Unifor wants Canada to become a major manufacturer of electric vehicles, but it might need major investments from automakers and parts companies throughout the supply chain in order to make that happen.
That, in part, is due to trade, said Kristin Dziczek, vice-president of industry, labour and economics at the Center for Automotive Research in Ann Arbor, Michigan. Pure battery-electric vehicles, for instance, have “among the lowest” North American content of all models sold in the market, potentially making it difficult for automakers to build them in Canada and still comply with the new United States-Mexico-Canada Agreement (USMCA).
In theory, this is the USMCA and its increased regional content requirements working as designed, by incentivizing automakers and suppliers to build more parts and batteries locally to support greater EV adoption.
But if automakers still are not able to meet the USMCA’s regional content requirements, they will need to pay tariffs to move vehicles across the border. Considering most vehicles assembled in Canada are shipped to the United States, automakers in some cases might decide it makes more sense to build in the U.S. and pay tariffs on a much smaller number of exported vehicles.
“Just make it a few hundred miles south of where you are in Canada and you don’t have to pay a tariff and content levels to meet” for vehicles sold there, she said.
So if Unifor is serious about wanting EV production in Canada — or even more hybrid production — it will need to convince automakers that it will be viable to do so. And that will likely require massive investments not only at assembly plants but also at the factories that supply them.
Take Ford, for example. Unifor, currently bargaining with Ford for a new contract, is seeking production for its Oakville, Ont., plant, which will reportedly no longer make the Edge crossover beyond 2023. If the union wants Ford to build a hybrid there, for instance, the company might also want to make an investment in its Windsor-Essex engine operations to support that.
“That will be an interesting side of this,” Dziczek said. “Are they going to push for the BEV or the hybrids for the assembly plants? And then what do you do about Windsor-Essex and [General Motors’ engine plant in] St. Catharines?”
Unifor President Jerry Dias during a news conference last week urged the federal and Ontario governments to help attract the investments it wants. He called on the federal government, in particular, to draw from funds for strategic innovation and green infrastructure to incentivize automakers to make EV investments in Canada.
“If you’re talking about a transformation and green technology and a transformation to the future,” Dias said, “what better industry to start with than your No. 1 manufacturing industry?”
Dias sees green vehicle production as critical to Canadian auto manufacturing’s long-term viability.
“If you don’t get in on the ground floor with the investments, you are going to be left out in the cold in the long term. And we have no interest in being left out,” he said.
Time will tell how successful the union is. Its contracts with the Detroit 3 automakers expire on Sept. 21.