Ford to repay $250M loan, work with KY on repurposing part of BlueOval SK campus
Ford Motor Co., not the Kentucky taxpayer, is on the hook for repaying part of a $250 million loan the state gave it to support the creation of thousands of jobs and incentivize positive economic impact at BlueOval SK, an electric vehicle battery factory in Hardin County.
Kentucky’s Economic Development Cabinet Secretary Jeff Noel assured the Senate Standing Committee on Appropriations and Revenue in testimony Wednesday that Ford has agreed to assume full responsibility for the loan, meaning it will take over the debt and split repayment with SK On, the company it launched BlueOval SK with.
Noel also said the state and the automaker have agreed to work together to find a different use “for other development to attract more jobs into the community” on 600 undeveloped acres and at Kentucky 2, the second plant at the BlueOval campus that never began producing batteries.
“My goal, from the very beginning and in working with the governor, has been: Protect the taxpayers of Kentucky,” Noel said. “And help the individual employees that were being impacted. And the third leg of our stool was, ‘let’s make sure that through our relationships, we’ve found the best opportunity of creating more jobs into the future.’”
In December 2025, the South Korean battery maker SK On that had partnered with Ford Motor Co. for U.S. production of parts for electric vehicles, including in Kentucky, said it was ending the joint venture. The two businesses began building a nearly $6 billion, 1,500-acre campus just outside Elizabethtown in 2022.
The first battery rolled off the assembly line at Kentucky 1 in August, just four months before the partnership responsible for its creation dissolved. As the joint venture ends, 1,600 Kentuckians are being laid off as Ford takes control of the plants and repurposes them to make energy storage systems for data centers, utility companies and large-scale industrial and commercial companies.
Revised terms for a state incentive package for Ford came into question once the joint venture was made moot.
Some lawmakers, as the Kentucky General Assembly reconvened in early January, said they would consider necessary legislative actions to recoup money the state first offered and gave to BlueOval SK.
The loan
The $250 million loan required particular investment, job and wage targets be met over a decade with annual repayments set to begin March 2027.
While investment and wage goals were met — $2 billion and at least $26.41 per hour, respectively — BlueOval SK never employed more than 1,850 people, much less than the goal of 2,500 by Dec. 31, 2026.
“If nothing were to be done today — and I’ll get to that in a moment — and no jobs were created and that loan agreement were to stay in place, all $250 million will be repaid to the state of Kentucky: half by SK On, half by Ford,” Noel said.
The automaker will split repayment down the middle with South Korean SK On, the company it created a joint venture with to start BlueOval SK.
“As soon as we found out about the dissolution of the joint venture, I think there are some individuals at Ford Motor Co. that would honestly say I was very clear: ‘There is an obligation of $250 million owed to the taxpayers of Kentucky,’” Noel said.
The loan was set up in lieu of benefits from the state as a pay as you go process.
It was calculated based on a promise from the automaker and battery producer that the joint venture would ramp up jobs and wages. There were corporate guarantees on the loan — a commitment mechanism where a company agrees ahead of time to repay its debts — as well as clawback provisions.
“Ford has been a good partner to the commonwealth for a long time and their secondary and tertiary impacts are well known, and we expect that that relationship will continue,” Sen. Chris McDaniel, R-Ryland Heights, said Wednesday. “But there is an obligation that this committee has to the taxpayers of the common law that we want to ensure is honored as we’re moving forward.”
The next plan for BlueOval SK
Ford has agreed to invest an additional $2 billion in retrofitting one of the Hardin County facilities over the next 18 months for its battery storage business. There’s also a plan in place to hire some 2,100 employees, though Noel said it’s the cabinet’s hope that the number increases to 5,000, the total first promised to be employed at BlueOval SK.
Noel said the automaker and his cabinet will work together to advertise the second BlueOval SK plant for a new development.
“I’ve got a pretty good Rolodex. Ford Motor Co. has a far better Rolodex than I do, and Ford Motor Co. has internal operations that they can bring more jobs and more investment. I want to make sure that that Rolodex and that technical know-how and that global business follows, if you will, the carrot and stick approach that we have been laying out,” Noel said. “The carrot is, let’s keep working together, but the stick is, you have to repay us.”
Money for on-site training center
Noel was also questioned by the committee Wednesday about the $25 million that went to the Kentucky Community and Technical College System for the construction of an on-site training center near the BlueOval SK campus. It opened in May 2024.
The secretary said the community college building was used up until the joint venture was dissolved for employee prescreening, hiring, onboarding and other training.
For the past several weeks, it has been used as a site for job fairs and will continue to do so until Ford begins hiring again.
Outside of those uses, Noel said the building remains relatively empty, but the cabinet is working with the community college system to better understand how it can continue to be a state asset.
“At the end of the day, the only reason to invest taxpayer dollars in economic development is to improve the economic lot of the taxpayer,” McDaniel said. “I’m sure the committee will be very open to creative uses for that (training center).”
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