affecting the volume at EV assembly plants outside of Michigan. This will mean fewer U.S. jobs.”

This week, the chairs of three U.S. House committees demanded Ford turn over documents tied to the CATL partnership.

Republican lawmakers have been probing Ford’s battery plant plan for months over concerns it could send U.S. tax subsidies to China and leave Ford dependent on Chinese technology.

(Reporting by David Shepardson; Editing by Chris Reese and David Gregorio)