The future of Stellantis’ auto manufacturing footprint in Canada is ultimately at stake in the dispute between the automaker and Ottawa over funding for the $5-billion battery-cell plant in Windsor, Ont.
“Stellantis has made it very clear that plant is at the epicentre of its electric vehicle blueprint,” Unifor National President Lana Payne told Automotive News Canada May 17. “If it’s not there, what happens to the rest of the footprint?”
Unifor Local 444 President Dave Cassidy, who represents hourly workers at Windsor Assembly Plant, which is slated to be retooled to build new product soon, is concerned about the plant’s future.
“I don’t even want to think what it means to us,” he said when asked what would happen if Stellantis nixed the battery plant all together.
Stellantis confirmed to Automotive News Canada that the retooling of Windsor Assembly Plant, which currently builds minivans, “remains on schedule.”
Last year, Stellantis pledged $3.6 billion to retool its Windsor and Brampton Assembly plants to produce electrified vehicles and expand its research and development centre in Windsor.
Construction at a portion of the NextStar Energy plant – a joint venture between the automaker and LG Energy Solution (LGES) – was halted Monday after the companies accused the federal government of not living up to promises to match incentives contained in the U.S. Inflation Reduction Act (IRA). The automaker also warned that it is making contingency plans – a sign that it is willing to move the project across the border.
In a letter to the federal government dated April 19, the CEOs of Stellantis and LGES stated that “continued delay in executing this agreement is bringing significant risk to the project.”
“In the event our agreement is not promptly executed, we will be forced to make difficult decisions regarding this project and other respective investments in Canada in order to deliver on our commitments to bring new technology to the North American market,” said the letter obtained by the Toronto Star.
The plant, expected to employ 2,500 people and slated to begin production next year, would be capable of producing 45 gigawatt-hours of lithium ion cells and modules annually to feed Stellantis plants in Canada and the United States.
Construction on the module portion of the plant is at a standstill, but work continues elsewhere on site.
“They haven’t stopped total construction. We have 500 tradespeople working there still,” Cassidy said. “It’s frustrating to see this [module] piece not get done.”
The module segment of the plant will employ about 300 people.
OTTAWA, ONTARIO SPAR
The battery plant – which will build both modules and cells – was announced March 23, 2002, with great fanfare, although Ottawa and Queen’s Park had repeatedly refused to disclose the contributions taxpayers would be making to the project. The province has since disclosed that it offered $500 million to the project – an amount likely matched by the federal government at the time.
Ottawa is now pressing Ontario to enrich its contribution to the NextStar Energy Plant by paying its “fair share.”
The demand has been rebuffed by Premier Doug Ford, who said it’s up to Ottawa to match the IRA incentives.
Stellantis’ frustration with the pace of federal government negotiations appeared to heat up after Canada signed a deal April 21 of this year with Volkswagen for a battery gigafactory in St. Thomas, Ont. The federal government has committed to provide up to $13.2 billion in manufacturing tax credits through 2032, while Europe's largest carmaker is investing up to $7 billion to build the plant. The incentives nearly match those in the Inflation Reduction Act, which includes an incentive of US $35 per kWh of cell production and a US $10 per kWh incentive for battery module production.
Cassidy said he can’t believe the federal government won’t commit to Stellantis, given the automaker’s longtime presence in Ontario.
“The feds are supporting the VW plant in St. Thomas. How many workers in Ontario are VW workers?” he said. “Stellantis has the largest footprint in Ontario for workers. This is a return on investment.”
JOBS AT STAKE
Payne said the dispute jeopardizes “thousands of Unifor members’ jobs,” and urged the automaker as well as the federal and provincial governments to find a resolution.
She has been in regular contact with Stellantis, Ontario Industry Minister Vic Fedeli, as well as the prime minister’s and premier’s offices.
“I haven’t slept since last Friday,” said Payne.
Prime Minister Justin Trudeau and Champagne were in Korea this week and were expected to meet with LG Energy Solution’s top executives in an effort to resolve the dispute.
Cassidy insisted Stellantis has made an ironclad case. He said he met with Deputy Prime Minister Chrystia Freeland during an industry roundtable discussion in Toronto last year where she assured all parties Ottawa “would match” incentives in the IRA.
“She agreed that with the IRA, everything was good,” Cassidy said. “In the fall economic statement, everything was good. In the budget, everything was good. And now, today, only $35 of the $45 is good, which leaves the module plant sitting out there.”
Trudeau is now in Japan.
Unifor is urging its members as well as other automotive employers to “contact their MPs and MPPs,” said Payne.
“We only have days, not weeks, to get this done,” she said. “We need all hands on deck.”