In 2010, Microsoft was on the verge of picking Christiansburg as the site for a data center. The press release was written. The grading plan was submitted. The town council had cast some votes to clear the way for an “unnamed company” to store diesel fuel for backup generators.
Then it all fell in – literally. Microsoft was scared off by a sinkhole and state officials scrambled to find another location for the company, which turned out to be Boydton in Mecklenburg County. Today Mecklenburg County is home to Microsoft’s largest data center in the world – total investment now topping $2 billion. For the New River Valley, which is building a reputation as a tech hub even without Microsoft, this will always be “the one that got away.”
Now we have another one that got away – in Pittsylvania County. Or, perhaps, more accurately, Michigan.
Last year, Ford was looking for a site for an electric vehicle battery plant and was eyeing the 3,528-acre Southern Virginia Mega Site in Pittsylvania County. In December, Gov. Glenn Youngkin nixed Virginia’s bid for the plant, citing Ford’s relationship with a Chinese company that owns the technology Ford would have used. This week, Ford announced it would build the plant in Michigan, expecting 2,500 jobs to come online by 2026. These are 2,500 jobs that could have been in Pittsylvania County.
Michigan officials said the jobs will pay $20 to $50 per hour. At 40 hours a week, that’s $41,600 to $104,000 a year. The Census Bureau reports that the median household income is $49,486 per year in Pittsylvania County, $38,904 in Danville. In neighboring Henry County, it’s $41,103 and in Martinsville it’s $36,832.
You can do your own math to figure out what 2,500 jobs in that pay range would have meant for that part of Virginia.
Before anyone races to vilify the governor, let’s stipulate that Youngkin had valid concerns about Ford’s use of Chinese technology. Ford’s deal with Contemporary Amperex Technology Co., better known as CATL (not to be confused with the Canadian blues band by the same name) does further Chinese dominance in a growing sector of the economy. I explored this in a previous column.
Turning those jobs away, though, doesn’t change that. It simply moves the jobs to Michigan. President Joe Biden could presumably shoot down the Ford deal just like he shot down the Chinese spy balloon but he hasn’t, no doubt for the same reason that Michigan Gov. Gretchen Whitmer embraced the jobs that Youngkin has turned away: They want to see more manufacturing jobs, particularly in the high-paying automotive sector.
The question is whether it matters that Ford is using Chinese technology as long as those batteries are built in the United States: It’s not as if car batteries are national security tech. Still, opinions obviously vary.
Ford executives tried to address these concerns in their Michigan announcement. “Manufacturing in America will bring us closer to battery independence,” Ford Chairman Bill Ford said. “Right now, many automakers import most of their batteries from abroad. This is a slow, expensive process that makes us vulnerable to supply chain disruptions.”
What Youngkin sees as economic treason Ford sees as economic patriotism. As I said, opinions obviously vary.
I suggested in an earlier column that if we’re truly concerned about Chinese dominance in the electric vehicle battery market, we should fund research into creating American-made battery technology; I haven’t seen anyone take me up on that offer. A report by the Yale School of the Environment reports that such research is underway in Massachusetts. Why not Virginia? Youngkin has proposed to fund an energy innovation hub; why not a battery innovation hub? Like it or not, automakers are investing in a big push for electric vehicles. (I wrote about that in a previous column, too.) Electric vehicles are basically big batteries on wheels. Youngkin wants a “moonshot” to build a small nuclear reactor in Southwest Virginia; why not a “moonshot” to develop domestic battery technology? Maybe that’s too big a project for a single state, but why isn’t anyone proposing that at the national level?
At the risk of quoting Vladimir Lenin, the Chinese have seized “the commanding heights” of the economy, at least as far as this sector is concerned. Shooting down their spy balloons or banning Chinese companies from buying American land may be necessary steps, but they are reactive, not proactive. Last year Congress reacted to concerns that too much of the semiconductor industry is overseas by passing the CHIPS-Plus Act to encourage domestic microchip production. Where is the similar concern over electric vehicle batteries? Or does that apparent lack of concern suggest there’s a fundamental difference here: We need microchips to run the computers that run almost everything these days and don’t want to depend on foreign suppliers for something so critical. But as long as car companies are making electric vehicle batteries in the United States, does it matter who owns the technology?
If it does, then what else should we be concerned with? Our relationship with China is a complicated one. On the one hand, it’s a country we could conceivably go to war with over Taiwan. On the other hand, it’s our nation’s third biggest buyer of American-made exports, behind only Canada and Mexico. And of course, it’s our biggest supplier of imports. According to the sticker on the bottom, I’m typing this column on a computer assembled in China on behalf of an American company headquartered in Texas. Both parties have, in their own way, expressed concern about Chinese dominance in technology. Both the bipartisan CHIPS-Plus Act and the Democrats’ misleadingly named Inflation Reduction Act contained provisions designed to boost American research and development (including creating at least 20 “regional tech hubs,” for which Blacksburg, Charlottesville and Lynchburg have been identified as legitimate contenders; see my previous column). All that’s long-term strategic thinking, though. When it comes down to the immediate question of Ford’s electric vehicle battery plant and its 2,500 jobs, Youngkin said “no thanks” while Whitmer said “yes, please” – and offered up $1 billion in incentives to make that happen, raising the question of whether Virginia would have bid that high. (The state’s incentives for Amazon to locate its second headquarters in Northern Virginia were valued at $750 million.)
I suspect Youngkin’s decision to turn away the Ford plant is an issue that won’t go away. It’s too easily understood (or, perhaps, misunderstood).
For Democrats, this is an easy issue. Some are keen to figure out a way to regain votes in rural Virginia, and here’s a Republican governor turning jobs away from a Republican-voting part of rural Virginia: “The governor needs to go to Southside, hold a town hall and explain why it is OK for him to make tens of millions of dollars off of investments in China and Chinese investments in the United States when he was in Carlyle Group, but he decided to play politics when it came to the livelihood for an entire region,” Del. David Reid, D-Loudoun County, said during one recent House debate. (Reid, it should be noted, is also mentioned as a possible candidate for governor.)
Republican defenders of the governor say Youngkin is right to wait for the “right” jobs to come to the Southern Virginia Mega Site, which they believe surely will. I suspect this is awkward for some of them because I’ve heard from other Republicans in Southside – who don’t want to be quoted – that they’re furious with the governor. They also tell me that all these feelings will go away if something else big lands at the Southern Virginia Mega Site soon. If and when that happens, Ford will no longer be “the one that got away” and Youngkin won’t have to worry about being compared to a sinkhole.