Tennessee General Assembly poised to vote on $884M incentive package for Ford project

Jordyn Grzelewski
The Detroit News

The Tennessee General Assembly is poised to vote on an incentive package now totaling roughly $884 million for a $5.6 billion Ford Motor Co. electric-vehicle and battery manufacturing campus in the state.

The state legislature's possible approval Wednesday of an incentive package initially pegged at about $500 million comes as anti-union sentiments that political experts and observers have predicted will hover over the project are beginning to swirl.

Ford Executive Chairman Bill Ford, left, Tennessee Gov. Bill Lee and Ford CEO Jim Farley at the end of the event announcing the building of Blue Oval City in West Tennessee, September 28, 2021.

On Tuesday, as two pieces of legislation tied to the project wound their way through state House and Senate committees, the National Right to Work Committee released an open letter calling on Tennessee Gov. Bill Lee, a Republican, to "ensure" that any state incentives offered to Ford and its joint-venture partner SK Innovation "do not subsidize coercive unionism that undermines the worker freedom that Tennessee's Right to Work law stands for."

In response, the United Auto Workers referred The Detroit News to previous statements union leaders have made about the Ford project. UAW officials have signaled their support for the new jobs but have said it's too early to discuss organizing workers at plants that do not yet exist.

"The UAW has always taken a lead in manufacturing innovation with our employer partners," UAW President Ray Curry said in a statement following Ford's announcement last month of the projects. "We look forward to reaching out and helping develop this new workforce to build these world class vehicles and battery components.” 

Specifically, Mark Mix, president of the National Right to Work Committee, called for a guarantee that workers wishing to organize a union at the Ford-SK facilities will have to go through an election conducted by the National Labor Relations Board.

"If Ford’s new project receives incentives from Tennessee taxpayers, it must be on the condition that there are no collusive deals between Ford and UAW bosses that undermine workers’ freedom to reject union membership, and that any unionization drive at the plant will be through an NLRB-supervised secret ballot election," he wrote.

Ford executives have said it will be up to workers to determine if they wish to organize a union. Still, automotive, political and labor experts have said the UAW could face significant hurdles to organizing the new facilities, given widespread anti-union sentiments in the South, the UAW's past failures to organize workers there and the damaged credibility from a years-long federal investigation into union corruption.

And although Tuesday's committee hearings largely focused on other questions around details of the two bills (except for a hearing during the Ford-focused special session that delved into pandemic-related policies), at least one Republican state legislator has sought to bring labor issues to the forefront of discussions around the project.

State Rep. Robin Smith — who hails from the Chattanooga area, where union drives at a Volkswagen AG plant have been a hot-button issue in the Volunteer State — last week penned a letter to Lee asking questions about Ford's relationship with the UAW.

In a Facebook post Tuesday, Smith — a sponsor of an amendment that would enshrine the state's right-to-work law in its Constitution — wrote that "the protections of workers allowing them to choose to join a union or not are important to me" and said that Tennesseans are "excited to welcome" Ford to the state, "if the practices that have so dramatically impacted Detroit are left there and the policies and practices of Tennessee, that have proven successful and effective for employees, employers and our families are embraced."

Meanwhile, the topic of unions was raised at one point during a House committee hearing Tuesday. State Rep. Chris Todd, R-Madison County, asked state economic development officials for "assurance" that non-union contractors and subcontractors would have "equal access" to the project.

In response, Bob Rolfe, commissioner of the Tennessee Department of Economic and Community Development, said that the state "dictating certain requirements ... would likely be a deal-killer for this project."

"This company is from Detroit," he added. "One of the reasons they looked away from Detroit was for just this reason, and that is that there were not a lot of requirements."

Still, he said, "What I’m hearing you say is, the General Assembly would be uncomfortable if Ford were to show up and to insist on only engaging subcontractors that have union representation. I can assure you that’s not been a part of any conversation that we’ve had.”

The two bills introduced by Lee on Monday, and now under consideration by the state legislature, are House Bills 8001 and 8002. The first piece of legislation would provide for oversight, via a regional development authority, of the West Tennessee megasite on which the Ford-SK project is slated to be built. The second relates to appropriations for the incentive package.

“Tennessee’s investment in the Megasite will have a generational impact on all 95 counties and cement our place as the national leader in automotive manufacturing,” Lee said in a statement. “This special session will give Tennesseans a look into the funding process, and I thank the General Assembly for their swift action.”

The proposed incentives for the project include $500 million in direct grants, as well as additional funding for workforce development and infrastructure initiatives. Lee, for example, has proposed a $40 million investment by the state to build, own and operate a Tennessee College of Applied Technology location on the site. The state also has taken on the responsibility for building and operating water and wastewater systems for the site, and plans to build a second interchange on Interstate 40 near the campus.

Numerous questions were raised Tuesday about what recourse the state would have if Ford and SK failed to follow through on their employment and investment plans. Concerns also were expressed about how much power the board overseeing the megasite would have, and whether local communities will have a say in decision-making related to the site.

State economic development officials said that under an accountability agreement, Ford and SK within 10 years will have to deliver at least 90% of the approximately 5,800 jobs they've said will be created to staff Blue Oval City, a 3,600-acre campus containing an electric truck plant, battery manufacturing operations and a supplier park. Otherwise, the companies would be subject to penalties.


Twitter: @JGrzelewski