Little more than a year ago, Ford seemed to be one of the auto industry’s big skeptics when it came to the shift to battery-electric vehicles. All that changed in August 2020, when Jim Farley was named the company’s new CEO. Since then, Ford has seemed to be racing competitors like General Motors and Volkswagen to see who could spend more on electrification.
In May, the automaker announced plans to launch an all-electric version of the familiar F-150 pickup. Weeks later, it more than doubled its EV investment plans to $30 billion by 2025. Earlier this month, it said it would double the capacity of the Lightning plant due to high demand.
But the big news this week is the $11.4 billion investment planned to create both Blue Oval City, a ground-up assembly complex near Memphis, along with twin battery plants in nearby Kentucky. Blue Oval City will sprawl across six square miles, making it not only Ford’s largest-ever assembly operation but also its first all-new plant in the U.S. in nearly three decades.
In many ways, it will resemble the original Ford manufacturing “city” along Detroit’s Rouge River where Farley’s grandfather worked a century ago. And, as the Rouge complex did back then, “Blue Oval City will usher in a new golden age” for the automaker, Farley said.
The Ford CEO has been directly responsible not only for the $11.4 billion project announced this week but also, more broadly, Ford’s increasingly aggressive push into electrification. TheDetroitBureau.com had the opportunity to talk with Farley after an appearance in Memphis about the project and its broader implications.
Electrification efforts
TheDetroitBureau: When you were named CEO, Ford’s electrification plans were still modest but they now seem to be expanding rapidly. What is changing?
Farley: There are problems to solve but there is good news in this transition to electrification that everyone was really apprehensive about.
TDB: One of the concerns has been the possible decline in employment since EVs are simpler to assemble.
Farley: If you insource the batteries (ed: as Ford will do with two new battery plants in Kentucky), you can grow the employment base, even though the vehicle assembly process is more efficient and requires less labor.
TDB: Speaking of workers, it appears the United Auto Workers Union won’t automatically get the right to represent employees in either Tennessee and Kentucky, both right to work states. Instead, they will vote to decide on representation. Could these become non-union plants?
Farley: We have a great working relationship with the UAW. The governor (of Tennessee Bill Lee) said it’s the workers’ choice and we’ll honor that. But we’re really optimistic about our relationship with the UAW. If it falls that way we’ll be really excited.
Big sales expectations
TDB: In May you upped your forecast for how much of Ford’s sales will come from battery-electric vehicles to 40% by 2030. Yet all the recent announcements, like Blue Oval City and the doubling of the size of the F-150 Lightning plant in Detroit, suggest you may be aiming even higher, doesn’t it?
Farley: It certainly looks that way. In Europe, they had the diesel scandal and (it) turned on a dime and (governments) got behind it and within a year the industry went from 2% to 12% (EV market share). It will probably go faster (in the U.S.). The demand for the F-150 Lightning is far beyond what we expected.
TDB: Shall we assume you’re already working on other all-electric plants even if they won’t be as big as Blue Oval City?
Farley: Let’s put it this way: the batteries in this announcement come to 129 gigawatts and that’s a million vehicles per year of batteries. And we already have the plant in Georgia which is about 12 GWh. So, when you look at one assembly plant (like Blue Oval City), it’s not going to make 1 million vehicles. So, yes, we have a lot to do.
TDB: How flexible is the plant at Blue Oval City? It will use a new truck-style skateboard platform (dubbed the TE), and it would seem you could build additional products there using that platform.
Farley: Well, most people don’t realize that the platform going into this vehicle is a ground-up battery platform different from that in the (first-generation) Lightning. That makes sense for Ford. We make a million F-Series today from Super Duty to Raptor, regular cabs to (crew cabs) for commercial and retail customers. We’re going to have an incredible new line-up of vehicles, something that people cannot imagine today.
TDB: Why were the sites in Tennessee and Kentucky chosen, rather than, say Michigan or other northern locations?
Farley: These sites are very rare in the United States and the Tennessee political leadership and the economic development team had the vision to secure this site, and get access to 6,000 people to work here. And they are (helping to) train the workers. It’s logistically attractive to us in the center of the country, and this is the right place from an environmental standpoint (with electricity from the Tennessee Valley Authority and solar), and geothermal. We’re going to be zero net carbon. That was really important for us. All of these factors went into choosing this site.
