Ford gigantic 'Blue Oval City' to build next-gen electric F-Series trucks

Ford just announced it’s going to dump boatloads of money into Tennessee and Kentucky to create a couple of mega sites for electric vehicle production. In clearer terms, Ford and SK Innovation are investing $11.4 billion in a couple of massive projects in these states, all with EV production in mind.

Combined, they mark the single largest manufacturing investment the 118-year-old company has ever made and are among the largest factory outlays in the world. Together they will create nearly 11,000 jobs.

The first of the investments is a new $5.6 billion “mega campus” in Stanton, Tenn. It’s going to be formally named “Blue Oval City,” because it’s literally going to be as big as a city. The complex will comprise 3,600 acres — almost 6 square miles. Ford plans on using it for vehicle assembly, battery production and a supplier park. It will be the home of approximately 6,000 new jobs and will serve as “a hive of technical innovation” to build next-gen electric F-Series trucks. Ford says it will be a vertically integrated system and feature numerous sustainability solutions and use renewable resources. The goal of the plant will be total carbon neutrality by the projected start of production in 2025. 

Another $5.8 billion is being spent by Ford in conjunction with SK Innovation to build something called the BlueOvalSK Battery Park in Glendale, Ky. This complex doesn’t get the same, snappy “city” moniker as the Tennessee complex does, but it’s still massive at 1,500 acres. The Battery Park will have two battery plants, both dedicated to supplying Ford’s assembly plants with locally produced battery packs. Ford isn’t getting too specific about what cars these battery packs will go into other than saying they’ll be for both Ford and Lincoln vehicles. In total, Ford predicts the plant will produce up to 86 GWh annually. The plant will be the home of 5,000 new jobs in Kentucky.

“This is our moment – our biggest investment ever – to help build a better future for America,” says Jim Farley, Ford CEO. “We are moving now to deliver breakthrough electric vehicles for the many rather than the few. It’s about creating good jobs that support American families, an ultra-efficient, carbon-neutral manufacturing system, and a growing business that delivers value for communities, dealers and shareholders.”

The overall investment between Ford and SK Innovation announced today is $11.4 billion, but note that Ford is responsible for $7 billion, while SK is handling the rest.

The new factories will provide a vast new supply of jobs that will likely pay solid wages. Most of the new jobs will be full time, with a relatively small percentage having temporary status to fill in for vacations and absent workers.

With the new spending, Ford is making a significant bet on a future that envisions most drivers eventually making the shift to battery power from internal combustion engines, which have powered vehicles in the United States for more than a century. Should that transition run into disruptions or delays, the gamble could hit the company's bottom line. Ford predicts 40% to 50% of its U.S. sales will be electric by 2030. For now, only about 1% of vehicles on America's roads are powered by electricity.

In an interview Monday, CEO Jim Farley said it would be up to the workers at the new plants to decide whether to be represented by the United Auto Workers union. That question could set up an epic battle with union leaders, who want employees of the future to join the union and earn top UAW production wages of around $32 per hour. It represents a high-stakes test for the UAW, which will need jobs for thousands of members who will lose work in the transition away engines and transmissions for petroleum-powered vehicles.

Ford’s move also could put the company at odds with President Joe Biden’s quest to create “good-paying union jobs” in a new, greener economy.

Farley said it’s too early to talk about pay or unionization at the new factories. He stressed that Ford will maintain a geographic manufacturing balance when the company’s investments in Ohio and Michigan are included. Ford and General Motors have UAW-represented plants in Kentucky and Tennessee, states where it is common for political leaders to actively campaign against unionization.

“We love our UAW partners,” Farley said. “They’ve been incredible on this journey of electrification so far. But it’s up to the employees to decide.”

Just four months ago, Ford said it would build two new battery plants in North America. But Farley said demand for the electric Mustang Mach E SUV and over 150,000 orders for the F-150 electric pickup convinced the company to increase battery output.

Farley said Ford intends to lead the world in electric vehicles, a title now held by upstart Tesla Inc., which is adding jobs at a third factory now under construction near Austin, Texas.

Ford picked the Kentucky and Tennessee sites in part because of lower electricity costs, Farley said, as well being less exposed to flooding and hurricanes than other states. Battery factories use five times the electricity of a typical assembly plant to make cells and assemble them into packs, so energy costs were a big factor, Farley said.

The company also needed huge tracts of land for the plants that weren’t available in other states, Farley said.

Both Southern states also have skilled labor forces and are willing to train workers for the new jobs, he said.

“These jobs are very different than the jobs we’ve had in the past,” Farley said. “We want to work with states who are really excited about doing that training and giving you access to that low energy cost.”

The Tennessee Valley Authority, which serves the Memphis-area site, sells industrial electricity at a price that’s lower than 93% of competitors nationwide, said CEO Jeff Lyash. Rates have stayed flat for the past decade and are planned to stay flat for the next 10 years, he said.

Combined, the three new battery plants will be able to supply enough batteries to power 1 million vehicles per year, about 129 gigawatts of power, Ford Chief Operating Officer Lisa Drake said.

Shares of Ford Motor Co., which is based in Dearborn, Michigan, rose more than 4% in extended trading after the new factories were announced late Monday.

Reaction from the union was tempered Monday, with officials seemingly optimistic about organizing the factories.

“We look forward to reaching out and helping develop this new workforce to build these world-class vehicles and battery components,” union President Ray Curry said in a statement.

Includes material from Associated Press.

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