The Ford Motor Company's new partnership to produce electric car batteries is drawing a sharp rebuke from some in Congress, noting that the deal with Communist China's brutal government includes the use of slave labor and the leverage it gives Beijing over the U.S. economy.
“In February, Ford announced a partnership with Chinese Communist Party-aligned battery company, Contemporary Amperex Technology, Co. Limited (CATL), raising serious concerns,” the U.S. House Ways and Means Committee reports.
That drew a sharp response from Committee leaders.
“In a letter to Ford Motor Company CEO Jim Farley, Chairman Mike Gallagher (R-WI) of the Select Committee on the Chinese Communist Party and Chairman Jason Smith of the Committee on Ways and Means reveal new information about the licensing agreement, CATL's ties to forced labor, and Ford's future reliance on Chinese technology, minerals, and employees,” the Committee announced in a statement.
“We are investigating the recently announced partnership between Ford Motor Company (Ford) and Contemporary Amperex Technology, Co. Limited (CATL). Ford has argued that the deal will create thousands of American jobs, further Ford's ‘commitments to sustainability and human rights,' and lead to American battery technology advancements,” Gallagher and Smith write.
“But newly discovered information raises serious questions about each claim. Specifically, information regarding the proposed partnership agreement between Ford and CATL suggests that a significant portion of these well-paying jobs will be given to citizens of the People's Republic of China (PRC)—not Americans,” the lawmakers add.
The leaders point out that it appears Ford's partner in the deal is taking steps to cover up the potential use of slave labor to make Ford's batteries.
“(P)ublic financial disclosures and PRC media reporting suggest that shortly following the announcement of the partnership between Ford and CATL, CATL took steps to maintain effective control while appearing to divest its ownership stake in companies based in the Xinjiang Uyghur Autonomous Region (Xinjiang) that allegedly are connected to forced labor practices. This raises concerns about the troubling connection between CATL, the Chinese Communist Party (CCP), and forced labor in Xinjiang,” they reveal.
They reveal, in detail:
Further, CATL's ongoing relationship with a lithium mining company implicated in forced labor calls into question Ford's commitment to responsible supply chains. The timeline of a divestment made by CATL and CATL's deal with Ford, in combination with the fact that entities closely connected with CATL appear to have maintained ownership and control post-divestment, raises serious questions about whether CATL is attempting to obscure links to forced labor. Shortly following the February announcement of the Ford and CATL licensing agreement, CATL quietly divested a 23.6% ownership stake in
Xinjiang Zhicun Lithium (Xinjiang Lithium). Within 48 hours, however, a majority stake (61.2%) of Xinjiang Lithium was purchased by a limited partnership (LP) managed by a former senior manager of CATL—Guan Chaoyu—with the financial support of CATL and one of its wholly-owned subsidiaries. Indeed, CATL provided over one-third of the initial investment in the LP. During his time at CATL, Guan oversaw the company's battery production, research and development, and supply chains. Publicly available information indicates that he remains heavily involved in other CATL subsidiaries and serves as director of at least two companies in which CATL has majority ownership.
Xinjiang Lithium—which aims to become the largest lithium carbonate producer in the world—is tied through wholly-owned subsidiaries and other relationships to companies that engage in state-sponsored labor transfer programs in the Xinjiang region. This includes a relationship with TBEA Co and its subsidiaries. The laborers in these programs are in many cases “transferred directly from camps to factories” and “subjected to constant surveillance.”
This apparent obfuscation of a continued link between CATL and Xinjiang Lithium raises serious ethical and legal concerns. According to the U.S. Department of State, Treasury, and Commerce, “businesses and individuals that do not exit supply chains, ventures, and/or investments connected to Xinjiang could run a high risk of violating U.S. law,” like the Uyghur Forced Labor Prevention Act. In light of evidence regarding CATL's continuing relationships with Xinjiang-based lithium producers, the proposed partnership with CATL suggests that Ford is not exiting supply chains, ventures, and/or investments connected to Xinjiang.
The lawmakers requested, by August 10, 2023, the following documents and communications as:
A copy of the licensing agreement between Ford and CATL—including all appendices— in both English and Chinese;
All documents and communications exchanged between Ford and CATL referring or relating to the licensing agreement in the original language, i.e. not in translation; and
All documents and communications between Ford and the Biden Administration referring or relating to the Ford/CATL licensing agreement and/or achievable tax credits.
They also asked, by August 10, for answers and information on the following:
How many PRC nationals will be employed by BlueOval Battery Park Michigan? Under what visa class will these workers be entering the United States? What is their expected length of stay per visit and how many visas are expected to be requested for PRC nationals?
We understand that a Ford wholly-owned subsidiary will be responsible for sourcing precursor cathode active materials and cathode active materials for the BlueOval Battery Park Michigan.
Will CATL or its subsidiaries be the primary source of precursor cathode active materials and cathode active materials? What percentage of those materials will be sourced from the PRC?
Does Ford expect CATL to import any other components from the PRC to produce LFP batteries in Michigan? Please provide the expected quantity of imports from the PRC and identify any components for which the PRC is expected to be the sole source of supply.
To what extent will Ford's wholly-owned subsidiary source iron phosphate derived from byproducts of titanium dioxide production using a sulfate process? What percentage of iron phosphate will be sourced from the PRC?
What measures does Ford have in place to ensure CATL remains a sound commercial partner, considering the company's founder and chairman is principally focused on national rejuvenation and advancement of the CCP's automotive priorities?
With the recent updates to the PRC Counter-Espionage Law, raids of foreign audit and due diligence companies, and new limits on PRC supply chain due diligence, how will Ford ensure imports from CATL to produce LFP batteries in Michigan are free of forced labor or inputs from Xinjiang?
The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.
10%…as always.