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One governor is describing a planned facility as the largest economic development project his state has ever seen.
Ford Motor Co. and South Korea-based SK Innovation unveiled plans this week to invest $11.4 billion across two massive industrial sites, located in Tennessee and Kentucky, where the companies say they will employ thousands of workers to make electric pickup trucks and batteries to power Fords and Lincolns.
The states will provide hundreds of millions of dollars in subsidies as part of the arrangement, which will create close to 11,000 jobs in total, with about 5,000 in Kentucky and around 5,800 in Tennessee, according to the companies and public officials.
Gov. Andy Beshear’s office described the planned $5.8 billion battery manufacturing complex in Kentucky as the “single largest economic development project” in the state’s history. “It will transform our economy, creating a better Kentucky with more opportunities for our families for generations,” the governor, a Democrat, said.
“Never again will we be thought of as a flyover state,” he added.
Beshear told the Lexington Herald-Leader on Monday that Kentucky would offer an incentive package for the project that includes a forgivable loan of up to $250 million if the companies hit certain investment and job creation targets, along with the conveyance of about 1,550 acres of property for the facility and another $36 million that would go towards job training.
The governor’s office specified that the 5,000 estimated jobs tied to the facility included only full-time positions there, and not construction, supplier or dealership employment. The Kentucky site will be in Hardin County, which is south of Louisville, along Interstate 65.
Ford plans to put up $7 billion for the facilities in the two states. It describes this sum as the biggest U.S. investment in electric vehicles at one time by any automaker and says that it is part of the company’s broader plans to pump $30 billion towards electric vehicles through 2025. Ford is aiming for fully electric vehicles to make up 40% to 50% of its U.S. sales by 2030.
Big Plans for Tennessee Too
In Tennessee, Ford and SK Innovation have plans to invest $5.6 billion to build a 3,600-acre “mega campus” that they’re calling Blue Oval City, where they say they will produce all-electric F-Series trucks and advanced batteries beginning in 2025. The facility will be located at an industrial site along Interstate 40, northeast of Memphis.
Ford says the site will be among the largest auto manufacturing campuses in U.S. history, covering nearly 6 square miles.
“This is a watershed moment for Tennesseans as we lead the future of the automotive industry and advanced manufacturing,” Gov. Bill Lee, a Republican, said in a statement.
The state, Lee’s office said, will offer “an enhanced incentive totaling more than $500 million for successful completion of the project.” The governor indicated that he will call a special legislative session this fall to address issues related to the project's funding and oversight.
Ford’s announcement comes as the Biden administration and Democrats in Congress attempt to move ahead with an infrastructure bill and a separate spending package that would provide support for electric vehicles, such as funding for charging infrastructure and rebates for purchases. Meanwhile, U.S. automakers, including Ford, are teeing up new electric models.
Both Kentucky and Tennessee are “right-to-work” states where employees cannot be required to join a union as a condition of employment. Even so, the United Auto Workers union struck an upbeat tone about the announcement.
“We commend Ford for investing in the U.S., resulting in the creation of thousands of good middle-class jobs. The UAW is eager to work with Ford to continue to assure the culture of manufacturing high quality vehicles and components for their customers,” Chuck Browning, UAW vice president and director of the union’s Ford Department, said.
Ford touted aspects of its plans that are meant to be environmentally friendly. For instance, the Tennessee assembly plant will be designed to be carbon neutral and to have zero waste going to landfills once it’s fully up and running. “Ford will lead America’s transition to electric vehicles and usher in a new era of clean, carbon-neutral manufacturing,” said the company's Executive Chair Bill Ford.
SK Innovation has roots as an oil refiner in South Korea, but has other lines of business as well. The company says it will split off its battery operation on Oct. 1 as a wholly owned subsidiary. Investments in the Tennessee and Kentucky battery plants are planned under what SK Innovation and Ford are calling BlueOvalSK, a joint venture the companies have in the works.
Bill Lucia is a senior editor for Route Fifty and is based in Olympia, Washington.