Unifor President Jerry Dias on Monday morning declined a request for comment from Automotive News Canada. Dias, who has advocated for the federal government to provide significant incentives for EV production, was unaware of the government’s offer as of Sunday night, according to the Star report.
“We look forward to negotiating an agreement with Unifor that will help lead Ford of Canada, our employees and our communities into the future,” a Ford spokeswoman wrote in a statement emailed to Automotive News Canada on Monday morning. “The details about how we do that will be discussed at the bargaining table, not in the media.”
A spokesman for Bains’ office did not immediately provide comment Monday morning.
2 PM ET: ONTARIO WANTS BATTERY PRODUCTION
Ontario Premier Doug Ford said the province is willing to contribute a “massive amount” to secure electric vehicle assembly at Ford Motor’s Oakville, Ont., plant, but noted that the lack of an EV parts supply chain remains a hurdle for the automaker.
“We have the lithium. We have the nickel. We need to manufacture here,” Ford told Automotive News Canada during his daily press briefing Monday. “Do you want to be hauling these batteries from a southern U.S. state up to Canada? Or do you want the batteries manufactured down the street that we can ship in hours, saving millions? I want the battery manufacturing done here.
“We’re contributing toward this plant, we’re contributing a massive amount at the end of the day, once we get through these negotiations.”
While Ford wouldn’t disclose details of the amount province was willing to contribute to the potential project, he said all three major stakeholders – government, the automaker and Unifor -- have a role to play.
“Everyone has to pitch in,” he said. “I’m not going to get into the weeds about what we’re contributing and what we aren’t, but we’re at the table as we speak. I’ve had conversations in the automotive sector.”
1:30 PM ET: SUPPLY CHAIN READY
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, said today the Canadian supply base would be ready to supply components for EV production in Oakville.
“When you think about it, it’s still a vehicle in every way, shape and form, except the powertrain might be different,” Volpe said. “And major powertrain players in Canada like Linamar are ready, from a product point of view, to grow with their OEM customers on EVs. The same can be said for big players like Magna and other powertrain components suppliers.”
Canada has largely missed out on EV production investment in recent years. Automotive News Canada reported earlier this month regional content requirements are some of the main reasons for that. Pure battery-electric vehicles have “among the lowest” North American content of all models sold in the market, according to the Center for Automotive Research, meaning it could be more difficult for them to cross the Canada-U.S. border without tariffs under the new North American trade pact.
Still, Volpe said the supply base is there for companies to build EVs in Canada. He praised the federal government for reportedly taking “an important step up” in offering to assist Ford on EV production.
“It’s a signal that Canada will defend its interests in this space,” he said.
12:15 PM ET: TOUGH MOVE
Building an electric vehicle in Oakville, Ont., could require Ford to move production currently slated for Mexico or the United States.
Sam Fiorani, vice-president of global vehicle forecasting at AutoForecast Solutions LLC, said all of Ford’s known North American EV production is currently earmarked for production elsewhere. For instance, Ford plans to build its upcoming F-150 electric pickup in Michigan, while the Ford Mustang Mach-E crossover is built at a plant in Mexico.
According to Fiorani, much of Ford’s future EV production is slated for Mexico. Moving production to Canada from there could prove to be complicated for Ford, he said.
“If you’re going to move something from Mexico, chances are you would move something with higher price,” he said. “If it’s a lower price vehicle, you’re going to want to build it in Mexico. You want to pick something that has profitability to begin with. But these [EVs] are on the cusp of not being profitable all by themselves.”
He also cautioned that EV production alone would not be able to match the production volumes of the Ford Edge and Lincoln Nautilus crossovers currently built in Oakville, potentially leaving some jobs at risk even if a major investment is made.
“Relocating anything there is going to take up a fraction of the plant,” Fiorani said. “Tesla has one model that is in the volume of an Edge and a Nautilus. So, there’s one [EV] in the world would fill that plant to its current level. Ford would have to have this spectacular hit out the door.”
12 PM ET: ONTARIO MONITORING TALKS
A spokesperson for Vic Fedeli, the Ontario minister of economic development, job creation and trade, said in a statement that the provincial government “will continue to closely monitor” talks between Unifor and the Detroit automakers. She declined to say if the provincial government would offer incentives to Ford for retooling its Oakville, Ont., plant for EV production, as the federal government is reportedly willing to do.
“Our government will always work with our federal colleagues, workers, and the auto sector to ensure the right conditions are in place for the industry to remain stable today and seize the new opportunities of tomorrow,” the spokesperson said.
Incentives offered by the federal government in recent times have often been paired with incentives from the Ontario government. For example, Toyota in 2018 received $110 million each from the federal government and the provincial government as part of a $1.4-billion investment in is Canadian plants.
Unifor represents about 6,300 workers under the current master agreement, including about 4,200 members in Oakville. The union would be in a legal strike position if the contract ends tonight.
A strike would idle production of the Edge and Lincoln Nautilus crossovers in Oakville. The Edge ranks fifth among the brand’s light trucks by total sales in both the United States and Canada. Ford sold 50,651 Edges in the United States in the first half of 2020, and an additional 5,504 in Canada, according to the Automotive News Data Center.
A strike would also halt production of the 5.0-litre and 7.3-litre V-8 engines built in the Windsor factories, which are important to Ford production in the United States. Those engines are found in the company’s top-selling F-series pickup and Ford Mustang.
Parts distribution centres in Edmonton and Brampton, Ont., would also be affected by a strike.
The union, as well as from environmentalist groups, have spent time lobbying the federal government to incentivize more production of EVs in Canada. Unifor sees securing investments for EV production now as critical to maintaining manufacturing in Canada in the long term as companies roll out their electrification strategies.
The Detroit Three currently build no pure battery-electric vehicles in Canada. The hybrid version of the Chrysler Pacifica minivan is the only hybrid model assembled by the trio in Canada.
As previously reported by Automotive News Canada, automakers would likely need to make major investments in Canada to make EV production feasible in the country. This is, in part, due to trade requirements and the fact that so many EV components are sourced from outside the country and the region.
Incentivizing such investments would dovetail with the federal government’s goal of reducing global warming, as well as meeting zero-emissions vehicle sales mandates in Quebec and British Columbia. Ottawa currently offers up to $5,000 in incentives for the purchase of electric and plug-in hybrid vehicles.