How retooling Ontario assembly plants to build EVs will mean 'a lot of job loss'

Two auto parts plant closures in Ingersoll, Ont., and hundreds of job losses at other suppliers of General Motors’ CAMI Assembly plant could be just the beginning as Canadian vehicle plants transition to building electrified products.

“This is a microcosm of the challenges that we are going to face moving ahead,” Angelo DiCaro, director of research at Unifor, said at Electric Mobility Canada’s recent EV2021VÉ virtual conference.

The retooling at CAMI to build BrightDrop electric vans, scheduled to begin in April 2022, is the culmination of a years-long effort by the union, which represents the Detroit Three in Canada, and other industry stakeholders to secure EV programs for Ontario’s assembly plants. By mid-decade, Ford Motor Co.’s Oakville Assembly Plant and Stellantis’ Windsor Assembly Plant are also poised to be building EVs or hybrids.

The shift will ensure that the province’s auto sector remains an integral part of the wider industry, advocates say. But the longevity will come at a short-term cost.

“The simple reality is there’s going to be a lot of job loss,” Unifor national President Jerry Dias told Automotive News Canada, pointing to supply chain fallout around CAMI.

‘NO WAY AROUND THIS’

The stark difference between the incoming BrightDrop vans and the Chevrolet Equinox crossovers currently rolling off the CAMI line in Ingersoll means there is “no way around this,” Dias said. Parts suppliers that build powertrain components — from timing belts to exhaust systems — are likely to be hardest hit, he said.

Butcher Engineering Enterprises Ltd., part of the Windsor-based Spencer Butcher Group of Cos., assembles front-end modules for CAMI, consisting of the transmission, engine, radiator and other key components. Without new business, Dias said, the plant will close next year, putting 350 union members out of work.

In a statement, Butcher Engineering said it continues to look for new business opportunities, but they have been tough to find.

“The situation we are in is unfortunate and also out of our control,” the company said.

Butcher Engineering plans to maintain an engineering presence in Ingersoll and pursue possible upcoming contracts but barring further developments will close and vacate its assembly plant when Equinox production ends next spring.

A Martinrea International Inc. plant that makes suspension modules for the Equinox in Ingersoll is also threatened by the impending shift, said Dias. The plant employs more than 60 Unifor members.

Martinrea did not return requests for comment.

Unifor estimates that at least 700 of its members will lose their jobs because of cutbacks at parts plants that supply CAMI. Nonunion shops will face similar challenges, Dias said.

A six-month retooling at CAMI will follow the end of Equinox production in April. GM plans to begin assembling the BrightDrop EV600 at the plant in November 2022, followed by the smaller EV410 in 2023.

FEWER PARTS, FEWER JOBS

Along with GM’s commitment of about $1 billion to convert CAMI, Ford and Stellantis last fall announced Ontario investments totaling more than $3 billion in their respective operations in Oakville and Windsor. Unifor expects cutbacks to ripple through the supply chain as each Canadian plant transitions to EVs.

Because EVs require fewer powertrain components than gasoline or diesel vehicles, some parts suppliers will inevitably be shaken out, said Brendan Sweeney, managing director of the Trillium Network for Advanced Manufacturing in London, Ont., which promotes manufacturing in the province.

Because the transition to new EVs or hybrids in Oakville and Windsor from each plant’s current products is likely to be easier than CAMI’s transition from SUVs to commercial vans, changes to the supply base may be easier as well, Sweeney said.

In Oakville, for instance, he sees Ford replacing the Edge crossover with an electric SUV with two or three rows of seats. This compares to CAMI’s assembly line transitioning from the five-seat Equinox to the single-seat EV600, which is vastly different on the inside and out.

Volumes are the other part of the equation. Sweeney expects a slow ramp-up in van production at CAMI, compared with higher initial output of EVs at Ford’s plant just west of Toronto. GM has not shared planned BrightDrop production figures.

LOOKING LONG TERM

Though it has tallied union job losses in the CAMI supply chain, Unifor said it is too early to quantify how many total parts jobs Ontario might lose because of assembly plants shifting to EVs. In pre-pandemic 2019, parts suppliers employed 89,000 in Canada, according to the Trillium Network.

Dias said he is sensitive to the impending layoffs in the parts industry, but the move to EVs will strengthen the province’s auto industry in the long run.

“It’s about recognizing where global consumer demand is going and getting on board,” he said, “because the countries that fail to adapt will end up with no industry.”

Despite the fate of Butcher Engineering’s Ingersoll site, Nebe Tamburro, president of Spencer Butcher as well as a partner in the business, agrees that Ontario’s auto industry must reorient itself toward EVs. CAMI’s securing of a new electric product from GM should ultimately prove positive for Ingersoll, said Tamburro.

“Long term, I think that will create opportunity for people, obviously, in the same neck of the woods where our plant is,” he said. “It’s just unfortunate timing wise that we can’t line the stars up to specifically align the people that we have to be working for that.”

To help suppliers make up lost ground, Unifor and other industry stakeholders, such as the Ontario government, want to establish a made-in-Canada battery supply chain that runs from mining raw materials, to building battery cells, to bolting finished batteries into vehicles at Ontario assembly plants. With cutbacks around CAMI already under way, however, the industry must act now, said Unifor’s DiCaro.

“If we don’t start putting plans into action to leverage the growth of productive capacity all across the supply chain,” he said, “we’d be forced to watch good-paying auto parts jobs, good-paying union jobs, transition to low-paid service sector jobs.”