AP Auto Writer

DETROIT — Ford is forming a joint venture that will build two North American factories to make batteries for roughly 600,000 electric vehicles per year by the middle of this decade.

The deal with battery maker SK Innovation of Korea, announced Thursday, sets up a potential confrontation between the companies and the United Auto Workers, which issued a statement saying Ford has a moral obligation to make sure plant workers are paid union wages.

The UAW and President Joe Biden have advocated for union jobs in new factories as the country transitions from gasoline-burning vehicles to those powered by electricity. The issue almost certainly will be part of negotiations on a new UAW national contract in 2023.

The joint venture called BlueOvalSK is the start of Ford’s plan to vertically integrate key parts of the electric vehicle supply chain. The companies say they have signed a memorandum of understanding, but details on the ownership structure and factory locations have yet to be worked out.

Company executives wouldn’t say whether jobs at the factories would be union. Ford North America Chief Operating Officer Lisa Drake said the companies are still in the memorandum of understanding phase. “We don’t have our labor strategy defined yet. That will be determined by the joint venture itself once that entity is set up” this summer, she said.

SK Innovation already has a U.S. battery factory in Commerce, Georgia, and says it’s expanding production in Europe and China. It plans to be one of the top three electric vehicle battery suppliers in the world by 2025, according to a statement. The company has a contract with Ford to make batteries for a new electric F-150 pickup truck, which is due in showrooms by next spring. Ford’s F-Series pickups are the top-selling vehicles in the U.S.

The UAW has been vocal as General Motors and now Ford have announced plans for joint ventures with battery companies to supply what’s expected to be a growing electric vehicle market.