MEMPHIS, Tennessee — Ford Motor Co. and a South Korean company are expected to create more than 5,000 full-time jobs at a planned electric pickup truck plant and battery manufacturing plant in Tennessee or pay back at least part of a $500 million state grant. for the project, according to a lease approved Thursday by a regional board.
The Megasite Authority of West Tennessee’s board of directors voted to approve the lease during a meeting to discuss the $5.6 billion project to build F-Series electric pickups and batteries on a parcel of land. of 3,600 acres of land in rural Stanton, northeast of Memphis.
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and Tennessee Governor Bill Lee announced the project in September. A joint venture called BlueOvalSK will also build twin battery plants in Glendale, Kentucky, for an estimated investment of $5.8 billion. The projects are expected to create around 10,800 jobs and move the automaker’s future manufacturing footprint south while emphasizing green energy.
Construction at the Tennessee site, named BlueOval City, is expected to begin later this year. Ford said it plans to start production by 2025.
“The approval of the site lease for BlueOval City is another important step in moving the project forward,” Ford said in a statement.
In October, Tennessee lawmakers pledged to spend nearly $900 million on state incentives, infrastructure upgrades and more as part of a sweeping plan with Ford. The deal included $500 million in capital grant funds.
The council-approved lease essentially grants the land to Ford until December 2051. Rent is $1 for the duration of the lease.
Under the terms of the lease, an accountability agreement requires the creation of 90% of the 5,760 jobs committed under the $500 million grant, according to details presented at the meeting by attorney Chris Bowles.
If fewer than 5,184 jobs are created within 10 years, Ford and SK will have to repay part of the subsidy plus $175 million, which represents the value of the land, according to the presentation of the lease.
“We thought, ‘What protections does the state have if … either the joint venture or Ford defaults? “Said Bowles, adding:” This is not what we expect.
The deal only includes full-time workers at the plant, not the estimated 30,000 jobs tied to building the facility.
Bob Rolfe, Tennessee’s Economic Development Commissioner, noted ELUX.B from Swedish home appliance maker Electrolux,
decision in 2019 to close its Memphis plant after receiving a major incentive package.
The state’s 2010 agreement with Electrolux did not include clawback provisions to recoup $100 million in state incentives if employment thresholds were not met. Electrolux then agreed to pay local taxes on the factory.
“Basically, Electrolux took $100 million from the state and a lot of money from the city and the county, and then woke up in sixth grade and said…we’re going to close the plant and we own everything, and there were no repercussions,” Rolfe said.
Rolfe added that Ford’s refund provisions are “almost the opposite” of the Electrolux agreement.
“There’s a huge amount of venture capital here,” Rolfe said.
Prior to landing the Ford project, Tennessee had invested more than $174 million in the Memphis megasite, but was struggling to attract the big tenant it wanted.
With an economy based largely on agriculture, Haywood County saw its population decline 4.9% to 17,864 people from 2010 to 2020, one of 14 counties to lose population as Tennessee rose overall by 8.9%, according to census data.
The meeting took place in Brownsville and was broadcast live on the Internet.