Michigan – Ford is facing criticism from American politicians again. This time, two leaders of U.S. House committees have asked the government to investigate four Chinese companies working on Ford’s new battery plant in Michigan.
Representatives Mike Gallagher and Cathy McMorris Rodgers, who lead committees on China and Energy respectively, pointed out these companies are involved in designing, building, and handling tech aspects of the plant.
Ford denies lawmakers’ claims
Ford responded by stating it always follows the rules set by governments and makes sure its suppliers do too. Ford also mentioned it demands its suppliers to uphold high standards, including the protection of human rights, and expects them to hold their own suppliers to these standards as well.
The news agency Reuters mentioned that the names of these four companies were not disclosed because the committees had access to confidential information from Ford and couldn’t share the companies’ names publicly.
The issue raises more worries about China’s role in the American electric vehicle (EV) market. The 2024 update to the Inflation Reduction Act has even removed some electric vehicles, like the Mustang Mach-E, from getting a $7,500 tax break. This change aims to encourage car manufacturers to use fewer Chinese parts and boost investment in U.S. production.
In another move, lawmakers have written to the Treasury and State Departments asking for an investigation into whether one of the Chinese firms providing IT services for the Michigan battery plant might be dodging sanctions. The letter claims that Ford is using “the same cloud integration and data provider that is linked to North Korean Ministry of Foreign Affairs sanctions evasion activity,” calling this “indefensible.”
Treasury responded by reaffirming its commitment to fighting North Korea’s “illicit revenue generation activities, from the use of overseas laborers to money laundering and cyber espionage.” Meanwhile, Ford said that the battery plant is “wholly owned and operated” by the automaker.
Ford had initially planned to invest $3.5 billion in the Michigan plant but later reduced the investment to about $2 billion. The plant aims to make lithium-iron-phosphate (LFP) batteries, which should help make electric vehicles cheaper, perform better, and last longer.
In November, the committee also questioned the fairness of U.S. tariffs on Chinese goods, noting that Europe is taking steps to limit the number of electric vehicles coming from China. Meanwhile, China has criticized President Biden’s restrictions on its batteries, arguing that these actions violate global trade regulations.
Safety concerns and espionage
Ex-CIA Director and Defense Secretary Leon Panetta warned Congress that a planned electric vehicle battery factory in Michigan might be exploited by China for spying purposes.
Speaking at a hearing by the House Select Committee on the Chinese Communist Party, which was examining the CCP’s backing of America’s foes, Panetta confirmed to Rep. John Moolenaar, a Republican from Michigan, that the facility, being set up by a branch of the Hefei, China-originated company Gotion High-Tech, could potentially be used for espionage activities.
“I don’t think there’s any question that they’re going to take advantage of that situation,” Panetta said as reported by Fox News. “And I think we have to be very vigilant about what the hell is going on. That’s just the way they operate. They’ll establish a manufacturing unit, they’ll establish whatever they can, and then they will use that for their own intelligence purposes. They will use that for their own economic purposes.”
“They’ll use it to be able to gain the kind of advantages that are counter, frankly, to the interests of the United States,” he continued. “I think it is very important in those situations to make sure that the United States, and that our intelligence capabilities, are being used to make sure that we know what they are doing that could hurt the United States.”
Mike Pompeo against Michigan plant construction
Alongside Panetta, Mike Pompeo, who has served as both CIA Director and Secretary of State, also gave testimony at the hearing. He argued that the plant in Michigan poses a threat to national security and should not be constructed.
“I think it is worse than the fact that they will engage in espionage. I think that’s just top of the list,” Pompeo told the panel. “They will use this in ways that will leverage Chinese advantage. These plants are deeply dangerous to our national security and ought not be built.”