Media off the grid in talks on Windsor EV battery plant

May 27, 2023
  • A breaking news story says the Windsor EV battery plant is in jeopardy, that Ottawa’s offer to bump-start the now-suspended project has been rebuffed by its joint venture owners, Stellantis NV and LG Energy Solution.

In familiar #CanadianMediaFailed style, the Toronto Star and others want you to think the project is on the brink, headed for a USA destination.

The paper refuses to grapple with the mammoth economic implications of the project or research the history of the main actors involved.

But the numbers at stake are GDP-level huge, too massive for Ontario or Ottawa to abandon.

Perhaps the investment-fund-owned right-of-centre TorStar knows it has an issue it can easily exaggerate for click effect.

Cynically downplaying the long-established presence of Stellantis in Windsor and the implications of the EV initiative on the financial health of Ontario gave the publisher the opportunity to post an ominous headline at the expense of the Trudeau Liberals.

Job suspended at Stellantis Windsor.

Stellantis shut down construction on the plant May 15, saying it wanted the same deal offered to Volkswagen for its battery-making operation in St. Thomas.

First, to suggest Stellantis is holding Ottawa and Ontario for ransom is overstatement. The company has obligations to shareholders to maximize its margins; if it receives a better offer in the U.S., it is obliged to take it.

Tellingly, the media has withheld from its coverage the fact that Stellantis, although headquartered in Amsterdam, Netherlands, is Windsor’s largest employer.

Stellantis has had Windsor in its DNA for almost a century.

Stellantis is not a parts manufacturer, it is an automaker created by a merger of Fiat Chrysler Automobiles and France’s Peugeot SA in 2021. But those who live in the region recognize Stellantis as the successor of the company formerly known as Chrysler, which began operations in the area in 1925.

For almost a hundred years, then, it has employed generations of Windsor workers at its facilities.

Second, these aren’t $200 Crappy Tire batteries suitable for soon-to-be-obsolete, gas-fired vehicles.

They carry price tags as high as $20,000. Production estimates at Windsor/St. Thomas top 1.4 million units annually. Even at $10,000 apiece, that’s $14 billion.

A quick Google search indicates the price of an electric car battery can run between $4,000 to $20,000 (USD). The Windsor plant will turn out 400,000 units annually.

EV batteries aren’t off-the-shelf items at Canadian Tire.

Calculated at an average midpoint price of $12,000 per unit, it translates into a staggering $4.8 billion in gross sales per year at Stellantis/LG Windsor alone. Trudeau’s 5% GST take on the sale of those batteries would be $240 million; Ford’s 8% PST would reap $384 million annually.

The dustup over who is shelling out sufficient subsidies will no doubt test the maxim that “politics is the art of the possible,” that sensible pragmatism, not idealism and purity, leads to achievable goals in the real world.

It might mean Ottawa will have to allow Ontario to mine lithium from the Ring of Fire and maybe cancel some environmental impact studies into Premier Doug Ford’s contentious highway plans.

Here is the March 23, 2022 press release from the joint venture’s plan  for the country’s first large-scale, domestic, EV battery manufacturing facility:

“Volkswagen will become the sixth original equipment manufacturer (OEM) to locate a production facility in Ontario, unmatched by any other jurisdiction in North America. Those companies also represent six of the seven largest automakers in the world.”

Sounds like a corporation with a stake in the neighbourhood, a firm with roots in what locals call Windsor-Essex.

Consider this as a more consequential backstory: The current Ford-Trudeau cha-cha-cha will turn into a breakdance around environmental impact studies on the Ring of Fire and – wait for it – Highway 413.

Trudeau-Ford breakdance over the Ring of Fire might spin out onto Hwy. 413.

If Ford can link the EV plants to parts suppliers from Windsor to Quebec needing to bypass Highways 401 and 407, Trudeau may feel compelled to not only help the province in any Ring of Fire environmental assessments, but jump-start Highway 413 to help get auto parts out of GTA traffic.

Torontonians tend to forget Chrysler Stellantis has a Brampton assembly plant only 26 miles from the Bay Street skyscrapers. Many jobs in the GTA rely on selling parts to Stellantis in its Brampton plant.

So count on Backroom Doug Ford to try to leverage a free pass on highway environmental impact studies. A PM with a creepy habit of gladhanding with the transactional Ford also has an interest in building EV plants on the Canadian side of the Ambassador Bridge.

Assembling cars close to Toronto gridlock might prompt more highway approvals.

But it means the QC-based PM might have to sacrifice his environment minister on the altar of the economy of the Windsor-Quebec City corridor on this one.

Quebec’s automotive manufacturing industry employed an estimated 10,719 workers across 68 businesses, based on a 2018 study. The province is home to bus assembly plants that employed an estimated 2,900 workers, and independent parts suppliers in Quebec employ nearly 8,000 workers. Prevost Car in Ste.-Claire has made buses for the US president.

A joint venture’s press release from 14 months ago affirms the viability of the deals:

“Stellantis and LG today announced they have executed binding, definitive agreements to establish the first large-scale, domestic, electric vehicle battery manufacturing facility in Canada. The joint venture company will produce leading edge lithium-ion battery cells and modules to meet a significant portion of Stellantis’ vehicle production requirements in North America.

“The joint venture company will invest over $5 billion CAD ($4.1 billion USD) to establish operations, which will include an all-new battery manufacturing plant located in Windsor, Ontario. Plant construction activities are scheduled to begin later this year with production operations planned to launch in the first quarter of 2024.”

Added the Windsor mayor:

“With this announcement, we are securing the future for thousands more local workers and securing Windsor’s strategic location as the home of Canada’s electric vehicle future. As the world pivots to EVs, Windsor will soon be home to the battery manufacturing facility that powers it all.”

Doug Ford meanwhile continues his passive-aggressive routine, putting heat on the Liberals in recent press events. But then no leader is better than Doug the Shirker at demanding other jurisdictions bear responsibility for the issues of the day.

Ford, characteristically, criticizes Ottawa while showering it with praise:

“And we need the federal government to come to the table and show their support like they have all along. They have been great partners, by the way, in every deal that we have made.”

Ontario gave Volkswagen and Stellantis $500 million each, (while teachers and healthcare workers sat in stunned silence).

“You know, that is going to be up to the federal government. But we are competing against the IRA [the US Inflation Reduction Act] supported by the federal US government,” said Ford. “We don’t have the bandwidth to compete against the US federal government.”

Then both a shot and flowers for Trudeau:

We don’t have the printing press, like the federal government does. They need to step up like they have. And they have been great partners — I have said this three times — they need to step up and commit to the promise they gave to the people of Windsor. It’s as simple as that.”

Nevertheless, confusion over who will drag the stalled Stellantis/LG project over the finish line remains.

Stellantis also announced a sweetener in its 2022 annual report, the establishment of a Automotive Research and Development Centre in Windsor, employing 650 people, “to establish a battery lab developing and validating vehicle cells, modules and battery packs.”

Auto R&D at Windsor.

It is further substantiation that Trudeau will not leave the table without closing this deal. No way this doesn’t come to fruition.

Robert Lee

Meet Robert. He is a former veteran news reporter/magazine editor incensed at how the North American media props up buffoons like Trump & Ford. Time to put "comfort the afflicted and afflict the comfortable" back into the newsroom's Mission Statement.

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