Ford pares back Marshall plant, and state incentives will follow

Ford Motor Co. will end its pause at the BlueOval Battery Park in Marshall, but will hire 800 fewer people than expected, the automaker announced Monday. Michigan officials say the size of the project’s corporate welfare package will also be adjusted.

All told, the project is in line for about $1.8 billion in various incentives, ranging from direct cash grants to tax abatements.

Just nine months ago, in February, Ford announced plans to hire 2,500 workers at the facility, which will build components of batteries for electric vehicles. The change of plans should bring a change in taxpayer awards, officials said.

Gov. Gretchen Whitmer supported the project. When the Ford announcement was made in February, she and Lt. Gov. Garlin Gilchrist II joined company officials on stage.

On Monday she told Bridge Michigan the state will likely adjust Ford’s incentive package.

“As Ford has had to make some changes, we’ve had very clear open line of communication, and the state’s role will change as well,” Whitmer said. “When one aspect gets resized, so does the other.”

House Republican Leader Matt Hall, R-Richland Township, did not support the incentives.

“The project already provided a poor return on investment, doling out more than $700,000 per job,” Hall said in a statement. “If incentives aren’t scaled back, the reduced job plans would now leave taxpayers with an even lower return on investment — giving more than $1 million in incentives for each job created.”

Crain’s Detroit Business reports that the overall amount spent on the project will fall from $3.5 billion to $2.2 billion. As Kurt Nagl reports, the public incentives break down as fellows:

The project — called BlueOval Battery Park Michigan — received roughly $1.7 billion in state subsidies, including a $210 million Critical Industry Program grant to Ford, a Renaissance Zone tax exemption worth $772 million over 15 years, $630 million for MDOT and the Marshall Area Economic Development Alliance, and $120 million for other site prep work. The CIP grant, Renaissance Zone exemption and PA 198 industrial property tax abatement will be reduced in step with the project downsizing, MEDC spokesman Otie McKinley said.

Officials have not said how much the taxpayer money would be pared back.

Ford is teaming up with a Chinese firm, CATL, on the project. That United Auto Workers has raised national security concerns and drawn congressional scrutiny to the project.

But the political scrutiny never paused BlueOval Battery Park. It took a UAW strike, which started on Sept. 15, to do that.

About two weeks after the UAW strike began, Ford paused work at the site. The very next day, however, the Michigan Strategic Fund gave the project $65 million for site development.

The economic development agency that granted the money said it was confident the project would resume. Political officials and UAW leadership all talked about the pause as if it were a negotiating ploy.

And now that the strike is over, the pause has ended. But plans have changed.

“We are pleased to confirm we are moving ahead with the Marshall project, consistent with the Ford+ plan for growth and value creation,” the Dearborn automaker announced. “However, we are right-sizing as we balance investment, growth, and profitability. The facility will now create more than 1,700 good-paying American jobs. ...”

Ford announced plans to pause $12 billion worth in EV projects, citing low demand owing to high prices.