Lawmakers Challenge Ford and Chinese Battery Partner Over Forced Labor

Ford Motor Co.’s partnership with a major Chinese battery maker faces intense scrutiny from Republican lawmakers, which could lead the U.S. automaker to turn to companies linked to forced labor in China’s Xinjiang Uighur Autonomous Region. claims.

The chairmen of the House Select Committee on the Communist Party of China and the House Ways and Means Committee, in a letter sent to Ford on Thursday, said Ford plans to hire hundreds of workers from China. requested more information about China at a new battery plant in Michigan.

In February, Ford announced plans to build a $3.5 billion factory using technology from Contemporary Amperex Technology, known as CATL, the world’s largest electric vehicle battery maker. CATL produces approximately one-third of the world’s electric vehicle batteries, supplying them to General Motors, Volkswagen, BMW, Tesla and other major automakers.

Ford defended the deal, saying it would diversify Ford’s supply chain and, for the first time, make batteries cheaper and more durable than current alternatives in the U.S. instead of importing them.

But lawmakers who had previously criticized the partnership cited evidence that CATL had not relinquished ownership of the companies it helped set up in Xinjiang, the seat of the United Nations. identified Systematic human rights violations.

CATL sold its stake in Xinjiang Shimura Lithium Industry Co. to the public in March after the deal with Ford was announced. However, the shares were purchased by an investment partnership in which CATL owns a portion of the shares, Former CATL Manager He holds leadership roles in other companies owned by the battery maker, according to company records.

The circumstances of the sale raise “serious questions about whether CATL is trying to cover up its links to forced labor,” said Rep. Mike Gallagher of Wisconsin, chair of the selection committee, and the Ways Commissioner. Rep. Jason Smith of Missouri, chairman of the council, wrote: .

Lawmakers also criticized Ford’s efforts to hire hundreds of Chinese workers, citing details of Ford’s licensing agreement being submitted to the selection committee. Chinese workers will install and maintain CATL equipment at the Michigan plant until about 2038, lawmakers said. Ford says the plant will employ 2,500 American workers.

“Ford claims the deal will create thousands of jobs in the United States, further strengthen Ford’s ‘commitment to sustainability and human rights,’ and lead to advances in battery technology in the United States.” they are writing “However, the newly discovered information raises serious questions about each claim.”

Ford spokesman TR Reed said the company is reviewing the letter and will respond in good faith. He said human rights are fundamental to Ford’s business operations and the automaker thoroughly evaluates such issues.

“So many wrong things have been said and implied about this project,” Reid said. “In the end, investing billions of new dollars in the United States and creating 2,500 high-income jobs in the United States for better technology to bring to better electric vehicles is, overall, a good thing. thinking about.”

CATL’s partnership with Ford could usher in the electric vehicle industry in the United States. Critics called the agreement ” “Trojan Horse” For the benefit of China, and called abandon the partnership. If successful, reliance on Chinese technology could become the norm for the U.S. electric vehicle industry, they say.

Eric Gordon, an assistant clinical professor at the University of Michigan’s Ross School of Business, said China’s control over key technologies such as batteries could ultimately leave the United States in a “much weaker position.” .

“Profits go to the innovators who provide the advanced technology, not the people who have the drivers to assemble the advanced technology,” he said.

But CATL and other Chinese companies have battery technology that is not readily available from US or European suppliers. The Michigan plant will be the first plant in the United States to produce so-called LFP batteries, which use lithium, iron and phosphate as the main active materials.

These are heavier than the lithium, nickel, and manganese batteries currently used by Ford and other automakers, but are cheaper to manufacture, more durable, and can be recharged many times without degrading. It also does not use other battery materials such as nickel and cobalt. Nickel and cobalt are often mined using environmentally harmful methods, sometimes with child labor.

Without the most advanced or cheapest batteries, U.S. automakers could fall behind Chinese rivals such as BYD, which has expanded into markets outside of Europe and China. Also, Americans may have to pay more for electric cars and electric trucks, which would slow sales of greenhouse-free cars.

The battery, which CATL announced last year, provides hundreds of miles of range after just 10 minutes of charging.

“The hard truth is that the Chinese have made a big bet on electric vehicles, pumping more than $1 trillion in subsidies into the industry, but it just so happens that all of those bets turned out to be ace,” said China. Expert Scott Kennedy said. Center for Strategic and International Studies.

“By deciding not to partner with the mega-battery makers, you are effectively committing to slowing the U.S. energy transition,” he added.

Ford plans to use batteries made with CATL technology in low-end versions of vehicles such as the Mustang Mach E and F-150 Lightning pickup. The cheapest version of Tesla’s Model 3 sedan has an LFP battery, widely reportedly supplied by CATL.

For decades, Western companies have monopolized the world’s most advanced technology, seeking access to the Chinese market while protecting their intellectual property.

But China’s dominance in the production of solar panels and wind turbines, as well as electric vehicle batteries, has reversed the dynamics. This creates a particularly difficult dilemma for the Biden administration and other Democrats. While they want to reduce their dependence on China, they also argue that the US needs to move quickly to cleaner energy sources to mitigate climate change.

The exposure of the photovoltaic and electric vehicle battery industries to Xinjiang further complicates the situation. The Biden administration has accused the Chinese government of implementing hardline policies. Genocide and Crimes Against Humanity regional.

Last year, the United States banned imports of all or some products manufactured in Xinjiang, arguing that companies operating in Xinjiang could not guarantee that their facilities were free of forced labor.

2022, CATL and Partners Registered lithium processing company In the region, there was a company called Xinjiang Shimura Lithium Industry Co., Ltd., which was pursuing plans to become the world’s largest producer of lithium carbonate, a key component in batteries.

Xinjiang’s lithium company, through a series of subsidiaries and shareholder relationships, has sold to China’s power utility Tebian Electric Apparatus Stock Company, according to records examined by The New York Times through its corporate ownership mapping tool Sayari Graph. (TBEA) and financial relationship. . TBEA is participated extensively In the so-called poverty alleviation and labor transfer program in Xinjiang, US considers A form of forced labor.

The Chinese government claims its labor transfer and poverty alleviation programs are aimed at improving living standards in the region, but human rights experts say they are also aimed at pacifying and indoctrination of the population. Uyghurs and other minorities say they cannot say no to this. These programs can be implemented without fear of detention or punishment.

CATL did not respond to a request for comment. In December, the company told The Times that it has a minority stake in a Xinjiang company and strictly prohibits any form of forced labor in its supply chain.

Republicans also raised concerns about whether batteries made at Ford’s Michigan plant would qualify for tax credits the Biden administration would offer to consumers who purchased electric vehicles as part of the anti-inflation bill. expressed.

The law prohibits “foreign entities of concern,” such as companies from China, Russia, Iran and North Korea, from benefiting from government tax credits. But because Ford licenses the CATL technology to the plant rather than forming typical joint ventures with automakers and battery suppliers, batteries made in Michigan are still eligible for these incentives. may become.

The Biden administration has yet to clarify exactly how the restrictions on foreign corporations will apply. But Ford officials said they are in talks with the government about a Michigan plant and are confident the partnership will have all the benefits of the law.

“Batteries manufactured by American workers in U.S. factories operated by wholly-owned subsidiaries of U.S. companies are covered, and we believe they should be,” Ford spokesman Reed said.

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