:format(webp)/https://www.thestar.com/content/dam/thestar/politics/provincial/2023/05/29/stellantis-makes-counter-offer-to-ottawa-to-salvage-ev-battery-plant-deal/stellantis.jpg?w=1920&resize=1920,0&ssl=1 "Stellantis Counteroffers Ottawa to Save EV Battery Plant Deal")
Stellantis has countered on federal subsidies as Ottawa fights to save a Windsor electric vehicle battery plant that is supposed to employ 2,500 people, the Star has learned.
Sources close to the negotiations, speaking confidentially to discuss internal deliberations, said Stellantis, the parent company of Chrysler, Jeep and Fiat, has moderated its demands for more public money for its joint venture with LG Energy Solution.
With a $5 billion electric vehicle battery factory and thousands of jobs at stake, Prime Minister Justin Trudeau and Prime Minister Doug Ford are desperately trying to prevent the project from relocating to America to take advantage of heavy US subsidies. .
If a deal can be reached, it would still mean billions more dollars from the federal and provincial governments, which provided $500 million each to Stellantis in March 2022.
But that was before US President Joe Biden’s $369 billion Cut Inflation Act, which was designed to entice companies to build clean energy projects and electric vehicles.
Ottawa matched those American-style production credits to ensure that Volkswagen would build an even bigger $7 billion “gigafactory” on St. Thomas, which will employ 3,000 people when it opens in 2027.
Ultimately, VW could get $13.2 billion in public subsidies, depending on how many batteries it makes.
When asked about the revised proposal that was made over the weekend, Stellantis Canada spokeswoman LouAnn Gosselin said only: “We are not commenting at this time.”
The Star reported Friday that talks were stalled after the latest federal proposal fell short of what the auto giant was seeking.
On Monday, NDP leader Jagmeet Singh challenged Deputy Prime Minister Chrystia Freeland in the House of Commons.
“There are 2,500 jobs at stake and it is the future of our country’s automotive sector,” Singh said. “Will the government make sure those jobs don’t end up going to the US and instead we keep those jobs here in Canada and do everything we can to keep this deal going?”
“Absolutely yes, we will make sure the deal goes forward,” Freeland responded.
“We will make sure that jobs stay in Canada. That is why we have a $120 billion clean economy plan,” he said, adding that Ottawa is “going to ensure that Ontario pays its fair share because this is an investment in a particular province.”
A spokesman for Industry Minister François-Philippe Champagne said the government is in “active” talks with Stellantis and will not negotiate publicly.
Ford said last week that his government had increased its initial contribution of a $500 million subsidy to the auto giant, but declined to specifically discuss the provincial subsidies on offer.
In Queen’s Park on Monday, Economic Development Minister Vic Fedeli, who has just returned from a trade mission to Germany where he met executives from VW and Mercedes-Benz, stressed that his sales pitch to European carmakers is stability.
“What we heard everywhere was consistent. In this turbulent world, post-pandemic, Russian (Ukrainian) invasion, Chinese-dominated supply chains, everyone sees Ontario as a sea of calm, a stable, trustworthy and trustworthy partner,” he said. fedeli.
“They also see Ontario as a safe jurisdiction – safe for their employees, safe for their families, safe for their executives to visit. We show them that Ontario is all of that and more,” she said.
Pressure is mounting on politicians in Ottawa and in Queen’s Park to save the factory.
Brian Kingston, director of the Canadian Association of Vehicle Manufacturers, visited the Windsor site after Stellantis halted construction two weeks ago.
The bones of the plant are built, with a roof on top, but it’s still a shell with no walls, and Kingston cautioned that the company is serious about evaluating its options for moving.
“The ball is in the government’s court. Canada must compete with the United States if we are to play a role in the electric vehicle battery supply chain. The situation is critical and each day that passes puts the investment at greater risk, ”he said.
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