Fiat Chrysler Automobiles’ commitment to spend up to $1.5 billion on its Windsor, Ont., assembly plant for green-vehicle production could offer a preview of what’s to come after its merger with French automaker PSA Group.
As part of a new three-year contract with Unifor, FCA said it would build battery-electric “and/or” plugin hybrid vehicles on a new platform beginning in 2024. The plant currently assembles minivans including the Chrysler Pacifica and its hybrid model.
The spending plans are notable coming from FCA, which is on track to merge with PSA by the first quarter of 2021. The merger, which will form a new company called Stellantis, was spurred in part by FCA’s desire to pool resources as electrification accelerates and to modernize its platforms.
MUTUALLY ADVANTAGEOUS GOALS
“I’m curious if it’s not a shared platform with PSA because FCA doesn’t have an electric platform and PSA does,” said Sam Fiorani, vice-president of global vehicle forecasting at U.S.-based AutoForecast Solutions LLC. “FCA has not been shy about not wanting to design their own EVs, and PSA is not shy about having a whole line of them. If FCA needs one, they can go through ... PSA and add that.”
The Unifor negotiations were the final round of union talks for FCA before it merges with PSA. The three-year contract with Unifor, which will still apply under Stellantis, also includes a $50-million investment at the FCA assembly plant in Brampton, Ont., which will continue to build the Chrysler 300 sedan and the Dodge Charger and Challenger.
The investment was framed by Unifor President Jerry Dias as a major win for the union and its members following months of uncertainty. About 1,500 workers were laid off at Windsor earlier this year after one of three shifts was cut amid slumping minivan sales, and the plant was shut down multiple times in 2020 to align production with demand. During the first three quarters of 2020, minivan sales in Canada were down 31 per cent from a year earlier, while U.S. sales slipped 36 per cent.
DEPENDENT ON GOVERNMENT SUPPORT
FCA’s investment in Windsor is contingent upon “government financial support,” according to a letter from FCA Canada to Unifor that outlines FCA’s investment and product commitments under the new contract.
Government assistance has not been announced, though FCA and the federal and Ontario governments are believed to be in discussions. The federal and provincial governments combined to give Ford $590 million for its Oakville investment, accounting for about 33 per cent of the projected cost of the program. That compares with about 20 per cent government support for other recent automaker investments.
“To see government investing in the sector is critically important, and I think it sends a strong message around the world that Canada is and wants to continue to be a player in the automotive industry. There’s a huge symbolic importance in doing that,” said Brian Kingston, CEO of the Canadian Vehicle Manufacturers’ Association, which represents the Detroit Three in Canada.
The investment, which would begin in 2023 with about 38 weeks of ramp-up, was expected to bring back the Windsor plant’s third shift, fulfilling a major goal for Unifor in this year’s negotiations. About 2,000 jobs would potentially be added to the plant by 2024, according to FCA.
The union said about 425 workers who remain on layoff from this year’s third-shift cut would be recalled.
Between the new hires and expected retirements in the next four years, the Windsor workforce could look much different than it does today, said Brendan Sweeney, managing director of the Trillium Network for Advanced Manufacturing, a London, Ont., nonprofit dedicated to promoting manufacturing in Ontario. Hiring so many new workers gives FCA a chance to diversify its workforce, he said.
“If FCA’s thinking it’s got to hire [thousands of] more people in the next six years, you’re not going to do it with men alone. And you’re not going to do it only with people that are 40 or older. You’re going to get younger, and you’re going to get more diverse, which is a good thing in my opinion.”
Given the Windsor plant’s location near the United States border and its distance from other major Canadian cities, FCA might have to get creative to find enough workers to fill all those roles, Sweeney said.
FINDING STAFF IS A GOOD PROBLEM TO HAVE
“You’re going to need to hire a lot of new people, and the Windsor labour [pool is] unlike the Brampton” pool,” he said, referring to the Toronto suburb. “Take Brampton or Oakville or Cambridge and draw a circle around them, and you’ve got a lot more land and a lot more people in that labour [pool]. In Windsor, you’re limited.”
Still, for Unifor, that’s a good problem to have, considering the alternative.
“Where are we going to find people? How are we going to do the hiring? There’s a lot more positive spin on those questions than if everyone lost their jobs,” Sweeney said.