Keith Naughton
Fri, June 23, 2023
(Bloomberg) -- The United Auto Workers union criticized a $9.2 billion US government loan to Ford Motor Co. and South Korea’s SK On as a “massive” handout to a venture creating “low-road jobs.”
“Why is Joe Biden’s administration facilitating this corporate greed with taxpayer money?” UAW President Shawn Fain said in a statement Friday. “The switch to electric engine jobs, battery production and other EV manufacturing cannot become a race to the bottom. Not only is the federal government not using its power to turn the tide — they’re actively funding the race to the bottom.”
Read More: Ford Gets More Government Aid for EVs Wall Street Has Doubted
The US Department of Energy said Thursday it’s giving Ford and SK On the largest loan ever from a program to promote green transportation for three battery plants the companies are building in Kentucky and Tennessee. The factories due to open mid-decade will employ more than 7,500 workers, but it’s not yet clear if they will be represented by a union. The UAW is bracing for fight over the switch to EV manufacturing in contract talks with the Detroit automakers this summer.
The UAW said wages at a General Motors Co. joint venture battery plant in Ohio are half what workers made when the facility previously manufactured traditional internal combustion engine cars.
“Not only is the White House refusing to right this wrong, they’re giving Ford $9.2 billion to create the same low-road jobs in Kentucky and Tennessee,” Fain said. “It’s an absolute shame to see another Democratic administration doubling down on a taxpayer-funded corporate giveaway.”
Ford defended its efforts, saying the plants being funded by the government loan will create 7,500 “good-paying” jobs.
“Ford Expects BlueOval SK will pay competitive wages and benefits to attract and retain the workforce needed to build high-tech batteries,” the company said in an emailed statement. “Employees at BlueOval SK’s battery plants will be able to choose whether they organize, a right that Ford fully respects and supports.”
UAW rips Biden administration on US loan to Ford joint venture battery plant
The corporate logo of Ford is seen at Brussels Motor Show
Fri, June 23, 2023
By David Shepardson
WASHINGTON (Reuters) - United Auto Workers (UAW) union President Shawn Fain on Friday harshly criticized the U.S. Energy Department plan to lend $9.2 billion to a joint venture of Ford Motor and South Korea's SK On to build three U.S. battery plants.
Fain called the loan a massive "giveaway" with "no consideration for wages, working conditions, union rights or retirement security" that would help create low-paying jobs adding, "Why is Joe Biden’s administration facilitating this corporate greed with taxpayer money?"
The wages of workers at battery JV plants are expected to be a key issue in contract talks that start next month with the Detroit Three automakers.
The $9.2 billion low-cost government loan for the BlueOval SK joint venture is the biggest ever from the government auto lending program that will help finance construction of three plants in Kentucky and Tennessee. SK is a unit of South Korea's SK Innovation.
The joint venture is building battery plants in Kentucky and Tennessee.
Ford on Friday said it "expects that BlueOval SK will pay competitive wages and benefits to attract and retain the workforce needed to build high-tech batteries" and added that workers "will be able to choose whether they organize, a right that Ford fully respects and supports."
The White House said Biden and UAW are working toward the same goal -- "to ensure the future of the auto industry is made here in America, with good-paying, union jobs. ... The president respects the UAW for working hard for the interests of the working people they represent, and the president will keep working hard toward that goal as well."
The UAW in May said it was not yet endorsing Biden for reelection, citing his electric vehicle policies.
"Not only is the federal government not using its power to turn the tide – they’re actively funding the race to the bottom with billions in public money," the UAW said on Friday.
The UAW and Senator Bernie Sanders in April criticized a General Motors/LG Energy Solution joint venture battery plant for paying workers much less than GM assembly plant employees even though it benefits from hefty U.S. government tax credits.
The starting salary for workers at a Warren, Ohio, JV Ultium Cells plant is $16.50 an hour, which rises to $20 an hour after seven years. Union workers at a nearby Ohio GM assembly plant that closed in 2019 made at least $32 an hour.
The Energy Department last year awarded $2.5 billion to help finance construction of Ultium's new lithium-ion battery plants, including Warren, from the same program used for the Ford loan.
(Reporting by David Shepardson; Editing by Aurora Ellis and Mark Porter)
Ford-SK venture to get $9.2 billion US loan for battery plants
FILE PHOTO: The Ford logo is pictured at the Ford Motor Co plant in Genk
Thu, June 22, 2023
By David Shepardson
WASHINGTON (Reuters) - The U.S. Energy Department plans to lend up to $9.2 billion to a joint venture of Ford Motor and South Korea's SK On to help it build three battery plants in Tennessee and Kentucky, the biggest-ever award from the government program.
The conditional commitment for the low-cost government loan for the BlueOval SK joint venture comes from the government's Advanced Technology Vehicles Manufacturing (ATVM) loan program.
SK is a unit of South Korea's SK Innovation. The joint venture is building two battery manufacturing plants in Kentucky and one in Tennessee capable of collectively producing more than 120 gigawatt hours annually, the Energy Department said.
Jigar Shah, head of the Energy Department's Loan Programs Office, said in an interview its goal "is to have people choose to put these supply chains here in the United States, not in other countries, and to do them faster and more confidently here."
Ford and SK announced in 2021 they would invest $11.4 billion to build a F-150 electric vehicle (EV) assembly plant and three battery plants in the United States with Ford investing $7 billion. Ford shares were up 1.2% in afternoon trading.
This is the sixth loan for battery supply chain projects from the ATVM program.
PUBLIC-PRIVATE COLLABORATION
The project is expected to create 5,000 construction jobs in Tennessee and Kentucky, and 7,500 operations jobs once the plants are up and running.
"Major technology transitions have always been accelerated by collaboration between the public and private sectors," said Ford Treasurer Dave Webb.
BlueOval SK CEO Robert Rhee said the loan will be used to "strengthen critical domestic supply chains, and produce high-quality batteries for future Ford and Lincoln electric vehicles."
The $430 billion Inflation Reduction Act approved in August also creates a new $45 per kilowatt battery production tax credit. Ford CEO Jim Farley said in October that from 2023 to 2026, "we estimate a combined available tax credit for Ford and our battery partners could total more than $7 billion."
The loan will fund two battery projects in Republican-leaning states. Many Republicans in Congress have criticized the Biden administration's efforts to boost battery-powered vehicles and battery production.
Last year, the department awarded a joint venture of General Motors and LG Energy Solution $2.5 billion to help finance construction of new lithium-ion battery cell manufacturing facilities. The loan to Ultium Cells LLC is for facilities in Ohio, Tennessee, and Michigan.
In September 2009, Ford was awarded a $5.9 billion low-cost government loan from the same program, an important source of liquidity in the aftermath of the global financial crisis. It completed its payments last year, after deferring some in 2020.
Ford announced in February a separate deal to spend $3.5 billion to use technology from Chinese battery company CATL to build a battery plant in Michigan. That plan has faced criticism from some Republicans.
Tesla received a $465 million loan in 2010 from the program that allowed it to open a plant in Fremont, California, and build the Model S electric car. It repaid the loan in 2013.
(Reporting by David Shepardson; Editing by Toby Chopra, David Evans, Alexander Smith and Aurora Ellis)
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