If Ford Motor Co. chooses to build an electric vehicle in Oakville, Ont., it will be the first of the American automakers to build EVs in each of the three USMCA nations.
But doing so could cut into profitability and would not necessarily guarantee each of the roughly 4,200 workers in Oakville would keep their jobs due to lower production volumes, warned Sam Fiorani, vice-president of global vehicle forecasting at AutoForecast Solutions LLC.
“If you were to do that, you still might need to cut the head count at Oakville. The positive would be you would save some jobs. The negative would be you’d lose some jobs still, and you’d lower the profitability of your EVs that are already precariously unprofitable,” he said today.
The Toronto Star newspaper reported late Sunday night that the federal government is willing to spend $500 million to help Ford retool the Oakville plant for EV production. Ontario Premier Doug Ford said today the provincial government is also willing to contribute a “massive amount” to secure EV production.
Future product at the Oakville plant has been the focus of talks between Ford Motor and Unifor since labour negotiations formally began in August. The Oakville plant, which builds the Ford Edge and Lincoln Nautilus crossovers, is reportedly without a production mandate beyond 2023. The automaker has neither confirmed or denied that prediction made by AutoForecast Solutions in June.
Ford builds the Mustang Mach-E electric crossover in Mexico and has announced plans to build the F-150 EV in Michigan. Automotive News reported last year that Ford plans to build midsize EV crossovers similar in size to the Edge and Nautilus for the 2023 model year. Those were expected to be built in Flat Rock, Mich., though plans for the site have changed.
Ford plans to spend $11.5 billion on EVs and hybrids through 2022, resulting in about 16 electric vehicles.
Fiorani said it was expected that Ford would build many of those EVs in Mexico and that it was unclear which vehicle would be built in Oakville, should the company choose to go that route.
“If you’re going to move something from Mexico, chances are you would move something with a higher price,” he said. “If it’s a lower priced vehicle, you’re going to want to build it in Mexico. You want to pick something that has profitability to begin with. But these vehicles are on the cusp of not being profitable all by themselves.”