Government incentives have long played a major role for automakers as they decide where to invest and allocate new production. Assembly plants in the southern U.S. have typically been the recipients of tens or even hundreds of millions of dollars in tax breaks and other government support.
They certainly appeared to be a factor in Ford's decision to invest in the Oakville plant, where Ford said production of electric vehicles will begin by 2026. Look no further than a letter from Ford to Unifor detailing the company's plans for its Canadian operations. The letter was included in a Unifor document highlighting major changes in the new contract from the previous one.
It notes that the investment in the Oakville plant is "contingent on necessary agreements made in partnership among the company, the union and federal and provincial governments." The Toronto Star reported in September that the governments were planning to offer $500 million Canadian for the project, though that figure hasn't been confirmed by the governments, Unifor or Ford.
Last week, Unifor members voted with a stunning 81 per cent approval of a new three-year contract that shortened the time to top pay and included cash payouts and annual raises.
As the union turns its attention to FCA, Dias hopes the governments will again play an active role in securing investments at the company's Windsor and Brampton, Ontario, assembly plants. Unifor wants at least one new product for the Windsor factory, following the end of the plant's third shift this year.
The shift, along with the jobs of about 1,500 workers, was cut this year amid declining sales in the minivan segment. Workers there assemble the Chrysler Pacifica minivan, as well as a less expensive variant marketed as the Voyager.
Sam Fiorani, vice president of global vehicle forecasting for AutoForecast Solutions, said a new product could end up being a crossover based on the minivan platform, following the end of Dodge Durango production in the U.S. Durango assembly is expected to continue in Detroit until 2023, and a new Dodge crossover could debut by 2024, according to Automotive News' Future Product Pipeline.
"To fill the void of the missing Durango, that would make sense," Fiorani said.
It was unclear whether the governments would support a potential retooling of the Windsor plant, should FCA choose to go in that direction. Requests for comment from federal and provincial government spokespeople were not returned as of press time.
The large investment in the Oakville plant was appealing to both governments in large part because of Ford's plans to build EVs. Such production supports Ottawa's climate goals, and as Ontario Premier Doug Ford noted during a September news conference, it could spur investments throughout the supply chain as suppliers prepare for EV component production.
But even if a green vehicle is not on the table at FCA's Canadian factories, the governments could feel compelled to offer incentives anyway as they look to bolster their economies amid the COVID-19 pandemic.
"Every government around the world is going to be focused on one thing when eventually this thing is contained and we can focus on economic recovery," said Brian Kingston, CEO of the Canadian Vehicle Manufacturers' Association, which represents the Detroit 3 in the country.
"I can assure you there will be an absolute battle around the world to attract investment, including for automotive mandates. Government has to be signaling that this is something that we want to maintain, the auto footprint, and grow it."