Ford plans biggest new manufacturing investment ever in Tennessee

In the biggest single business investment in Tennessee history, Ford Motor Co. plans to build its first totally new assembly plant in more than a half century northeast of Memphis to make electric-powered pickup trucks.

Ford and Korean battery maker SK Innovation announced Monday they will build a $5.6 billion "Blue Oval City" in Stanton, Tennessee to build a battery plant and assembly facility for the next generation of all-electric F-series trucks. The automotive companies plan a similar $5.8 billion joint venture to build twin battery plants in central Kentucky as part of what Ford officials said will be the largest new manufacturing investment in Ford's 118-year history that is key to the company's shift from gas-powered to battery-powered vehicles in the future.

"Just as Henry Ford made a bold investment a century ago to build the Ford Rouge plant (in Dearborn, Michigan), today we are making a similar bold move that will usher in a whole new century of mobility that is both sustainable and affordable," said Lisa Drake, chief operating officer for Ford in North America. "We're building an entirely new manufacturing eco-system that we call "Blue Oval City" just outside of Memphis that will be one of the largest and most advanced facilities of its kind in North America."

Ford will be the fourth major auto manufacturer to locate an electric vehicle assembly operation in Tennessee since Nissan began making its all-electric Leaf in Smyrna in 2012 and has emerged as one of the biggest EV production sites in North America.

Tennessee is already the top state in the Southeast and the third biggest in the country for electric vehicle production, and the Volunteer State could emerge as a top state for the growing battery-powered transportation industry.

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GM is spending $2 billion to begin making the Cadillac Lyriq, a small electric SUV, at the Spring Hill factory, in addition to a $2.3 billion joint venture that GM and LG Energy announced last fall to produce batteries at the GM Spring Hill complex. In Chattanooga, Volkswagen of America is investing $800 million to add a battery-powered small SUV to its lineup of cars made at its Chattanooga assembly plant.

Ford expects to employ 5,700 employees at its new West Tennessee plant and start producing battery-powered pickups, including its new Ford 150 Lightning, at the Tennessee site by 2025. During the construction of the new facility, 33,000 people will be employed, including 15,600 direct jobs and another 17,200 indirect and "induced." jobs, according to state officials. Bob Rolfe, the commissioner of economic and community development for Tennessee, said that will generate $1.87 billion in payroll for Tennessee workers.

"It's hard to put into words just how much this means for Tennessee," Tennessee Gov. Bill Lee said. "This will have a generational impact on people and families across our state."

The state is asking the General Assembly for a $500 million capital grant for Ford Motor Co. and SK Innovation to develop the project. Tennessee competed with some 15 states to land the record-high Ford investment.

"It was clear along the way that our commitment to career technical education, our commitment to workforce development put us ahead of any other competitor for this very important partnership," Lee said.

The governor said he will call legislators into a special session in the next several weeks to approve the aid package and other aspects of the deal. Lee and his administration have been working with fellow Republicans Lt. Gov. Randy McNally, the Senate speaker, and House Speaker Cameron Sexton.

Blue Oval City Location: West Memphis Megasite in Stanton, Tennessee in Haywood County west of Memphis Size: 3,600-acre site, or the equivalent of 6 square miles, off of Interstate 40 Developers: Ford Motor Co. and SK Innovation, a South Korean-based battery maker What will be built: Ford will build an assembly plant for its battery-powered F-Series pickup trucks, including its new Ford 150 Lightning Electric Truck, and SK Innovation will erect a 43-gigawatt battery production plant. Investment: $5.6 billion, the largest single business investment ever in Tennessee Jobs: 5,700 with initial vehicle production expected in 2025 Related development: Two more battery production plants valued at $5.8 billion in Glendale, Kentucky and job training programs in Texas. Ford already has begun production of electric-powered pickup trucks at its River Rouge plant in Dearborn, Michigan Source: Ford Motor Co.

Ford picked the West Memphis megasite for its newest factory, which is the first totally new assembly plant to be built entirely for Ford since 1969. Drake said the project is part of $30 billion that Ford expects to spend by 2030 to make at least 40% of its fleet battery-powered.

"This is a transformative moment where Ford will lead America's transition to electric vehicles and usher in a new era of clean, carbon-neutral manufacturing," Ford Executive Chair Bill Ford said. "With this investment and a spirit of innovation, we can achieve goals once thought mutually exclusive — protect our planet, build great electric vehicles Americans will love and contribute to our nation's prosperity."

Ford plans to erect the new factory at the Memphis Regional Megasite in Haywood County, just 30 miles outside of Memphis along Interstate 40. The new plant will expand the battery-powered pickup production Ford is now undertaking at Ford's Rouge plant in Dearborn which is in the process of adding 450 jobs to keep up with the demand for the Ford 150 Lightning, according to John Savona, Ford's vice president of manufacturing and labor affairs.

The state of Tennessee bought the West Tennessee property for the megasite in 2003 and has spent more than $174 million over the past decade to develop the 4,100-acre site. Although the site has not attracted major investment so far, Gov. Bill Lee set aside another $52 million in the current state budget to make the massive industrial area more marketable. The money will be spent on developing wastewater and water infrastructure and will complement further upgrades in rural broadband being made across the state.

"West Tennessee is primed to deliver the workforce and quality of life needed to create the next great success story," Tennessee Gov. Bill Lee said. "This is a watershed moment for Tennesseeans as we lead the future of the automotive industry and advanced manufacturing."

The megasite was one of several that were developed with the support of the Tennessee Valley Authority, including the Enterprise South industrial park that helped attract Volkswagen to Chattanooga in 2009 and the Huntsville megasite that landed the Toyota/Mazda joint venture in 2015.

TVA President Jeff Lyash said Monday that TVA has helped lure electric vehicle manufacturers to its 7-state region wtih low-cost, reliable electricity with less carbon-intensity than most utilities. Through its Green Invest program that taps into more solar and wind generation, TVA offers the prospect of carbon-free electricity to industries seeking carbon neutrality.

Charging up Tennessee’s economy Electric vehicle manufacturing and production of the batteries to power such cars and trucks are pumping more than $10 billion of new investment in the state including: * $5.6 billion vehicle assembly plant and battery production facility to be built by Ford and SK Innovation at the Blue Oval City in Haywood County, making all-electric F-series pickup trucks including the Ford 150 Lightning. * $2.3 billion battery plant in Spring Hill by Ultium Cells LLC, a partnership between General Motors and LG Energy * $2 billion expansion by GM in Spring Hill to make fully electric vehicles, including the Cadillac LYRIQ * $800 million expansion by Volkswagen of America in Chattanooga to produce the all-electric ID.4 sport utility vehicle. * $1 billion recently invested by Denso in Maryville where it produces electric vehicle parts. Source: Tennessee Department of Economic and Community Development

Lyash said TVA is currently talking with Ford about ways to achieve its carbon reduction targets, which include being completely carbon neutral by 2050.

"We're a provider of some of the lowest cost and most reliable energy for industrial customers in the country and we have one of the lowest carbon intensities in our generation of any major utility," Lyash said.

Ford's announcement of its plans to make battery-powered pickups in Tennessee comes seven months after TVA joined with the Tennessee Department of Environment and Conservation to build a network of recharging stations at least every 50 miles on Tennessee's major highways to help ensure adequate charging capacity for the growing number of electric vehicles o the road.

The new charging stations will support the effort by Drive Electric Tennessee to have at least 200,000 light-duty electric vehicles in Tennessee by 2028. At the end of last year, there were only 11,034 light-duty EVs registered in Tennessee, but that number is projected to jump with new electric vehicles soon to be produced by most of the major automakers around the globe.

Contact Dave Flessner at [email protected] or at 423-757-6340.

Contact Andy Sher at [email protected] or 615-255-0550. Follow him on Twitter @AndySher1.