OP-ED: Economic development investment pays off with $5.8 billion project and 5,000 new jobs

SB 5 economic development investment pays off with $5.8 billion project and 5,000 new jobs
By State Representative Chris Freeland

After two decades of efforts to lure a major manufacturer to an undeveloped parcel of land just off of I-65 in Hardin County, we now know that the site will soon become home to the nation’s largest producer of electric automotive batteries. Ford Motor Company and SK Innovation have agreed to invest $5.8 billion to build two electric battery plants on the 1,551 acre mega-site. According to the companies, production of advance lithium-ion batteries will begin in 2025 and the plants will employ more than 5,000 workers. Eventually, Kentucky workers will supply Ford’s North American assembly plants with batteries that will power the next generation of Ford and Lincoln electric vehicles.

Ford has been a proven partner in Kentucky’s economy since building the company’s first Kentucky plant here in 1913. SK Innovation (SKI) is an energy company based in South Korea that is already a strong competitor in the electric vehicle battery market. This project is a major win for our entire Commonwealth because it places Kentucky at the forefront of the automotive industry’s future. Ford alone expects at least 40 percent of its global sales to be electric vehicles by 2030, and the batteries made in Kentucky will play a big role in that transition. Economic development experts believe the plant has the potential to provide the same long-term boost that Toyota Motor Manufacturing sparked when it located in Georgetown in the 1980s.

The deal became possible after we approved SB 5, legislation that provided $410 million for state economic development officials to use as incentives for projects like this. The legislation appropriates $350 million from the state's rainy day fund to provide forgivable loans that must be spread out over time to ensure that approved projects deliver on job promises. Ford is expected to apply for $250 million in loans, leaving $100 million on the table for other potential projects. I was supportive of this measure because we also have the ability to claw back the funds if the jobs do not materialize or wages are not what we are promised. These incentives are necessary for our state to compete for projects of this magnitude, consider that Kentucky pledged more than $147 million to help Toyota build an $800 million auto plant. However, like every other allocation we make we must make sure that the investment pays off for taxpayers.

Now that Ford and SK Innovation have committed to the Hardin County project, the focus will shift to preparing the regional workforce and surrounding communities for this massive addition. That includes workforce training. In addition to the $250 million in forgivable loans, SB 5 also included a $50 million commitment for training grants and programs. Ford and SK Innovation anticipates they will apply for $36 million of the $50 million to help transition the current workforce to the jobs they will be offering. Accountability plays a role in this funding as companies generally partner with both the Economic Development Cabinet and the Education and Workforce Development Cabinet.

This deal will place Kentucky at the forefront of the automotive industry’s future and result in spinoff growth as suppliers and other companies locate to serve the plant’s needs. Make no mistake, there will be growing pains. However, with more than 13,000 Kentuckians already working for Ford, the additional 5,000 jobs will have a historic impact on our state. Their decision to expand their presence as part of their relationship with SK Innovation is proof that the policies crafted by the legislature over the past four years are working. Instead of increasing taxes, the legislature broadening the tax base and lowering tax rates; cut unnecessary bureaucracy; and allowed hardworking Kentuckians to keep more of the money they earned. We were already seeing results when the pandemic began. In fact, the month before the first case of COVID-19 was diagnosed we had the lowest unemployment rate in state history, while state revenue was on track to break previous records. We know that state government cannot tax itself into prosperity – that will only take money out of people’s pockets. As your State Representative, I want to make sure Kentucky is the kind of place where you can build a business, raise a family, and enjoy a long and healthy life. The Ford and SK Innovation announcement is great news, but our work is far from done. We want to keep growing our economy and make gains in every community. We just have to keep fighting for policies that help recruit and retain jobs.

I hope you will not hesitate to reach out to me to share your thoughts on the issues coming before us in Frankfort. As always, I can be reached at home anytime or through the toll-free message line in Frankfort at 1-800-372-7181. You can also contact me via e-mail at Chris.Freeland@lrc.ky.gov. You can also keep track of interim committee meetings and prefiled legislation through the Kentucky Legislature Home Page at www.legislature.ky.gov.


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