Stellantis Close To An Agreement To Resume Construction Of Windsor Gigafactory

Ontario Premier Doug Ford has expressed his belief that the fate of Stellantis’s electric battery plant in Windsor, Ontario, now rests in the hands of the federal government. Ford’s statement follows the province’s offer of additional financial support in an effort to salvage the deal after Stellantis halted construction, citing unfulfilled commitments from the federal government.

The $5 billion joint venture between Stellantis and LG Energy Solutions was announced last year and aimed to create 2,500 jobs in Windsor, a renowned vehicle manufacturing hub. The project received financial support from all levels of government, although the specific amounts have not been disclosed.

However, Stellantis and LG Energy Solutions wrote to Prime Minister Justin Trudeau last month, alleging that the federal government had failed to deliver on its commitment to match production incentives under the United States Inflation Reduction Act (IRA). The CEOs of the companies claimed that Ottawa had confirmed this agreement in writing five times, but the promised support had not materialized.

While Federal Science and Industry Minister François-Philippe Champagne expressed confidence in reaching a resolution, he urged the Ontario government to contribute its fair share. Premier Ford countered by stating that the province had not been involved in the federal government’s production incentive discussions. However, Ontario had signed its own agreement with Stellantis, pledging a $500 million capital contribution, which mirrored the commitment to Volkswagen for a separate electric vehicle battery plant in St. Thomas.

To prevent the withdrawal of Stellantis and LG Energy Solutions from the project, Premier Ford announced an increased financial offer from the provincial government on Friday. Subsequently, Minister Champagne confirmed that progress was being made in discussions with Stellantis.

When questioned about the potential precedent set by providing additional funds, Premier Ford emphasized that it was an essential step in fostering economic development. He cited the positive impact such initiatives had on communities like Windsor and St. Thomas, which experienced economic challenges prior to his administration.

Minister Champagne clarified that negotiations with Stellantis and Volkswagen had been conducted in parallel, with talks with Stellantis potentially beginning even before those with Volkswagen. The federal government had offered Volkswagen a $700 million capital contribution and up to $13 billion in production subsidies over the first decade to match production tax credits provided under the IRA.

Meanwhile, the Ontario government continues to prioritize the development of the electric vehicle industry. In an announcement in London on Wednesday, $4.7 million in funding was allocated to support a new job placement program and provide classroom and shop training for workers seeking to acquire the skills necessary for transitioning into the electric vehicle sector.

As the negotiations unfold, the federal and provincial governments are striving to find a resolution that will secure the future of the Stellantis electric battery plant in Windsor and ensure the creation of thousands of jobs in southwestern Ontario.

Source: Global News