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FirstFT: Ford suspends construction of EV battery plant in Michigan

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Ford has suspended construction of a $3.5bn electric battery manufacturing plant in Michigan, US, amid controversy over the plan and an auto workers’ strike.

The carmaker had intended to build batteries made with licensed technology from China’s Contemporary Amperex Technology, or CATL, the world’s largest battery maker for electric vehicles. The plant was scheduled to open in three years and employ 2,500 workers.

But the project, which was announced in February, has attracted criticism from Republican lawmakers because of its links to CATL. US senator Marco Rubio described it as bringing “America’s greatest geopolitical adversary into the heartland”.

The suspension was announced on the eve of a trip by US president Joe Biden to Michigan. He plans to join striking auto workers on the picket line ahead of a separate visit to the state by Donald Trump later this week. Here’s more on Ford’s abrupt decision.

Here’s what else I’m keeping tabs on today:

  • Markets: US government bonds will be in focus today after yields on the benchmark 10-year Treasury hit their highest level since 2007 yesterday. Here’s the latest on prices in Asia and Europe.

  • Economic data: The Conference Board will release its consumer confidence index for September, while new US home sales and the S&P CoreLogic Case-Shiller index of house prices in 20 big metropolitan areas across America are also set to be released.

  • Fedspeak: US Federal Reserve governor Michelle Bowman will give the opening remarks on rental housing affordability at a Fed housing market forum.

Join representatives from BlackRock, Goldman Sachs and BNY Mellon Investment Management at a conference about the future of investing in North America. The two-day, in-person and online event starts tomorrow and you can register here.

Five more top stories

1. Exclusive: Russia has weathered western sanctions over the invasion of Ukraine, one of Russia’s richest men has told the Financial Times. Oleg Deripaska, the founder of leading aluminium producer Rusal and its parent energy company En+, expressed “surprise” at Russia’s resilience after a war he thought would bankrupt the Kremlin. Here’s the full interview.

  • War in Ukraine latest: Russian air strikes have targeted two grain-exporting ports on the river Danube, bordering Nato member Romania.

2. Fossil fuel demand must fall by a quarter by the end of this decade if governments want to limit the rise in global warming to 1.5C since the pre-industrial period, the International Energy Agency has concluded in its annual assessment of the world’s progress towards reaching the UN’s 2050 net zero target.  

3. Meta has paid £149mn to break its lease on a large London development near Regent’s Park as big tech groups pull back on office space in response to the rise in hybrid working. One property analyst estimated that Meta, the owner of Facebook, Instagram and WhatsApp, was now proposing to sublet or surrender close to 1mn sq ft of office space in Europe, mostly in London and Dublin. Meta’s decision is part of a review of its “entire global real estate footprint”.

4. High-grade US companies are piling into the convertible bond market — typically the preserve of junk-rated issuers — as they try to minimise rising borrowing costs caused by the Fed’s aggressive campaign of interest rate rises. Investment-grade borrowers have sold $12bn of convertible bonds so far this year, according to data from Bank of America, three times the average. Here’s more on the report.

5. A drug by Merck has been linked to permanent “transmissible” Covid-19 mutations. Researchers found that mutations had increased after the US pharmaceutical group’s molnupiravir was introduced, especially in countries where the treatment was more widely used, raising concerns about the effectiveness of antiviral drugs to treat Covid-19.

The Big Read

Montage image illustrating US government bonds and the US Federal Reserve headquarters
© FT Montage/Dreamstime

Global regulators are raising alarm bells over a rapid build-up in hedge fund bets in the $25tn US Treasury market. The so-called basis trade involves selling futures and buying bonds and extracting gains from the small gap between the two instruments using borrowed money. Here’s how this could cause potentially serious problems.

We’re also reading . . . 

  • Media: Many had thought Bob Iger was preparing to jettison Hulu, the streaming service when he returned to Disney. But three months on, the stage is set for Disney to take full ownership.

  • Exchanges: The US is crushing Europe’s domestic exchanges, argues Philip Augar.

  • Net zero: The green transition will be hard on workers and involve trade-offs policymakers would rather not talk about, writes Sarah O’Connor.

Chart of the day

Chart showing global trade is falling at the fastest pace since the beginning of the Covid-19 pandemic

World trade volumes fell at their fastest annual pace for almost three years in July, according to closely watched figures that signal rising interest rates are beginning to affect global demand for goods.

Take a break from the news 

This Is New York, the title of the Museum of the City of New York’s centennial exhibition, is simultaneously giddy, sober, meticulous and dizzying, writes Ariella Budick. The museum has assembled everything from film clips to graphic novels and photographs to capture the hectic nature of life in the city.

‘Apartment House Roof’ (1953) by Michael ‘Tony’ Vaccaro for LOOK magazine
‘Apartment House Roof’ (1953) by Michael ‘Tony’ Vaccaro for LOOK magazine © Museum of the City of New York

Additional contributions from Tee Zhuo and Benjamin Wilhelm

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