The Ontario government will offer auto giant Stellantis more money to keep it from abandoning construction of a multi-billion-dollar battery manufacturing facility in Windsor, Premier Doug Ford said on Friday.
The premier's comments on Friday were the first indication publicly from the provincial government that it was willing to up its ante to ensure the world’s fourth-largest automaker finishes and operates its north-of-the-border electric-vehicle plant.
Since last Friday, the governments of Ontario and Canada have been jockeying over how to keep the maker of auto brands that include Dodge, Jeep and Chrysler from pulling out of their agreement from March 2022.
At the time, the deal was heralded by the Ontario government as “the largest automotive manufacturing investment in the history of the province.”
The plan was for Stellantis and LG Energy Solution, its battery-making partner, to invest $5 billion to build a plant — later announced as under the NextStar Energy Inc. name — to support the auto manufacturer’s fleet of electric vehicles.
Originally, the companies were promised $529 million in support from the federal government and up to $513 million from the Ontario government.
The governments and companies promised the NextStar electric battery plant would begin production in the first quarter of 2024 and be fully operational by 2025.
It was planned that the facility would produce lithium-ion battery cells and modules “to meet a significant portion of Stellantis’ vehicle production” in North America, a March 2022 press release from the companies said.
Construction of the NextStar facility has been underway, but was stalled this week.
As the Toronto Star first reported about a week ago, the federal government was forced into renegotiations with Stellantis over fears it could abandon its plans for Windsor if it didn’t receive more than the $1-billion-plus promised to it back in March 2022.
Stellantis and LG Energy Solution want government funding that’s effectively in line with what Volkswagen’s been promised to support a $7-billion EV plant of its own in St. Thomas.
To secure Volkswagen’s facility, the province promised it up to $500 million in direct funding, while the federal government will pay it up to $13 billion — an amount meant to compete with what the German automaker would have benefited from south of the border under the new U.S. Inflation Reduction Act (IRA).
While Stellantis and LG Energy Solution’s agreement with the governments of Ontario and Canada was reached a few months before the IRA’s passage, the companies want funding that’d compete with how they’d now be compensated in the U.S.
Over the last week, a ping-ponging blame game between the provincial and federal governments has been a sideshow to their attempts to satisfy the companies behind the NextStar facility to ensure its continuation.
Midway through the week Prime Minister Justin Trudeau met with LG Energy Solution’s CEO whilst in Japan for the G7 summit.
Then, on Friday, Ford budged, saying in response to a reporter’s question that the Ontario government will offer more from its taxpayer-funded budget to keep the companies from taking their investment elsewhere.
“I will confirm we're putting more money on the table there," Ford said at an unrelated announcement in St. Catharines. "This is all about saving jobs, and giving people the quality of life they deserve in southwestern Ontario."
Having peppered the Ford government with questions all week about the status of the facility in Windsor, leaders of the parties in opposition in Ontario each signaled sighs of relief in statements following the premier’s comments.
“The Stellantis plant is of huge importance to the Windsor-Essex community, and it will be a massive relief to workers when they can be confident that these good paying union jobs are coming to the region,” NDP and official Opposition Leader Marit Stiles said. “Now let's make sure this deal is done.”
“It’s a good sign from the people of Windsor that the premier has changed his tune and is now back at the table,” interim Liberal leader John Fraser said.
“We need all levels of government to step up and commit to working together to protect this deal for the Windsor community – and this announcement is a tentative first step,” Green Leader Mike Schreiner said.
This story was updated at 4:43 p.m. on Friday, May 19.
