Yahoo Autos Fain: EV Plant Pause 'A Shameful, Barely-Veiled Threat By Ford To Cut Jobs'
Good morning! It’s Tuesday, September 26, 2023, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
1st Gear: Ford’s $3.5 Billion Battery Plant Put On Hold
Ford has reportedly paused work on its $3.5 billion EV battery plant in Michigan, saying it’s not sure about its ability to competitively operate the plant while it’s locked in contract negotiations with the United Auto Workers Union.
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This isn’t the first time this plant has been in the news. Congressional Republicans have been probing it because of concerns the plant could allow U.S. tax subsidies to flow into China, and it could leave Ford dependent on Chinese tech.
Representative Mike Gallagher, the Republican chair of a House select committee on China, said lawmakers were “encouraged to see Ford take a crucial first step to reevaluate its deal” with CATL. “Now, Ford needs to call off this deal for good,” he added.
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In 2022, Congress passed the $430 billion Inflation Reduction Act (IRA), which will bar $7,500 in future consumer EV tax credits if any battery components are manufactured or assembled by a “foreign entity of concern.”
Ford has been awaiting guidance to determine if batteries operated by the Marshall plant would run afoul of the requirements.
Ford has reportedly urged the Treasury to take a more narrow view of the restriction, saying that an “overly expansive interpretation” could make clean vehicle credits “largely unavailable.”
2nd Gear: Ford Says UAW Talks Have A Long Way To Go
Ford says that despite the fact it has made progress in some areas, there are still “significant gaps to close” on a number of key economic issues before a new deal can be agreed upon with the United Auto Workers union. From Reuters:
The “issues are interconnected and must work within an overall agreement that supports our mutual success,” it said in a late evening statement after talks over the weekend.
The UAW, which on Friday cited “real progress” in talks with the No. 2 U.S. automaker, did not immediately comment.
In contrast to Ford, the UAW has expanded strikes against General Motors and Chrysler-parent Stellantis to 38 parts distribution centers across the United States. It was not immediately clear if main table bargaining took place with GM and Stellantis over the weekend.
The strike initially started on September 15 and one assembly plant for each of the Big Three. Additional GM and Stellantis facilities went on to add about 5,600 workers to the 12,700 already on strike.
The Detroit Three automakers have proposed 20% raises over 4-1/2 years, while the UAW is seeking 40% along with 32-hour-work weeks, the return of defined benefit pensions and to eliminate wage gaps separating newer and older employees.
UAW President Shawn Fain said last week that Ford had improved its contract offer. It includes a boost to profit sharing and agreeing to let workers strike over plant closures, but he added that the union still has serious issues to resolve.
3rd Gear: Supplier To Lay Off Workers Amid Strike
An automotive supplier in Wixom, Michigan, announced it could be laying off a “substantial portion” of its 171 hourly workers because of “unforeseen business circumstances.” It comes as similar suppliers are blaming the UAW strike for financial challenges.
This move could reportedly become more common as the strike against Ford, GM, and Stellantis moves into its second week. From The Detroit Free Press:
In a document filed Thursday with the state, Eagle Industries, Inc. indicated “total laid off” employees as 171. The move affects plant workers, production and administration employees.
“As a result of unforeseen business circumstances, we are providing information in anticipation of a potential layoff at the worksite. The estimated number of workers is subject to change due to evolving business circumstances,” the company said in a statement provided to the state.
But Eagle Industries President John Bull said his company filed the paperwork as a precaution. While they employ approximately 171 hourly workers, he said any possible layoff would likely affect 55 to 60 employees.
