Stellantis halts construction on Windsor, Ontario, EV battery plant amid Fed dispute IG News

IG news Update,

One of the world’s biggest automakers said Monday it has halted construction on a $5 billion electric vehicle battery plant in Windsor, Ontario, saying the federal government has not kept what it promised .

The news prompted the Premier of Ontario to implore Ottawa to complete the deal.

Stellantis, which makes Chrysler, Ram and Fiat cars among others, and South Korean battery maker LG Energy Solutions announced the plant last year and said it expected to create 2,500 jobs.

All levels of government were to provide financial support. While the amounts were not disclosed at the time, Stellantis now says the federal government hasn’t held up its end of the bargain.

“As of today, the Canadian government has not given consent, so Stellantis and LG Energy Solutions will begin implementing their contingency plans,” the company said in a statement.

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“Effective immediately, all manufacturing related to battery module production at the Windsor site has ceased.”

The federal government says talks are ongoing. The matter came up during Question Hour in the House of Commons on Monday.

“We’re going to fight for the best deal for Canada,” said Deputy Prime Minister Chrystia Freeland.

Ontario Premier Doug Ford said the federal government needed to support Stellantis in the same way it did Volkswagen. A recently announced deal with that company to build an electric vehicle battery plant in St. Thomas, Ontario, includes up to $13 billion in subsidies and $700 million in grants.

“It really worries me,” Ford said after an unrelated announcement in Mississauga, Ont. “We need the federal government to come to the table and show their support like they have with everyone.”

The province committed $500 million to both deals, Ford said, and is ensuring roads and energy for the plant.

“We will go toe-to-toe with any state in the United States of America,” he said. “The only thing we can’t do is go toe-to-toe with the US federal government. It’s the Canadian federal government’s job, and they can do it. We believe they promised the people of Windsor – I was there with the Prime Minister – now he needs to keep his promise to the people of Windsor.”

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The federal subsidy to Volkswagen was intended to allow Canada to compete with the United States, where the Inflation Reduction Act added production subsidies for batteries.

On the provincial side, Vic Fedelli, Ontario’s minister of economic development, said what the US can offer is “out of our league.”

“We’re involved in capital dollars for Stellantis, so the Fed, by the way, as we’ve been partners, about 50-50 partners all the way down the line,” he said.

“But on operating expenses, this IRA that the federal government and the states have, it’s up to the federal government to match them. They’ve made commitments to Volkswagen, they’ve made commitments to Stellantis and we expect them to honor those commitments.” hope to do.”

The Canadian Taxpayers Federation said the government should reject Stellantis’ demands.

“If you hand over billions of dollars of taxpayer cash to one auto company, surely others will follow,” CTF Ontario director Jay Goldberg said in a statement.

“Taxpayers can’t afford to throw money at every company under the sun and Ottawa needs to say no before they waste billions.”

Ford’s arguments for the federal government echo those of the mayor of Windsor and Unifor, Canada’s largest private sector union, over the weekend.

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– With files from Mia Rabson in Ottawa

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