During a press briefing on Friday, Ford CEO Jim Farley revealed that negotiations with the United Auto Workers (UAW) union have been halted due to disagreements over future electric vehicle battery plants. Farley stated that while a compromise on pay and benefits could have been reached, the UAW is currently holding the deal hostage over the issue of battery plants. This announcement came after the UAW declared the expansion of strikes to two additional assembly plants, one belonging to Ford and the other to General Motors.

Farley criticized the union for its targeted strike strategy, suggesting that the actions were premeditated and implying that the UAW had no intention of reaching an agreement before the September 14 deadline. The construction of multibillion-dollar EV battery plants and the employment opportunities they provide are of utmost importance to the automotive industry’s future. Additionally, these plants can have significant implications for the UAW, automakers, and President Joe Biden’s objective of promoting domestic manufacturing.

Even though the battery plants may not be directly discussed in the national agreement, current and former union leaders have emphasized their significance for the long-term viability of the UAW. However, these plants are considered a “wild card” issue in the ongoing contract negotiations as many of them are joint venture facilities that cannot be legally included in the talks.

Ford has already announced four future battery plants, including three joint ventures and a wholly owned subsidiary utilizing battery technology licensed from Chinese auto supplier CATL. However, construction on one of these plants in Marshall, Michigan, has been paused due to the union negotiations, according to Farley. He stated that the size of the Marshall plant could be adjusted depending on the outcome of the negotiations.

General Motors is currently the only Detroit automaker with a joint venture battery plant that is operational and unionized. This makes it the first company in the country to face this unique negotiating dynamic, and its plant will likely set standards for the industry.