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August 23, 2021 12:01 AM

Stellantis Brampton now at a crossroads

'Brampton would either have to continue on the LX platform for the next generation or get a significant investment for a new platform'

John Irwin
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    STELLANTIS

    Dodge Challengers and Chargers are now rolling off the line at the Brampton assembly plant, but after 2023, Stellantis has nothing planned there, says AutoForecast Solutions.

    Stellantis’ assembly pant in Brampton, Ont., is reportedly without a product mandate beyond 2023, setting the stage for possibilities ranging from closure to a major investment in an electric transformation. 

    AutoForecast Solutions LLC (AFS), a U.S.-based forecasting and consulting firm, told Automotive News Canada in July that production of the Dodge Charger and Challenger muscle cars is expected to move to the United States, where they will be built on a new platform that will accommodate an electric variant. 

    “Brampton has the LX [Charger and Challenger] platform that has been paid for for years,” AutoForecast Solutions CEO Joe McCabe said. “Brampton would either have to continue on the LX platform for the next generation or get a significant investment for a new platform” to continue assembling vehicles beyond 2023. 

    The Charger and Challenger are thought to be highly profitable for Stellantis, and demand continues to be strong. But questions have lingered about the Brampton plant for years, given the LX platform’s age and the lack of recent plant investments on a large scale. The LX platform was introduced for the 2005 model year. While the four other Detroit Three factories in Canada have garnered investment commitments worth billions of dollars since contract negotiations in 2020, Brampton received a pledge of $50 million for new derivatives of the Charger and Challenger. 

    “The platform that they’re building on is very, very old,” said Kristin Dziczek, vice-president of research at the Center for Automotive Research (CAR) in Ann Arbor, Mich. “And that’s usually not a good sign if you haven’t gotten recent major investment or a new product commitment.” 

    BATTERIES IN BRAMPTON? 

    One possibility for Brampton is that it could be converted into a battery plant for Stellantis, said Sam Fiorani, vice-president of global vehicle forecasting at AutoForecast Solutions. Stellantis CEO Carlos Tavares told reporters in July that the automaker is considering Canada for one of two North American battery plants. The automaker is investing US $35 billion ($44 billion) in electrification and software development through 2025. 

    “Brampton would make a good place for a battery plant,” Fiorani said, given the factory’s potential availability and its relative proximity to other North American plants. 

    But Unifor President Jerry Dias said the chances of Stellantis ending muscle car production in Brampton “are zero.” 

    “There will be a war if that is their plan, and they’re smart enough to understand that,” said Dias, whose union represents about 3,000 hourly workers at Brampton. “The plant is today and will be the manufacturer of full-size vehicles. ... 

    “I don’t believe [the AFS report] to be true, but it would make the dispute that we had with General Motors at Oshawa seem amateurish.” 

    The future of the Brampton plant is sure to be a major focus of 2023 Detroit Three bargaining, which will take place with a new Unifor president after Dias retires in 2022. Negotiations will coincide with bargaining between the automakers and the United Auto Workers union in the United States. 

    DODGING A BULLET 

    McCabe of AFS said the current muscle car program could be extended beyond 2023 while production of electric versions begins in the United States. 

    CAR’s Dziczek said Brampton could still receive an investment for EV production.  “There are only so many open spaces in the Stellantis North American orbit where they can retool and make those,” she said. 

    This is not the first time that the future of a Canadian assembly plant has been scrutinized in recent years. 

    Last year, AFS said Ford Motor's Oakville Assembly would no longer build the Ford Edge and Lincoln Nautilus crossovers beyond their current life cycles, leaving the plant with no long-term product mandate. Later that year, Ford and Unifor agreed to a $1.8-billion investment in Oakville to build EVs this decade. 

    General Motors’ Oshawa Assembly, meanwhile, had been singled out by many as a candidate for closure for years leading up to the end of vehicle assembly there in 2019. GM stopped production there as it scaled back on excess capacity globally, though the automaker plans to resume pickup assembly this year after a $1-billion investment. 

    The situation at Brampton is more reminiscent of Oakville “because we are moving or terminating a product on that platform with no successor,” McCabe said. 

    “But Brampton needs either an extension of the current platform that’s paid for already or something brand new.” 

    BARRIERS CAN BE ‘OVERCOME’ 

    Challenges Brampton faces include its location in the rapidly growing Toronto suburb, which makes it slower to ship parts in and vehicles out because of rising traffic congestion. The plant also sits on prime real estate in a region in need of new housing, meaning Stellantis could receive a lucrative payday by selling the property.  

    “It has a number of challenges to overcome, but it doesn’t mean they can’t overcome them,” Dziczek said. “It all comes down to what the union and the province and the feds are willing to do to get something in Brampton.” 

    A spokeswoman for the Ontario government said in a statement it is “committed to supporting the workers at the Stellantis Brampton plant” and “working with the company on a path forward.” 

    Similarly, a spokesman for the federal government said it was “aware” of Stellantis’ electrification plans and said it continues “to engage with the industry and labour.” 

    ‘A GOOD PLANT’ 

    In recent years, the federal and Ontario governments have signaled a willingness to boost incentives for investments in EV production. For instance, the governments committed to spend $590 million for Ford’s Oakville investment, accounting for nearly one-third of the project’s total cost. 

    “One thing we’ve seen over the last couple of years is the Ontario government and the federal government are all willing to take steps to ensure that mandates come here and stay here,” said Rob Wildeboer, chairman of Toronto-based supplier Martinrea International Inc. and co-chair of the Canadian Automotive Partnership Council, which encompasses representatives from Canadian automakers, suppliers, governments and labour. 

    “It’s very expensive to shutter a plant, and the only time to do it is when your volumes really decrease,” said Wildeboer, whose company supplies the Brampton plant. “I don’t see volume decreasing. It’s a good plant.”

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