Bloomberg Businessweek October 11, 2021 pp15-17|Business|”Where EV Growth is Bad News” “Traditional carmaking made Michigan the Motor Capital. Electric cars could do the reverse.” “THE BOTTOM LINE Ford’s $11.4 billion investment in EV and battery plants will result in almost 11,000 jobs. But they won’t go to workers in its home state of Michigan
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Michigan’s dominance in automaking is likely tied to the fate of the internal combustion engine as the state has lost recent rounds to locate “$11.4 billion in new electric vehicle and battery factories in favor of Kentucky and Tennessee.” Ford will be building its “first brand-new assembly plant in a half-century…in a rural area near Memphis.” Ford along with partner SK Innovation, Co. (South Korea) will build four factories that plan to “employ almost 11,000 workers.”
Finger-pointing is well underway in Michigan but Bill Ford (Chairman Ford Motor Company) pointed out that Michigan was considered “for its EV expansion, but it just didn’t have a shovel-ready location that met the automakers needs, including enough acerage to match the 6-square mile megasite in Tennessee.” CEO Jim Farley (Ford Motor Company) notes that Ford has invested heavily in Michigan to the tune of “$7 billion in the past five years.” Ford will be making its electric F-150 in its “vast Rouge factory” in Dearborn, Michigan.
If EVs replace internal combustion then all the other factories, supplier companies and workers, currently 32,000, will be at risk as “EVs don’t use conventional engines and drivetrains.” As EV are more expensive to produce, makers looked elsewhere for lower-wage "right to work states" like Kentucky and Tennessee where the cost of electricity is $0.0606 and $0.0585 respectively compared to Michigan and $0.008. More notable, the profitable electric Mustang Mach-E is built in “Mexico, where wages are a fraction of what U.S. workers make.”
For their part Tennessee and Kentucky have loaded up incentives of $500 million and $300 million respectively. Kentucky also handed “over a 1,551 acre site south of Louisville." At a ceremony in Stanton, TN at the 3,600 acre site dubbed Blue Oval City, Governor Bill Lee of Tennessee said “West Tennessee will now lead the nation in the next industrial revolution.”
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