Ford Motor Company is facing growing scrutiny over how it balances American manufacturing with international technology partnerships. A recent exchange between U.S. Transportation Secretary Sean Duffy and Ford CEO Jim Farley has brought that issue into sharper focus. Duffy questioned Ford’s commercial relationships with Chinese companies, including battery manufacturer CATL and automakers Geely and BYD. The concerns center on whether these partnerships could increase reliance on foreign technology and supply chains. For Ford, however, the company argues that its approach allows advanced technology to be used by American workers inside American-owned facilities.
The dispute highlights a much larger challenge facing the automotive industry. Automakers need access to competitive battery technology and global expertise while governments increasingly want critical manufacturing and supply chains located domestically. Ford says its investments demonstrate a strong commitment to U.S. production, employment, and industrial communities. The company points specifically to its Marshall, Michigan battery facility, its American workforce, and its plans to eventually move Lincoln Nautilus production from China to the United States.
1. Transportation Department Questions Ford’s Chinese Partnerships
The U.S. Department of Transportation has questioned Ford’s strategic direction because of its relationships with several major Chinese companies. Secretary Sean Duffy raised concerns about Ford’s ties to CATL, Geely, and BYD, arguing that partnerships involving Chinese technology could create greater exposure within important automotive supply chains. The department’s questions reflect wider government concerns about maintaining independent American manufacturing capabilities as the automotive industry becomes increasingly dependent on advanced battery and electronic technologies.
Key Supply Chain Concerns:
- CATL battery technology relationship
- Geely European manufacturing partnership
- BYD component discussions
- Foreign technology supply exposure
- American manufacturing independence concerns
The government’s position focuses on more than individual business agreements. Officials are examining whether international licensing and technology arrangements could conflict with broader economic and national security objectives. As automakers compete to develop electric and hybrid vehicles, access to competitive technology has become increasingly important. The Ford dispute therefore illustrates the difficult balance between using global expertise and reducing dependence on strategic competitors.
2. Ford’s Michigan Battery Plant Becomes a Major Focus
One of the most important issues involves Ford’s battery facility in Marshall, Michigan. The plant produces lithium-iron-phosphate battery cells using technology licensed from CATL. Federal officials have questioned the use of Chinese technical expertise at a facility intended to strengthen domestic battery production. The Department of Defense had previously placed CATL on a banned list in January 2025, adding further sensitivity to the relationship. Officials have also examined Ford’s plans to use the battery technology for energy storage systems.
Marshall Plant Highlights:
- Located in Michigan
- Produces LFP battery cells
- Uses licensed CATL technology
- Supports domestic battery production
- Includes energy storage applications
Ford strongly disputes the characterization of the facility as a foreign-controlled operation. The company says the agreement with CATL is limited to technology licensing and services rather than a joint venture or foreign-owned manufacturing operation. Ford states that it owns the plant, controls its operations, and employs the workforce. The project is expected to create 1,700 new American jobs, giving Ford a major point in its defense of the investment.
3. Ford Defends Its Domestic Manufacturing Commitment
Ford responded forcefully to the Transportation Department’s criticism, arguing that the company has done more for American manufacturing than virtually any other automaker. The company emphasized that it is increasing its focus on the United States while other automakers and foreign-based competitors continue importing vehicles from markets such as Japan, Mexico, and Korea. Ford presented its domestic manufacturing footprint as evidence that it remains deeply committed to American workers and production.
Ford’s Manufacturing Position:
- Strong domestic production footprint
- American-owned manufacturing facilities
- Large hourly workforce
- Significant vehicle exports
- Continued U.S. investment
The company also argued that using licensed technology does not undermine American manufacturing when the actual production takes place domestically. Ford’s position is that American workers can use foreign-developed technical knowledge to build advanced products inside U.S. facilities rather than having completed vehicles or components imported from overseas. This distinction sits at the heart of Ford’s defense and reflects the increasingly international nature of modern automotive technology.
4. Ford’s Relationship With CATL Is Limited, the Company Says
Ford has specifically emphasized that its CATL agreement should not be viewed as a traditional foreign partnership. The automaker describes it as a limited technology-licensing and services agreement. Ford maintains complete ownership of the Marshall facility and says it controls the operation while employing the workers there. This structure, according to the company, allows Ford to obtain battery expertise without transferring ownership of the American manufacturing operation to a Chinese company.
CATL Agreement Details:
- Limited technology licensing
- Services agreement included
- Ford owns the plant
- Ford controls operations
- 1,700 American jobs
Ford also stated that the White House had praised the project and suggested that some details in the Transportation Department’s correspondence were factually incorrect. The automaker said it supports the administration’s vision for American innovation and manufacturing. Ford further indicated that it would have been willing to provide additional information had the department contacted the company before making its concerns public.
5. Geely and BYD Partnerships Draw Additional Scrutiny
Federal concerns extend beyond CATL and Ford’s Michigan battery operation. Secretary Duffy also questioned Ford’s joint venture with Geely in Spain. The facility is reportedly involved in assembling vehicles for Geely for the European market while also participating in joint development work on an SUV for overseas buyers. Duffy argued that such activity could give a strategic competitor a stronger foothold in Western markets.
International Partnership Concerns:
- Geely partnership in Spain
- European vehicle assembly
- Joint SUV development
- BYD component discussions
- Foreign technology integration
The department also highlighted discussions between Ford and BYD involving hybrid vehicle components. Officials warned that these discussions could increase the use of subsidized foreign technology within Ford’s supply chains. These concerns demonstrate how closely governments are now examining automakers’ international relationships, particularly when Chinese companies are involved in batteries, components, software, or vehicle development.
6. Lincoln Nautilus Production Creates Another Manufacturing Debate
The Lincoln Nautilus has become another important part of the discussion. Ford previously announced that it plans to move production of the luxury SUV from China to the United States by 2030. Secretary Duffy criticized the timeline because it leaves several years of continued dependence on Chinese manufacturing. The second-generation Nautilus is currently produced by Changan Ford in China, making its eventual return to U.S. production an important part of Ford’s broader manufacturing strategy.
Nautilus Production Details:
- Lincoln luxury crossover SUV
- Current production in China
- U.S. shift planned by 2030
- Long transition period
- Major manufacturing policy issue
Ford’s planned production shift demonstrates that the company is already working to bring more vehicle manufacturing into the United States. However, the disagreement shows that policymakers may want these changes to happen faster. Ford has to manage the practical challenges of factory planning, investment, production capacity, and supply chains while also responding to government expectations for greater domestic manufacturing.
7. Ford’s Sales Results Add More Pressure
The manufacturing dispute comes while Ford is dealing with mixed U.S. sales results. In August, Ford delivered 170,681 vehicles in the United States, representing a 10.3 percent year-over-year decline. The F-Series remained comparatively resilient, with 67,504 units sold, down only 1.2 percent. Electric vehicle deliveries, however, fell sharply by 79.4 percent to 2,197 units, meaning EVs represented only about 1.3 percent of Ford’s total August U.S. sales.
August Sales Highlights:
- 170,681 total Ford sales
- Sales down 10.3 percent
- 67,504 F-Series deliveries
- EV sales down 79.4%
- 2,197 EV units delivered
These numbers provide additional context for Ford’s manufacturing decisions. Traditional trucks continue to attract strong customer demand, while electric vehicle sales face more immediate challenges. The contrast shows why Ford must carefully balance investment in future technologies with the products currently generating substantial sales volume. Battery manufacturing investments remain strategically important, but the company is also dependent on strong performance from conventional vehicles.
8. The Ford Dispute Reflects Wider U.S.-China Technology Tensions
Ford’s supply-chain debate is part of a much wider geopolitical relationship between Washington and Beijing. Federal agencies are increasingly focused on protecting domestic technology and reducing potential exposure to Chinese companies in strategically important industries. The same broader environment includes continuing legal proceedings involving Huawei and government concerns surrounding several Chinese artificial intelligence companies.
Broader Technology Tensions:
- Growing U.S.-China competition
- Critical technology concerns
- Artificial intelligence scrutiny
- Supply chain security
- Domestic innovation protection
These developments create a complicated environment for automakers. Battery technology, electric vehicle components, software, and energy systems are becoming increasingly important to the transportation industry. Companies therefore need access to advanced technical capabilities while governments want greater control over critical supply chains. Ford’s situation demonstrates how these competing priorities can directly affect manufacturing strategies and corporate partnerships.
9. North American Trade Adds Another Layer
The debate also comes as Canada and the United States reassess their deeply connected trade relationship. Canadian merchandise exports remain heavily dependent on the U.S. market, with 71.7 percent of Canadian merchandise exports going to the United States in 2025. U.S.-bound exports also represented 15.9 percent of Canadian GDP in 2024 and directly supported more than 2.5 million jobs. These figures demonstrate how closely manufacturing, employment, and trade remain connected across North America.
North American Trade Highlights:
- 71.7% exports went U.S.
- 2.5 million jobs supported
- Strong cross-border integration
- Canadian counter-tariffs introduced
- Trade diversification accelerating
Canada has also been working to expand trade beyond the United States. Merchandise exports to non-U.S. destinations increased 17.2 percent in 2025, while overall non-U.S. goods and services exports increased 11.1 percent. The Canadian government has set a goal of doubling non-U.S. exports over the next decade. In the automotive sector, however, the strong dependence on the U.S. market shows how difficult it can be to quickly restructure established regional supply chains.
10. Ford’s Strategy Tests the Future of American Manufacturing
The dispute between Ford and the Transportation Department ultimately raises a larger question about what American manufacturing should look like in a technology-driven automotive industry. Ford argues that domestic ownership, American workers, and U.S.-based production can remain at the center of its strategy even when advanced technology originates through international licensing agreements. The Marshall battery plant is the clearest example, with Ford maintaining that it owns and operates the facility and employs 1,700 American workers.
American Manufacturing Priorities:
- Domestic facility ownership
- American workforce expansion
- Advanced battery production
- Technology through licensing
- Stronger supply chain resilience
Ford’s strategy reflects how modern automotive manufacturing often combines technology and expertise from different countries with American labor, factories, and domestic production. The company argues that using foreign technology does not mean abandoning American manufacturing, pointing to its domestic production, workforce, vehicle exports, and Marshall battery facility. However, government criticism shows growing scrutiny of foreign technology and supply-chain dependencies. The situation connects automotive manufacturing with trade policy, national security, technology competition, and international diplomacy, and how Ford balances these priorities could shape its future manufacturing footprint and competitiveness.
