Stellantis says it awaits ‘official answer’ from Ottawa following report of tentative deal to save EV plant
Auto giant Stellantis says it is still awaiting a formal offer from the federal government in order to keep its massive new battery factory in Windsor.
The Star reported Wednesday that Prime Minister Justin Trudeau and Premier Doug Ford reached a tentative deal on subsidies to ensure the plant's survival.
But the parent company of Chrysler, Jeep and Fiat said Thursday it has not received anything in writing from Ottawa.
Stellantis doesn't confirm what has been reported and hasn't yet received any official answer to its letters," said Stellantis Canada communications head LouAnn Gosselin.
Sources, speaking confidentially in order to discuss the negotiations, said Ford told his federal counterparts early Wednesday morning that his government would step up" to ensure Stellantis doesn't relocate the EV facilities to the U.S.
Premier Ford has been extremely clear that the province is prepared to assist the feds financially in closing their deal with Stellantis," Ontario Economic Development Minister Vic Fedeli confirmed to reporters Thursday at Queen's Park.
We're getting there, but we urge the feds, this is the feds that need to close their deal with Stellantis."
Insiders say the premier's assurance - and his personal rapport with Deputy Prime Minister Chrystia Freeland, who is also finance minister - cleared a major hurdle to a final agreement with Stellantis.
Ford was on the phone with Freeland until 2 a.m. Wednesday - a discussion coming ahead of the company's board of directors meeting that day in Paris.
But after the Star published its story on Wednesday afternoon, top federal and provincial officials stressed details were still being hammered out and it's premature" because there's a bit more work to do."
The provisional accord could be worth more than $13 billion in subsidies, meaning Stellantis may receive even more Canadian tax dollars than Volkswagen is getting to build a similar electric-vehicle gigafactory" in St. Thomas, Ont., near London.
But the intervention by Ottawa and Queen's Park should also secure the future of Stellantis's Brampton auto assembly plant.
Stellantis halted construction of its Windsor project, a $5-billion joint venture with Korea-based LG Energy Solution, on May 15.
It is supposed to employ 2,500 workers when it opens next year.
The Star revealed the international firm could be lured stateside by U.S. President Joe Biden's generous subsidies in the Inflation Reduction Act.
Industry Minister Francois-Philippe Champagne confirmed Wednesday that we're getting closer to the end of the negotiation."
I would say everyone should take a deep breath. Things are going well," Champagne told reporters in Ottawa.
We will get to a deal. I'm very confident. That's why I say discussions are progressing."
A senior federal government official said Ontario had moved significantly and was now prepared to contribute billions to the final offer.
Officials at Queen's Park declined to comment, but Ford, who will be in Kingsville, Ont., near Windsor on Thursday afternoon, has previously confirmed he would increase the $500-million subsidy the province had already given Stellantis.
Details on the timing and the amounts of funding from each level of government were still being finalized Thursday morning.
As part of a major concession, Ontario is to pay a big chunk" of the production incentives to Stellantis. That could be between one-quarter and one-third with Ottawa footing the rest of the tab.
In contrast, the province gave $500 million to Volkswagen, which will employ 3,000 workers when its $7-billion plant opens in 2027.
That provincial money, like the initial Stellantis payout, is to cover the cost of building infrastructure such as roads and sewers.
Volkswagen could get between $8 billion and $13.2 billion in federal cash depending upon the number of batteries it makes.
Even though Stellantis will make 400,000 EV batteries a year in Windsor - compared to VW's one million annually in St. Thomas - it could receive even greater subsidies.
That's because Stellantis will begin manufacturing battery modules three years earlier, which triggers the subsidies sooner.
Champagne emphasized that Ottawa's 2022 fall economic statement said that we would level the playing field with the battery manufacturers" so that Canada would be competitive with the U.S. for companies to locate their EV factories here.
Canadian governments are scrambling to match Biden's subsidies, which pay automakers between $2,700 and $4,500 (U.S.) for each EV battery manufactured stateside, or risk factories moving south.
Robert Benzie is the Star's Queen's Park bureau chief and a reporter covering Ontario politics. Follow him on Twitter: @robertbenzie
Tonda MacCharles is Ottawa Bureau Chief and a senior reporter covering federal politics. Follow her on Twitter: @tondamacc
Rob Ferguson is a Toronto-based reporter covering Ontario politics for the Star. Follow him on Twitter: @robferguson1