Ford Halts Work on E.V. Battery Plant in Michigan

Ford Motor, in the midst of tense contract negotiations with striking United Automobile Workers, said on Monday that it was suspending construction of a battery factory in Michigan because of concerns that the plant might not be able to make products at a competitive price.

It was unclear whether the halt was related to negotiations with the union, or to other issues. Ford has come under attack from Republican lawmakers because it plans to manufacture batteries at the plant in Marshall, Mich., using technology licensed from CATL, a Chinese company that is the world’s largest maker of batteries for electric cars.

At the same time, Ford has warned that increases in pay and benefits sought by the U.A.W. would undermine its efforts to ramp up manufacturing of electric vehicles.

If unions got all that they were asking for, “we would have to cancel our E.V. investments,” Jim Farley, Ford’s chief executive, said in an interview this month.

T.R. Reid, a Ford spokesman, said on Monday that the company was “pausing work and limiting spending on construction on the Marshall project until we’re confident about our ability to competitively operate the plant.”

Mr. Reid declined to provide further details on the reason for the decision, which it announced a day before President Biden is scheduled to visit Michigan to join picket lines with the U.A.W.

Workers at a Ford factory in Wayne, Mich., have been on strike for more than a week. But the union, which has been negotiating separately with the three Detroit automakers, has credited Ford with doing more than General Motors or Stellantis, the maker of Jeep and Ram vehicles, to meet the union’s demands. Those include a 40 percent increase in pay, a shorter workweek, protection against inflation and other benefits.

Last week, the U.A.W. expanded its strikes against G.M. and Stellantis to include parts distribution centers, but spared Ford.

The plan for the Marshall factory was to produce batteries whose main ingredients are lithium, iron and phosphate. The technology is an alternative to batteries made from lithium, nickel and cobalt, which raise environmental and human rights concerns. Lithium-iron-phosphate batteries, or LFP, are heavier than batteries made with nickel and cobalt but cost less.

LFP batteries are not currently mass produced in the United States. Automakers, including Tesla, sell cars with LFP batteries imported from China. Ford has argued that making the batteries in the United States with Chinese technology is better than importing them.

The Biden administration is formulating rules that could prevent U.S. companies from working with some Chinese firms. Uncertainty about the regulatory climate is probably a factor in Ford’s decision to halt work on the plant, but the company could also be trying to put pressure on the union.

Ford had said it would invest $3.5 billion to build the factory and employ 2,500 people when production begins in 2026.