Ford, SK Innovation to announce EV battery JV

[Harley Lover]

More details are supposed to be coming from a call or press conference this morning (Thursday May 20). This is a very big deal for Ford from a strategic perspective - all of us need to pay attention to the details (hard to do as we fill up on F150 Lightning details):

The automaker has repeatedly stepped up efforts around batteries, with CEO Jim Farley stating several times the automaker was looking at making its own batteries. Last month, after Ford reported quarterly results, he said things have changed as the automaker has boosted its EV volumes.

"We've totally entered a different zone ... so we've already made the decision to vertically integrate the company," he said on a conference call with analysts.

"We're now building motors, e-axles now, we've been writing our own battery management software for quite some time, and now it's time for us to lock in on the latest technology and to have a secure cell production relationship."

Ford has scheduled "an update on Ford batteries" for Thursday at 9 a.m. ET.

Hopefully they spill the beans with details about their plans.

https://www.autonews.com/automakers-suppliers/ford-sk-innovation-announce-ev-battery-jv-report-says?utm_source=daily&utm_medium=email&utm_campaign=20210519&utm_content=hero-headline

[Gurgeh]

I hope that whatever production facility they build and whatever SK partnership deal they strike, they make sure it can converted over to Solid Power's solid state battery tech when it becomes available in a few years.

[ZanatWork]

I hope that they're not strictly married to lithium batteries, as some tech nerds hereabouts keep talking about graphene having enormous potential.

[silvrsvt]

https://www.autonews.com/automakers-suppliers/ford-sk-innovation-announce-ev-battery-joint-venture-na

 

 

[rperez817]

Official press release from Ford. JV is named BlueOvalSK. Ford Commits to Manufacturing Batteries, to Form New Joint Venture with SK Innovation to Scale NA Battery Deliveries | Ford Media Center

[Harley Lover]

2 hours ago, silvrsvt said:

https://www.autonews.com/automakers-suppliers/ford-sk-innovation-announce-ev-battery-joint-venture-na

 

From this link:

The plan is for the partnership to produce about 60 gigawatt-hours annually in traction battery cells and array modules, starting mid-decade, with potential to expand, the companies said.

That target would equal two jointly owned plants, the locations for which have not been identified, Ford North American COO Lisa Drake said on a call with reporters.

Ford's global EV plan calls for at least 240 GWh of battery cell capacity by 2030, equal to about 10 plants, said Ford's chief product platform and operations officer, Hau Thai-Tang. Some 140 GWh of that will be required in North America, with the balance in other regions, including Europe and China.

[FordBuyer]

I see a big union fight coming. Joint ventures usually mean no union and lower wages in right to work states like SC. The UAW is already on this as batteries replace engines. Ford should build their own batteries with UAW workers in Ford plants. Forget the Koreans. 

[akirby]

20 minutes ago, FordBuyer said:

 Ford should build their own batteries with UAW workers in Ford plants. 

Then the UAW needs to agree to competitive compensation.  You can’t pay workers double the market rate and be competitive.

[twintornados]

10 minutes ago, akirby said:

Then the UAW needs to agree to competitive compensation.  You can’t pay workers double the market rate and be competitive.

 

Why should a UAW worker be forced to take a pay cut when instead you should be fighting to bring that "market rate" up rather than driving down wages.

[Harley Lover]

38 minutes ago, FordBuyer said:

I see a big union fight coming. Joint ventures usually mean no union and lower wages in right to work states like SC. The UAW is already on this as batteries replace engines. Ford should build their own batteries with UAW workers in Ford plants. Forget the Koreans. 

 

Please name an OEM on planet earth that is building its own batteries. Even Tesla had to JV. The legacy OEM's don't have the in house knowledge to go it alone. Get real.

[rperez817]

26 minutes ago, akirby said:

Then the UAW needs to agree to competitive compensation.  

 

They have. If the employee compensation in the most recent UAW contract with Ford wasn't competitive, it would not have been ratified.

 

The UAW workers at Ford's Rawsonville and Van Dyke facilities are as well suited to building EV components as any other workforce in the world.

[akirby]

21 minutes ago, rperez817 said:

 

They have. If the employee compensation in the most recent UAW contract with Ford wasn't competitive, it would not have been ratified.

 

The UAW workers at Ford's Rawsonville and Van Dyke facilities are as well suited to building EV components as any other workforce in the world.

 

They have for vehicle assembly workers but battery production is a different industry with different competitors and potentially different market rates.  Could be higher or lower.  I'm just saying they need to be market competitive whatever that happens to be.

[akirby]

44 minutes ago, twintornados said:

 

Why should a UAW worker be forced to take a pay cut when instead you should be fighting to bring that "market rate" up rather than driving down wages.

 

Because you can't compete with other companies in an open market if you're paying significantly more than they are for the same work.  Market compensation isn't arbitrary - it's driven by supply and demand.  If battery factories require specialized or unique skills then those jobs will be worth more.   If it's basic factory assembly work then they are worth less.   If GM is paying $25/hr and Ford is paying $40/hr then GM will either make a bigger profit and show better results or they'll cut prices to the point they still make money but Ford loses money.   It's just not feasible if Ford has a choice.

 

The only reason the UAW got away with much higher than market wages is that it was a closed market where the UAW controlled 90%+ of all the vehicles sold in the US.  So all the automakers had the same overhead.   But when non UAW built vehicles entered the equation that no longer worked, and the UAW understood that.

[akirby]

52 minutes ago, twintornados said:

 

Why should a UAW worker be forced to take a pay cut when instead you should be fighting to bring that "market rate" up rather than driving down wages.

 

Also, these aren't necessarily current UAW workers.  It depends on where they decide to build them.  And it's not necessarily a "pay cut".  Competitive just means on par with the competition - that could be higher than current UAW wages.

[twintornados]

5 minutes ago, akirby said:

 

Because you can't compete with other companies in an open market if you're paying significantly more than they are for the same work.  Market compensation isn't arbitrary - it's driven by supply and demand.  If battery factories require specialized or unique skills then those jobs will be worth more.   If it's basic factory assembly work then they are worth less.   If GM is paying $25/hr and Ford is paying $40/hr then GM will either make a bigger profit and show better results or they'll cut prices to the point they still make money but Ford loses money.   It's just not feasible if Ford has a choice.

 

The only reason the UAW got away with much higher than market wages is that it was a closed market where the UAW controlled 90%+ of all the vehicles sold in the US.  So all the automakers had the same overhead.   But when non UAW built vehicles entered the equation that no longer worked, and the UAW understood that.

 

I stand by my statement that they should not allow wage cuts just to support "investor value" ....if Ford is paying $40 an hour, then so should GM. (and Stellantis, BMW, Tesla, Nissan, Toyota, etc, etc, etc.)

[rperez817]

Can anyone confirm (or deny) that BlueOvalSK will build batteries at SK Innovation's existing plant in Georgia?

[mackinaw]

11 minutes ago, rperez817 said:

Can anyone confirm (or deny) that BlueOvalSK will build batteries at SK Innovation's existing plant in Georgia?

 

From the Detroit Free Press (so it could be wrong):

 

'The companies say they have signed a memorandum of understanding, but details on the ownership structure and factory locations have yet to be worked out."

 

https://www.freep.com/story/money/cars/ford/2021/05/20/ford-build-electric-vehicle-battery-plants-sk-innovation/5183271001/

[Harley Lover]

16 minutes ago, rperez817 said:

Can anyone confirm (or deny) that BlueOvalSK will build batteries at SK Innovation's existing plant in Georgia?

 

Presumably BlueOvalSK is a separate company from SK, so unless it buys into the Georgia plant, the answer is most likely no. Don't forget that SK plant will also be supplying the VW plant in Chattanooga.

[silvrsvt]

So I’m guessing the JV name is why somethings had to change around here. 

[akirby]

4 hours ago, twintornados said:

 

I stand by my statement that they should not allow wage cuts just to support "investor value" ....if Ford is paying $40 an hour, then so should GM. (and Stellantis, BMW, Tesla, Nissan, Toyota, etc, etc, etc.)

All I said was wages have to be market competitive.  That doesn’t necessarily mean a wage cut.  
 

If Ford is paying $40/hr and everyone else is paying $30 then Ford is at a competitive disadvantage.

[blazerdude20]

5 hours ago, akirby said:

 

They have for vehicle assembly workers but battery production is a different industry with different competitors and potentially different market rates.  Could be higher or lower.  I'm just saying they need to be market competitive whatever that happens to be.

Exactly. In my industry it’s very common to have employees from the same company working on the same project that have different skill sets and are represented by different unions. The pay scales and benefits are different. No one complains. 

[slemke]

5 hours ago, silvrsvt said:

So I’m guessing the JV name is why somethings had to change around here. 

Can you share additional details?

[twintornados]

8 hours ago, akirby said:

All I said was wages have to be market competitive.  That doesn’t necessarily mean a wage cut.  
 

If Ford is paying $40/hr and everyone else is paying $30 then Ford is at a competitive disadvantage.

 

The only question I would have is why aren't the workers making $40 an hour like they do at Ford? We are never going to agree on this one, akirby...you see it as an equalizer down trending and I see it as an opportunity to up trend.

[silvrsvt]

8 hours ago, slemke said:

Can you share additional details?

Not to mention the name of the forum is very similar to the JV name and people might confuse it down the road.

[FordBuyer]

The UAW knows that building BEVs means fewer workers needed and will fight like hell to keep battery plants UAW. They are already on edge about this and will be sticking point in next contract. Fortunately, they are more pissed off at GM than Ford about BEVs.