Trump Admin Warns Ford on China; Stock Falls
Trump Admin Warns Ford on China; Stock Falls
The News
Transportation Secretary Sean Duffy has warned Ford Motor that its business partnerships with Chinese companies raise "profound concern" for American national security, in a letter to Ford CEO Jim Farley that the Department of Transportation made public on Tuesday.
Duffy singled out Ford's use of licensed battery technology from Chinese manufacturer CATL, its joint venture with Geely in Spain, and its talks with BYD over hybrid vehicle components.
Ford's stock fell 4.2 percent on Tuesday, according to Al Jazeera.
What Duffy Objects To
The letter said DOT was "deeply alarmed" by Ford's reliance on licensed CATL technology at its plant in Marshall, Michigan, Reuters reported. Just the News identified the site as Ford's BlueOval Battery Park, where the company produces lithium iron phosphate battery cells.
Duffy wrote that the Geely joint venture in Spain "helps strategic adversaries secure a vital foothold in Western markets," and that the BYD discussions "could lead to further embedding subsidized foreign technology into Ford's core supply chains."
He also faulted Ford's timetable for moving Lincoln Nautilus production out of China, saying the 2030 target "leaves an unacceptable, multi-year window of reliance on Chinese manufacturing."
Timeline
Ford announces its licensing agreement to use CATL battery technology, including the production of lithium iron phosphate batteries, CNBC reported. The deal has drawn renewed attention amid US–China tensions and Ford's plan to use the technology for energy storage systems.
CATL is among the companies placed on the Defense Department's list of banned Chinese military companies, according to Al Jazeera, which noted the listing came before President Trump took office.
Duffy signs and sends the letter to Farley. Al Jazeera and Just the News both report it went out late in the prior week.
The letter is published and reported by Reuters, CNBC and others. Ford shares close down 4.2 percent. Ford issues a response defending its Michigan battery operation.
Reactions
"While DOT recognizes the intense competitive pressures of the global market, the Company's recent strategic decisions paint a troubling picture of a foundational American brand actively intertwining its future with Chinese state-backed enterprises," the letter read, according to CNBC.
"When a company intentionally chooses to deepen operational dependencies on strategic competitors, it fails to act as the reliable partner the American public and this DOT require," Duffy wrote, in a passage quoted by both Just the News and Al Jazeera. He added that "iconic American companies, like Ford, are also expected to out-innovate competitors" and "need to chart clear paths to technological self-reliance."
Ford pushed back on the characterization of its Michigan plant. In comments reported by NOTUS and relayed by AlterNet, the company said its Michigan battery hub is owned and operated by Ford and cannot be classified as a foreign-owned manufacturing operation. Ford added that it "supports the administration's vision for advancing American innovation and manufacturing" and said that "had Secretary Duffy reached out before issuing his letter to the press, we would have been happy to share more details about Ford's U.S. commitment."
Ford did not immediately respond to requests for comment from Reuters, CNBC or Al Jazeera.
What's Next
The sources describe a warning letter, not a penalty: none of them report a fine, an investigation or a formal order against Ford.
Ford's stated plan remains to move Lincoln Nautilus production from China to the United States by 2030 — the timeline Duffy called unacceptable, leaving open whether the company accelerates it.
Also unresolved are Ford's talks with BYD over hybrid vehicle components, which DOT says could deepen its exposure to subsidized Chinese technology.
More
The clash lands in the middle of a broader trade fight between Washington and Beijing, which Al Jazeera cited as the backdrop for the letter.
It also produced an immediate factual dispute. AlterNet, citing NOTUS reporting, wrote that Duffy highlighted Ford's dependence on CATL technology and that Ford responded by pointing out the battery hub in question sits in Michigan and is run by Ford — a rebuttal aimed at the suggestion that the operation is foreign-owned.
Poll
Should Ford cut its business ties with Chinese companies?
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