Highlights
- Ford plants idled due to shortage of rare earth magnets controlled by China, highlighting critical industrial dependencies.
- CEO Jim Farley emphasizes the need for skilled trades and domestic manufacturing to ensure national economic resilience.
- Ongoing trade negotiations and licensing challenges underscore the complex geopolitical dynamics of rare earth supply chains.
In a candid warning from the Aspen Ideas Festival (opens in a new tab), Ford CEO Jim Farley (opens in a new tab) revealed that multiple Ford plants were idled in recent weeks due to a shortage of high-power rare earth magnetsโmaterials overwhelmingly controlled by China. The comments follow Chinaโs tightened export restrictions in response to U.S. tariffs and come amid broader calls for industrial revival. Farley urged U.S. companies to invest in skilled trades and domestic manufacturing, framing โessential economyโ jobs as central to national resilience.
On that topic, Ford plans a summit in SeptemberโFord Pro Accelerateโto unite industry and policymakers in solving labor and supply chain challenges. Meanwhile, Treasury Secretary Scott Bessent announced a tentative rare earth trade deal with China aimed at mitigating export delays. Of course, Rare Earth Exchanges (REEx) has informed us that this is not a final deal, but rather a reprieve, one that concedes China much.
Farleyโs remarks ring alarm bells for investors and policymakers alike. His stark admissionโโwe cannot get any high power magnets without Chinaโโconfirms what REEx has repeatedly warned: Americaโs overreliance on Chinese rare earth supply chains has real-time consequences, from EV innovation to factory uptime.
As REEx understands the unfolding situation, the recent comments tracked in The Detroit News accurately diagnose the fragility of the supply chain. Fordโs shutdowns validate industry-wide concerns about China's dominance in rare earth magnet production, particularly NdFeB (neodymium-iron-boron) magnets, which are used in motors, sensors, and speaker systems.ย Additionally, the shortage of skilled labor remains a significant liability. Farleyโs emphasis on vocational training is timely; as AI-driven manufacturing expands, the U.S. faces a significant gap in welders, HVAC technicians, and electrical trades, many of which are crucial to rare earth processing and downstream magnet fabrication.
Finally, a recognition of the licensing catchโ22. In that, the article correctly notes the irony that Fordโs LFP battery plant depends on IP from Chinaโs CATL--Contemporary Amperex Technology Co. Limited (CATL) (opens in a new tab)ย is a Chinese company that has become a global leader in LFP battery technology and production.ย Although intended to localize production, it exposes Ford to regulatory backlash and potential ineligibility for tax credits under โOne Big, Beautiful Billโ reforms.
As for more speculative material, any optimism associated with the China trade deal is noteworthy. While Secretary Bessent announced progress on rare earth trade with China, the details remain vague. Given Chinaโs increasing use of rare earths as a geopolitical tool, investors should approach this announcement with caution.ย Plus
Fordโs VP Lisa Drake (opens in a new tab) downplays the disruption as โhand-to-mouth.โ This framing may obscure deeper structural vulnerabilities that affect long-term EV and defense sector planning.
REEx Reflection
Farleyโs speech should be a wake-up call. Americaโs industrial reawakening must go beyond battery plants and rhetoricโit needs resilient, domestic rare earth magnet supply chains, skilled trade pipelines, and bipartisan policy consistency. As REEx has argued, building this backbone will determine the trajectory of clean energy, defense readiness, and economic sovereignty for decades to come. It comes down to a term not very popular in Washington, DCโindustrial policy.
See The Detroit News (opens in a new tab).
IXRสผs Ionic Technologies is directly involved in a UK project with Less Common Metals (LCM) and GKN as part of the CLIMATES program.
1. Ionic Technologies IXR: Processes end-of-life magnets and manufacturing scrap at their Belfast facility, producing high-purity separated rare earth oxides REOs.
2. LCM: Receives these REOs and converts them into rare earth magnet alloys.
3. GKN: Uses these alloys to manufacture new permanent magnets.
4. Ford: These recycled-content magnets are now being tested in the new Ford Puma EVs at Fords Halewood facility in the UK
This is the first time a UK-based, closed-loop rare earth supply chain has delivered recycled magnet material for direct use in a major OEMสผs EV production. Itสผs a huge step for UK critical minerals independence and a real-world demonstration of IXRสผs technology and partnership’s inaction.
So, when you see news about Fordสผs EVs and rare earths, remember: IXR, LCM, and VAC + (GKN) are at the heart of the UKสผs push for a domestic, circular magnet supply chainโnow being proven in Fordสผs own vehicles. Morale of the story for the US is No Separation and Refining Technology with No Magnet Alloy Producers