GM CEO Mary Barra will always be remembered for her stylish leather jackets. Don’t anyone dare suggest that’s a sexist comment. Fortune, which for years has been celebrating the most powerful women in business, credited Barra for making leather jackets the power suit of choice for American female executives.
Barra’s soft leather jackets give her the appearance of having a certain warmth, but lurking underneath them is a woman you don’t want to meet in the dark Beltway corridors of power. One obviously develops a ruthless grit becoming the biggest automotive manufacturer in Mexico.
Ford CEO Jim Farley and his high-powered lobbyists have learned this lesson the hard way.
The Wall Street Journal had a blockbuster exclusive today about what prompted Ford to pause construction of a $3.5 billion lithium battery plant on fertile Michigan farmland Gov. Gretchen Whitmer destroyed for the project. UAW president Shawn Fain flattered himself and believed Ford’s decision was in response to his demands that battery plant workers be paid competitive wages. Fain called the move “a shameful, barely veiled threat” by Ford to cut jobs before they were created.
“We are simply asking for a just transition to electric vehicles, and Ford is instead doubling down on their race to the bottom.” Fain said.
It turns out what prompted Ford’s decision was uncertainty about whether it could get away with its controversial scheme to partner with a communist China-based battery manufacturer and still have its electric vehicles qualify for lucrative tax breaks under the Inflation Reduction Act (IRA) that President Biden championed, and Congress passed, a year ago last month. Given that the legislation was passed to facilitate Biden’s aggressive EV mandates, it would be reasonable to expect that all the i’s were dotted, and t’s were crossed, months ago. Underscoring the mind-boggling incompetence of those overseeing America’s EV transition, they haven’t.
The Journal reported some automakers are holding off on investing in their EV supply chains until they see what Chinese materials or technology are allowed under the final rules of the tax credit. America is decades behind China with regards to EVs and automakers haven’t yet finalized their EV chains because the Biden Administration hasn’t yet given them clear direction.
The Journal reported that Farley in June went to Washington and pitched members of Congress on Ford’s plans to build its lithium-battery plant in rural Marshall, MI, for which Whitmer had already committed $1.7 billion in tax breaks. The Congressional members were no doubt wowed by Farley’s inimitable charm.
But later that day, Barra met with Congressional leaders and warned that Ford’s plans would ultimately result in China’s domination of U.S. automotive manufacturing. The Journal said that GM executives have told the Biden administration that if consumers could use the IRA tax credit to buy cars that Ford made with Chinese battery technology, GM would be at a competitive disadvantage and would be forced to strike its own deals with Chinese firms. That would undercut Washington’s goal of making the U.S. automotive industry less dependent on China.
Barra has cultivated relationships at the highest levels of U.S. government – the Oval Office to be precise.
Politico reported that Barra has a close relationship with Biden, having visited the White House eight times since Biden was elected president. Barra’s relationship is fortified with some additional nuclear firepower: Jeff Ricchetti, whose brother Steve Ricchetti is a counselor to Biden, currently lobbies for General Motors. GM has paid Jeff Richetti’s firm more than $500,000 since the start of 2021. Steve Ricchetti also lobbied for General Motors between 2001 and 2008, a few years before he became counselor to then-Vice President Biden, and later his chief of staff. Both brothers lobbied the Senate for GM while Biden was a senator from Delaware.
Missy Owens, Biden’s niece, joined GM in February 2022 and serves as director of global sustainability. According to the Detroit News, Owens’ boss is GM Vice President David Strickland, an Obama administration alum who ran the National Highway Traffic Safety Administration.
Barra and Jeff Zients, Biden’s chief-of-staff, spoke to each other on a call earlier this month along with other White House officials, Politico reported.
Barra also has some influential Republicans independently abetting her cause.
The Detroit News reported today that three Republican U.S. House committee chairs again have demanded that Ford turn over documents related to its licensing agreement with Contemporary Amperex Technology, Ford’s China-based partner for its Michigan battery plant. The lawmakers, Reps. Jason Smith of Missouri, Cathy McMorris Rodgers of Washington, and Mike Gallagher of Wisconsin, warned that if Ford failed to comply with their documents request, they would require CEO Farley to appear before Congress “to publicly explain your failure to comply.”
Smith, McMorris, and Gallagher respectively lead the House Ways and Means Committee, Energy and Commerce Committee, and the Select Committee on the Chinese Communist Party.
“We are concerned that Ford has not been fully transparent with our requests for documents and information,” Smith, Gallagher and McMorris Rodgers wrote in a letter dated Tuesday.
In July, Gallagher and Smith claimed they had documents showing that hundreds of jobs at the Michigan plant would go to CATL employees and alleged CATL has connections to forced labor in China.
The lawmakers said they received details of the licensing agreement that shows “several hundred” of the 2,500 jobs in the Marshall plant will be given to CATL employees from China who will set up and maintain the equipment, and that Ford will keep CATL employees working in the plant until around 2038. A Ford spokeswoman told the News that CATL employees are not included in the 2,500 jobs the Michigan battery plant supposedly will create.
There’s good reason not to believe anything Ford and its spokespersons say. Ford is peddling a message that it is a “uniquely American company” and variations of that theme. “We’re Ford, and we’re all-in on America,” Chris Smith, Ford’s chief government affairs officer, told the Wall Street Journal.
That’s simply not true. Ford has been steadily moving its manufacturing to Mexico, as well as critical engineering functions. The company proudly builds its electric Mustang in Mexico, as well as its Maverick pickup. It’s no surprise that Ford would tell flat out lies; the company last year agreed to a $19.2 million multistate settlement for making deceptive advertising claims.
That Ford would diss Congressional lawmakers also isn’t a surprise. James Butler, one of America’s leading product liability attorneys who last year secured a $1.4 billion jury judgment against Ford for allegedly selling Super Duty pickup trucks with roofs the company knew wouldn’t withstand rollover crashes, told me: “Ford is unique and singular in the extent to which they exhibit disdain for the law, for courts, and for jurors.”
The mainstream media emphasizes that it is Republican lawmakers who are concerned about Ford getting into bed with a communist China-based company, which in the media’s mind means their national security concerns are unfounded. The Wall Street Journal recently reported that Chinese nationals, sometimes posing as tourists, have accessed military bases and other sensitive sites in the U.S. as many as 100 times in recent years, according to U.S. officials, who described the incidents as a potential espionage threat.
Ford’s Marshall site is about 30 miles from a Michigan National Guard training base.
Derailing construction of Ford’s battery plant could give Barra’s faltering EV ambitions a much-needed edge. GM already has a battery plant in Ohio up and running, and the company hopes to open a second battery plant in Tennessee next year and one in Lansing, MI, in 2025.
But getting battery plants to operate efficiently takes considerable time. Problems at GM’s Ohio battery plant have caused Barra to miss her promised 2023 EV targets, possibly by a wider margin than is known.
Although not widely reported, GM plans to close its electric van manufacturing plant in southwestern Ontario until next spring because of a battery supply shortage.
The Journal’s scoop today laid bare just how over their heads Joe Biden, Energy Secretary Jennifer Granholm, and Transportation Secretary Pete Buttigieg are overseeing America’s transition to EVs. They’ve bungled the buildout of a national charging network, and they are doling out billions of taxpayer dollars for EV projects without understanding the implications.
In Kansas, the utility supporting a Panasonic battery plant receiving $6.8 billion under IRA, recently disclosed that it must continue to burn coal and delay plans to transition to natural gas to meet the battery plant’s energy needs.
Cyrus West, a Republican Wyoming state representative who holds a master’s degree in environmental science from Harvard, told a local newspaper that renewables are a great source of “auxiliary supplemental power,” but without a solid base load to ensure a reliable energy supply, they don’t work. These are realities that some still don’t want to accept.
“This (Biden) administration wants to put lipstick on a pig, but it’s still a pig,” West said.