The White House is taking issue with Ford Motor Co.'s partnerships with Chinese companies in a pointed letter sent from U.S. Secretary of Transportation Sean Duffy to Ford CEO Jim Farley.
The letter, dated Sept. 3, but which the Department of Transportation said it sent to Farley on Sept. 8, criticizes what it said is the Dearborn-based automaker's increasing reliance on foreign adversaries, including China, for critical manufacturing components.
Ford is partnered with CATL in its development of electric vehicle batteriesand battery energy storage systems. In July, Ford announced it and Geely Automobile Holdings, based in Hangzhou, China, agreed to form a Europe-focusedjoint venture at Ford’s factory in Valencia, Spain, where Ford makes the Ford Kuga,
a small SUV sold in European and global markets.
Ford said on July 23 the new joint venture with Geely will including building "multienergy passenger vehicles for the European market." That means vehicles offered in different powertrains: electric, hybrid or gasoline, giving the automakers flexibility in what they can offer car buyers. Ford spokesman Dave Tovar told the Detroit Free Press there will be a new multienergy crossover for Ford, a new member for the Bronco family, plus two new all-electric Geely SUVs. All of those vehicles will be built in Europe and sold in Europe, Tovar said. There are no plans to bring any of them to the United States.
White House has 'profound concern'
In the letter, which the Department of Transportation provided to the Detroit Free Press, Duffy starts off by saying he is writing to express, "the profound concern of the U.S. Department of Transportation (DOT)· regarding the strategic trajectory of Ford Motor Company (Ford or Company), specifically as it pertains to American national automotive manufacturing integrity, supply chain exposure, and reliance on technologies of foreign adversaries."
It wasn't immediately clear what impact the letter or the administration's stance could mean for Ford.
Duffy said the administration recognizes there is intense global competition, however, Ford's recent decisions "paint a troubling picture of a foundational American brand actively intertwining its future with Chinese state-backedenterprises" and the goverment is "deeply alarmed by Ford's continued reliance on licensed technology from Chinesebattery manufacturer CATL at the operational BlueOval Battery Park facility in Marshall, Michigan."
Ford's Blue Oval Battery Park in Marshall is making electric vehicle batteries starting this year. It makes Ford the first to deliver lithium-iron phosphate (LFP) batteries in the U.S. for mainstream consumer automotive use. The LFP prismatic batteries will power Ford’s upcoming new midsize electric truck called Fathom, which is the first vehicle on Ford’s Universal EV Platform due to market in 2027.
Ford is working with CATL in its production at BlueOval Battery Park Michigan. CATL is the world’s leading battery manufacturer, located in China. The Marshall site was controversial when it was proposed with some residents opposing the $3.5 billion project in the small community located just a few miles east of Battle Creek.
But in July, Marshall Mayor Scott Wolfersberger said the Ford project is helping the local economy as Ford adds to the workforce. Dozens of homes are being built and hundreds more are planned over the next few years with more than 1,300 new housing units proposed or completed since Ford announced the project in Marshall in early 2023.
The Marshall plant will also will make storage systems for Ford Energy, Ford’s wholly owned subsidiary based in Dearborn. Battery energy storage systems are large batteries, some as big as shipping containers, used by utility companies and data centers to store energy for use later to stabilize the power grid and to avoid blackouts.
Wall Street has been bullish on Ford Energy, noting it has an edge in this space because of its partnership with CATL, a leading manufacturer of battery storage systems.
Duffy has more issues with Ford
But in his letter to Farley, Duffy said that although the Marshall facility has started production on Lithium Iron Phosphate cells, "the prioritization of imported Chinese technical expertise and operational know-how-even in a scaled-back capacity-challenges the spirit of American national and economic security and supply-chain independence policies."
Duffy also pointed to Ford's joint venture with Geely in Spain saying it helps adversaries secure a vital foothold in Western markets.
"And the Company's ongoing talks with BYD for hybrid vehicle components could lead to further embedding subsidized foreign technology into Ford's core supply chains," Duffy wrote. "Furthermore, the framework you proposed at the Detroit Auto Show to facilitate Chinese joint ventures on United States soil, alongside delaying the reshoring of Lincoln models like the Nautilus until 2030, leaves an unacceptable, multi-year window of reliance on Chinese manufacturing while depriving skilled American workers of vital manufacturing jobs."
Duffy's letter accuses Ford of "intentionally" deepening its operational dependencies on the Chinese competitors and by doing so Ford "fails to act as the reliable partner the American public and this DOT require."
Duffy demands that Ford demonstrate "a level of corporate citizenship that prioritizes the long-term resilience and technological sovereignty of the United States automotive" industry over short-term partnerships with "questionable foreign alliances."
"Iconic American companies, like Ford, are also expected to out-innovate competitors. To that end, they need to chart clear paths to technological self-reliance," Duffy said. "I urge you to reflect on these concerns and national necessities and adopt reasonable strategies that prioritize American workers, utilize allied supply chains, and promote the self-reliance and integrity of the domestic automotive industry."
Ford's reaction
Ford did not immediately provide to the Detroit Free Press a response to Duffy's letter.
But in July, when Ford announced its Geely partnership, one Michigan lawmaker slammed Ford for partnering with the China-based company. U.S. Rep. John Moolenaar, R-Caledonia, who is chairman of the Select Committee on China, denounced Ford's new partnership with Geely saying Ford is actively helping the Chinese Communist Party to dominate global automotive supply chains and increase the world’s dependence on China.
At that time, Ford spokesman Dave Tovar provided the following comment in response to Moolenaar's criticism: "No company has done more to advance the U.S. auto industry than Ford. We build more vehicles in the U.S., ship more American-assembled cars overseas, and employ more U.S. hourly workers than anyone else in the industry.
"Over in Europe, the landscape is changing fast. Chinese automakers are gaining ground, and local policies are forcing every car company to get leaner and smarter — which is exactly what we’re doing with our plant in Valencia, Spain. While other U.S. automakers chose to exit Europe altogether, we're proactively building strategic partnerships with companies like Renault and Volkswagen so we can compete — and win — in the European market."
(This story is developing.)
Jamie L. LaReau is the senior autos writer at USA TODAY Co. who covers Ford Motor Co. for the Detroit Free Press. Contact Jamie at jlareau@freepress.com. Follow her on Twitter @jlareauan. To sign up for our autos newsletter. Become a subscriber.
This article originally appeared on Detroit Free Press: White House takes aim at Ford and Farley for Chinese ties
