The City of Windsor agreed to purchase the land for the EV battery plant, a move that helped seal the deal. Construction is expected to begin in August.
When Stephen MacKenzie and his team at Invest WindsorEssex learned in early 2021 that the region was in the running for a multibillion-dollar battery plant, they were ready to win the competition for it.
“In economic development, you’ve got to be shovel-ready; if you’re not, investments will pass you by,” said MacKenzie, CEO of the southwestern Ontario region’s economic-development agency.
A rapid response began a 10-month concerted effort involving three levels of government that culminated with the March 23 announcement that Windsor would be the site for the StellantisLG Energy Solution cell and modules plant. It’s Canada’s first large-scale battery-assembly operation and with a $5-billion pricetag is the largest single investment in the history of Canada’s auto industry.
While the provincial and federal governments will provide hundreds of millions of dollars to the project, the city assembled the land package. It’s an acquisition expected to cost the municipality $40 million to $50 million.
“If it wasn’t for that piece of property, this plant wouldn’t be going into Canada today,” said Joe Goncalves, Invest WindsorEssex’s director of investment attraction and the lead on the LG Energy-Stellantis file.
The 220 acres (90 hectares) in Windsor’s Twin Oaks industrial park in the southeast part of the city had been identified in a site inventory conducted by the agency months before the beginning of discussions with representatives of the joint venture.
Ensuring the region had shovel-ready land for large-scale manufacturing was part of an economic-development strategy crafted in early 2021.
“We have been blessed since 1904, when Henry Ford [established a plant] here,” said MacKenzie.
“But, we couldn’t rest on our laurels. We knew we had to embrace technology-driven economic change. So, we did our research.”
WINDSOR WAS PLANNING FOR THIS
January 2021: Invest WindsorEssex drafts a strategy designed to attract EV supply-chain investments.
May: The group receives a request for information (RFI), via Invest In Canada, regarding a battery company seeking potential sites for a large-scale plant. The RFI was completed and submitted within 12 hours, said CEO Stephen MacKenzie.
July 21: Stellantis CEO Carlos Tavares is in the news saying that one of two battery plants in North America could be located in Canada.
July 24: The first face-to-face meeting between the land team from LG Energy Solution and representatives from Invest WindsorEssex. With pandemic-related border restrictions still in effect, the federal government grants an exemption for the LG team citing “Canada’s national interests.”
Sept. 29: LG follow-up visit to Windsor.
Oct. 5: LG Energy senior executive team meets with Windsor officials. “In my view this was the crucial meeting,” said Joe Goncalves of Invest WindsorEssex.
Oct. 21: LG Energy and Stellantis executives meet with Windsor officials.
December: Federal Industry Minister Francois-Philippe Champagne meets with Tavares in Detroit.
Feb. 9, 2022: Tavares begins a tour of assembly plants in Windsor and Brampton. He also holds meetings in Canada with Champagne and Ontario Economic Development Minister Vic Fedeli. Later in the month, LG Energy informs Invest WindsorEssex the Twin Oaks location is its preferred site, although a U.S. site is still in play.
March 14: The LG Energy-Stellantis joint venture confirms it has selected the Windsor site for a $5-billion battery plant.
March 21: Windsor City Council holds an in-camera meeting to approve land-acquisition plans for the joint venture.
March 23: Senior federal, provincial and municipal government officials, and executives from Stellantis and LG, announce the plant.
The strategy, designed to help the Windsor area’s automotive industry pivot to the electric-vehicle era from internal combustion, was drawn from two studies commissioned by Invest WindsorEssex, said MacKenzie.
In the fall of 2020, the agency hired P3 Group, a Germany-based consultancy with experience in helping overseas and U.S. jurisdictions secure EV battery plants. The report determined the region’s strengths and areas in need of improvement to be able to successfully bid. It also generated “leads” — potential investors.
The WindsorEssex area met much of the criteria for battery-plant investment, such as proximity to automakers and Tier One suppliers, availability of clean electricity and natural gas as well as a skilled workforce, said Goncalves.
The report also noted that battery plants generally required sites from 200 to 500 acres (80 to 200 hectares), said Goncalves.
That prompted Invest WindsorEssex to conduct an inventory of suitable land, identifying two sites, including the site that would help secure the LG-Stellantis plant.
A second study by consulting firm Deloitte analyzed the region’s workforce, such as labour costs, training and availability, prompting local officials to conclude that Windsor-Essex could indeed compete for battery plants, said MacKenzie.
“It required a self-analysis. Deloitte did real market validation.”
Added Goncalves, “We wanted to play in this area but really figure out how to win.”
ALSO, THERE WAS ‘DUMB LUCK’
Armed with its “value proposition,” Invest WindsorEssex began pursuing potential investors, said Goncalves. By the time it had learned of the joint venture’s interest in the region last year, Invest WindsorEssex already was “working with other battery [companies],” he said. But the agency shifted focus and responded to a request by LG Energy for information (RFI) consisting of 282 questions, the initial step in the process.
“We were able to turn around the RFI in 12 hours,” said MacKenzie.
The joint venture also was eying sites in other parts of Ontario, Quebec and the United States, said Goncalves.
Windsor’s edge, he said, was the availability of land that could accommodate both the size of the plant as well as the joint venture’s tight timeline.
“When somebody tells you they have to be up and going [in August] of 2024, they need 180 megawatts of power, this much [natural gas], this much wastewater, this much land, there’s not many sites in Ontario, period, that would meet those requirements. But we already had done the research.”
“Dumb luck” also played a role, said Goncalves. The largest parcel of land in the package — 160 acres (64 hectares) — had already undergone the required due diligence, including environmental assessments.
Joint-venture representatives were adamant about not having to purchase the site, he said.
“One of the things in common to communities that got these battery plants is their investors got free land,” he said. “You don’t invest $5 billion and expect to pay for the land.”
CITY OF WINDSOR GATHERED THE LAND
Stephen MacKenzie, left, and Joe Goncalves, of Invest WindsorEssex were two of the architects of the Stellantis-LG Energy Solution deal.
Of the total site area, the city owned 24 acres (nine hectares) and the remainder had five separate owners.
“We started reaching out to the owners of the property to see if they were interested in selling, and they were,” said Goncalves. “So, we were able to put that piece of land together.”
Invest WindsorEssex proposed that the municipality purchase the land and lease it at a “very low rate” to the joint venture, said Goncalves.
“It gives the [company] land, and the city gets any appreciation in the value over time; that was a way of getting around that complexity.”
The city’s role as well as the owners’ willingness to sell their properties were noted by Stellantis’ North America COO Mark Stewart during the March 23 press conference announcing the plant.
“I want to give a shout-out to the families who helped with the land in the area so quickly, so that we could pull this together. “Thank you, Mayor Drew [Dilkens] for doing this.”
With the investment secured, MacKenzie and Goncalves are currently in talks with potential suppliers for the plant, which will employ 2,500 people by the first quarter of 2025.
“We estimate that plant will generate another $1 billion in investment and an additional 1,000 jobs,” said MacKenzie. “This is not the end. This is just the end of the beginning.”
CORRECTION: A previous version of this story cited an incorrect employment figure, provided by Invest WindsorEssex. Stellantis says the battery plant will employ 2,500 people.
