Five years ago, Kentucky lawmakers appropriated hundreds of millions of dollars in upfront forgivable loans to lure Ford’s massive electric vehicle battery plant to Kentucky.
With the Glendale plant’s recent closure, lawmakers now want answers about how or if the state can recoup those taxpayer dollars.
Kentucky Cabinet for Economic Development Secretary Jeff Noel testified in the Senate budget committee Wednesday morning, updating legislators on the administration’s ongoing negotiations with Ford over the Glendale facilities and the looming deadlines to repay those loans to the state.
Under the existing loan agreement, Ford and its South Korean partner company are due to make their first $10 million payment in March of next year, as they have no way to meet their employment targets by the end of this year.
Noel repeated the hopes that Gov. Andy Beshear expressed in December after the plant’s closure was announced, sharing that Ford, in negotiations, has committed to investing another $2 billion to convert the plant to a battery energy storage manufacturer, creating at least 2,100 jobs.
The cabinet secretary said he couldn’t share all of the details of the negotiations, but said it was promising that Ford is taking on the responsibility of the entire $250 million loan — instead of keeping the commitment split at $125 million with its former partner. Ford said it would not operate the second building at the plant, but would work to market it to another manufacturing company.
Noel said the state wants Ford to keep its initial commitment to eventually create 5,000 jobs at the site, but added that might involve an agreement for “some type of adjusted schedule of repayment with the loan.”
Sen. Chris McDaniel, the Republican chair of the Senate budget committee from Ryland Heights, said lawmakers and the administration are obligated to ensure their tax dollars are used wisely and loan terms are honored. Still, under less than desirable circumstances, he said “the cabinet's doing about as good of a job as they could be doing.”
“I think their response is as realistic as it can be,” he said. “At this point, they've gotten more concessions out of Ford than they originally had obligations for.”
McDaniel added that while Ford’s first loan repayment is not due for another year, “it appears that they're working to restructure that a little bit, but with some pretty solid commitments out of Ford.”
The BlueOval SK project was first unveiled in September 2021 as a joint venture between Ford and South Korean company SK On, with the companies investing $5.8 billion to build two massive plants manufacturing EV batteries and eventually employing at least 5,000 workers — making it the largest economic development project in state history.
The 2021 announcement came after lawmakers passed a bill in special session appropriating $410 million from the state’s budget reserve trust fund for a yet-to-be announced economic development project. Of these funds, $350 million was for a forgivable loan, $50 million for worker training and a new training facility, and $10 million to acquire the property in Hardin County — where the project is located.
The Ford partnership received $250 million of the forgivable loans up front, while the other $100 million was directed to another EV battery plant in Bowling Green owned by Japan-based Envision AESC. The two projects were to share aspects of the workforce training spending.
While production never began at one of the two massive buildings at the Glendale site, the first EV batteries started rolling on the assembly line in the other building in the summer of 2025. However, Ford and SK On announced in December they were ending the joint partnership. Ford took over ownership of both buildings, but announced it would close and lay off all of its workers, as they sought to convert the plant into a manufacturer of battery energy storage systems and reopen in 18 months.
At least for now, negotiations on loan repayment with Ford are going much smoother than they did several years ago with Braidy Industries, a company that received a $15 million upfront loan in 2017 to build a $1.7 billion aluminum rolling mill in the Ashland area.
The project never materialized, and Sen. McDaniel led the push to claw back those $15 million from Braidy, compelling testimony from the company in his budget committee. The state eventually recouped the funds in 2022.
McDaniel said the Ford negotiations should be much easier, as Ford is a much more trustworthy partner.
“Braidy was a highly speculative outfit run by a guy who's proven to be nothing but a fraud in that and many other endeavors in life,” McDaniel said. “But here you're dealing with Ford, with a well-respected company across the United States, who values their reputation, who values the longevity of what it is that they're doing. I don't think that this is the same deal.”
McDaniel noted that the current legislative session ends on April 15, and he expects Ford and the Beshear administration to come to some sort of resolution by then that lawmakers can vote on to approve.
“I would struggle to see a scenario where Ford and the Cabinet aren't back by the end of this session, needing some help,” McDaniel said. “And I'm optimistic that they'll get to a place where we have a willingness to do it.”
McDaniel added that if Ford and the state do modify the terms of the loan, it would need legislative approval.
Sec. Noel added that the time limit of the session also adds a “sense of urgency” that could be to the state’s benefit, in terms of negotiations.
If there is no agreement by April 15, the governor could also call a special legislative session to approve any negotiated terms with Ford.
Ford’s closure of the EV battery plant came amid ongoing troubles for the EV industry over the past year, as Congress ended the $7,500 tax credits for people buying electric vehicles and made changes to a manufacturing credit program that denied tax credits to projects owned by foreign entities.
After the closure was announced in December, Beshear called out President Donald Trump and congressional Republicans — including Rep. Brett Guthrie, whose district includes Glendale — for passing the legislation.
“I'm still amazed that the President would push through such a job-killing bill that cut subsidies and grants that companies and people had relied upon,” Beshear said. “If we have people that lose their jobs, or jobs that are not created, your own congressman did it to you, and that's really, really wrong. Your governor is going to do his best. I'm going to do my best to make sure we have as many jobs at those facilities as possible.”
