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El Paso farmland won’t become Ford plant; Memphis & Louisville sites picked

UPDATE, Sept. 27: El Paso is out of the running for a Ford plant that would assemble electric-vehicle batteries.

Ford and a partner company announced late Monday that its two new factories will be built by 2025 on sites in Kentucky and Tennessee. They will make batteries for the next generation of Ford and Lincoln electric vehicles that will be produced in North America.

Just four months ago, Ford had said it planned to build two new battery plants in the U.S. in a joint venture called BlueOvalSK. As ABC-7 reported last month, Texas was among a handful of states under consideration for one of the facilities - and El Paso leaders had pitched 1,000-acres of city-owned farmland in northeast El Paso as a site for the plant.

The two plants will create an estimated 10,800 jobs that will likely pay solid wages. Most of the new jobs will be full time, with a relatively small percentage having temporary status to fill in for vacations and absent workers.

Together with its battery partner, SK Innovation of South Korea, Ford says it will spend $5.6 billion in rural Stanton, Tennessee, near Memphis, to build one of the battery plants - while it will invest $5.8 billion to build the other plant in Glendale, Kentucky, near Louisville.

Combined, they mark the single largest manufacturing investment the 118-year-old company has ever made and are among the largest factory outlays in the world; the battery plants will be able to supply enough batteries to power 1 million vehicles per year.

In an interview Monday evening with the Associated Press, CEO Jim Farley said Ford picked the Kentucky and Tennessee sites in part because of lower electricity costs, as well being less exposed to flooding and hurricanes than other states. Battery factories use five times the electricity of a typical assembly plant to make cells and assemble them into packs, so energy costs were a big factor, Farley said.

The company also needed huge tracts of land for the plants that weren’t available in other states, Farley added, noting that the two southern states had skilled labor forces and were willing to commit to training workers for the new jobs.

“These jobs are very different than the jobs we’ve had in the past,” Farley explained. “We want to work with states who are really excited about doing that training and giving you access to that low energy cost.”

Tennessee Gov. Bill Lee told the Associated Press that his sate offered Ford $500 million in incentives to beat out 15 other states contending to land one of the new factories. He said the site offered for the plant was six square miles that the state had been trying to develop for years without success. In addition, the Tennessee Valley Authority, which serves the Memphis-area site, sells industrial electricity at a price that’s lower than 93% of competitors nationwide.

Kentucky Gov. Andy Beshear said his state legislature recently approved $410 million worth of economic development incentives to lure the battery operation to his state. He also said the 5,000 new jobs to be created by Ford in Kentucky marks the largest single employment announcement in the state's history.

(The Associated Press contributed to this report.)

ORIGINAL REPORT, Aug. 26: EL PASO, Texas -- You might call it El Paso's field of dreams.

The City Plan Commission is considering rezoning over 1,000 acres of city-owned agricultural land in northeast El Paso to allow for heavy manufacturing.

It's part of a plan to try and lure a new automotive production facility to El Paso that could bring with it hundreds of good-paying jobs, economic development sources told ABC-7.

Texas is among a handful of states being looked at by a joint venture recently formed by Ford Motor Co. to build two factories to make batteries for roughly 600,000 electric vehicles per year by the middle of this decade, auto industry sources told ABC-7, and El Paso believes it can put together an attractive deal to land one of those facilities.

The Ford venture with battery maker SK Innovation of Korea, called BlueOvalSK, comes as Ford anticipates that battery-electric vehicles will account for 40% to 50% of its U.S. sales by 2030.

Ford spokespeople declined to speculate on potential plant sites, telling ABC-7 that the joint venture was in its early stages and no announcements were imminent. They referred ABC-7 to public statements previously made by the automaker when the venture was announced earlier this year.

New auto factories are rare and among the most coveted economic development projects because they can create thousands of jobs between the factory itself as well as suppliers and contractors. An economic development analyst, with knowledge of the scope of such a project, told ABC-7 it could have a multi-billion dollar annual economic impact for El Paso if it came to fruition.

The El Paso land that would serve as the proposed site for the plant is near Stan Roberts Drive and east of U.S. 54, which is up for rezoning from farm to industrial use. The city's planning commission met Thursday afternoon to consider it, but members on the panel postponed taking action for two weeks.

An auto industry insider told ABC-7 that among Ford's key considerations in evaluating sites would be geography and transportation access. That's where those familiar with El Paso's pitch believe plans in the works by the Texas Department of Transportation to build a four-lane highway, referred to as the Borderland Expressway, could prove very enticing in getting a deal done.

The expressway would complete a bypass route around the northeast side of El Paso suitable for truck and other through traffic from Interstate 10; an economic development source indicated the state would commit to ensuring whatever access would be needed to connect a manufacturing facility with the bypass.

El Paso leaders believe last year's decision by Amazon to build a distribution facility on the far east side that will employ up to 750 people has enhanced the city's attractiveness to other major corporations looking to make capital investments in new facilities. The city had highlighted its strategic location and transportation links in luring Amazon here.

Tom Fullerton, an economist at the University of Texas-El Paso, cited the Borderland's available workforce as another competitive advantage when it came to securing Amazon and he believes it could be enticing to the automotive industry too.

"El Paso is one of the regions within the United States that still has a young labor force that is attracted to industrial activities," he said.

Article Topic Follows: Biz/Tech

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Jim Parker

Jim Parker is the former Director of Digital Content for ABC-7.

JC Navarrete

El Paso native JC Navarrete co-anchors ABC-7’s weekend newscasts and reports during the week.


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