Kentucky is renegotiating a lucrative incentive package with BlueOval SK.
Now that the partnership between Ford and South Korea’s SK On is dissolved, the EV battery plant in Glendale will close and eliminate its workforce of 1,600. A Ford subsidiary will repurpose the plant into an energy storage business.
Ford and SK On received a $250 million loan upfront from Kentucky taxpayers to build the EV battery park. Part of the agreement in order to have the loan forgiven called on the companies to hit employment targets by 2026.
On Thursday, Gov. Andy Beshear said the state has the ability to claw back taxpayers funds, but actions are on hold as Ford develops a long-term plan for the Hardin County manufacturing site.
"There’s security in the agreement with these companies," Beshear said during his weekly Team Kentucky briefing. "The state could recoup those dollars, but where we are is in a negotiation because the project changed, for what’s fair, and we haven’t worked through all of that.”
BlueOval SK projected 2,500 jobs at the first plant while Ford says the new energy storage venture will produce 2,100 positions. There’s a second plant that’s not in operation yet to consider in the renegotiation, as well.
BlueOval SK also invested $2 billion more than the $5.8 billion that was originally incentivized.
Under the BlueOval SK deal, Kentucky offered subsidies upfront rather than doling out the incentives over a long period of time as the state has done with other large corporations. The immediate capitol is more attractive in economic development deals, but riskier for the state.
The BlueOval SK project called for the creation of 2,500 jobs by the end of 2026 with average hourly pay of $26.41. The target grew to 5,000 jobs and average compensation of $30.04 per hour by 2031.
Failure to meet the targets could have forced Ford and SK On to repay the partial or full balance of the loan.
The last time Kentucky offered an upfront loan for an economic development project was in 2017 when it invested $15 million in Braidy Industries. The startup failed to build an aluminum rolling mill near Ashland, but the state eventually recouped the funds.
The much larger $250 million loan to BlueOval SK was approved in 2021 during a special session of the Republican-dominated General Assembly.
The incentive package also included millions of dollars in Hardin County land transferred to BlueOval SK at no cost, as well as the establishment of a workforce training center at Elizabethtown Community and Technical College.
