Kentucky is renegotiating a major incentive agreement tied to the BlueOval SK project following changes to the partnership behind the electric vehicle battery plant in Glendale.
After Ford and South Korea-based SK On dissolved their joint venture, the EV battery facility is set to close, resulting in the loss of about 1,600 jobs. Ford says a subsidiary will repurpose the site into an energy storage operation instead.
Kentucky taxpayers provided Ford and SK On with a $250 million upfront loan to help build the battery park. Under the original agreement, the loan could be forgiven if the companies met specific employment targets by 2026.
Governor Andy Beshear said Thursday that while the state has the authority to reclaim taxpayer funds, officials are holding off as Ford develops a long-term plan for the Hardin County 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 initially projected 2,500 jobs at the first plant. Ford now says the new energy storage operation will create about 2,100 positions. A second plant that has not yet opened is also part of the renegotiation process.
The companies invested roughly $2 billion more than the $5.8 billion originally covered by state incentives.
Unlike most economic development deals in Kentucky, the BlueOval SK agreement provided subsidies upfront instead of spreading them out over time. While immediate capital can make Kentucky more competitive, it also increases financial risk for the state.
The original deal required BlueOval SK to create 2,500 jobs by the end of 2026, with average hourly wages of $26.41. By 2031, the targets increased to 5,000 jobs with average pay of $30.04 per hour. Failing to meet those benchmarks could have forced repayment of part or all of the loan.
Kentucky last issued an upfront loan in 2017, investing $15 million in Braidy Industries. Although the aluminum project near Ashland never materialized, the state eventually recovered its funds.
Lawmakers approved the $250 million BlueOval SK loan in 2021 during a special session of the Republican-led General Assembly.
The incentive package also included millions of dollars in Hardin County land transferred to BlueOval SK at no cost, along with the creation of a workforce training center at Elizabethtown Community and Technical College.
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