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Stellantis says Ottawa reneged on Windsor EV battery plant deal, moving to 'contingency plans'

The site of the new EV battery plant in Windsor is under heavy construction. The plant is due to open in 2024.  (Jennifer La Grassa/CBC - image credit)
The site of the new EV battery plant in Windsor is under heavy construction. The plant is due to open in 2024. (Jennifer La Grassa/CBC - image credit)

Stellantis is accusing Ottawa of reneging on an agreement regarding the upcoming multibillion-dollar electric vehicle battery plant in Windsor, Ont., and the automaker says action is being taken.

"As of today, the Canadian government has not delivered on what was agreed to, therefore Stellantis and LG Energy Solution will immediately begin implementing their contingency plans," said LouAnn Gosselin, the company's head of communications for Canada, in a statement on Friday evening.

Gosselin wouldn't elaborate on what those contingency plans entail.

The Toronto Star reported Friday afternoon that there were fears the company would pull out of the project if the provincial and federal governments didn't hand over more money. This comes after Ottawa offered Volkswagen about $13 billion in production subsidies to build a new plant near St. Thomas, Ont.

No danger despite 'bump' in negotiations: source

Windsor Mayor Drew Dilkens says his team is "all hands on deck" to gather information on the situation, and will keep monitoring developments.

"We are hopeful and confident reasonable minds will prevail to make the deal a reality," he said in a statement Friday.

Earlier on Friday, a government source said there was merely a "bump" in negotiations, and that there's no real danger of the company stopping the project.

The source close to the matter, who spoke to CBC News on the condition that they not be named, told CBC Windsor there's no reason to panic and that the Windsor plant, which will mean thousands of jobs for Windsor-Essex, is still moving forward.

LISTEN | Volkswagen EV battery plant in Ontario gets billions in subsidies:

Chrystia Freeland, minister of finance, also said earlier on Friday that Ottawa is working "very, very hard" on Stellantis negotiations.

"We are very focused on it," she said Friday. "We understand the value of this investment in Canada."

Freeland said the federal government "expect[s] provinces to do their part to attract investment."

Flavio Volpe, president of the Automotive Parts Manufacturers' Association, said he's not worried.

"This Stellantis deal underpins two 5,000 job auto plants, a 2,500 job EV battery plant and a 650-person [research and development] headquarters," he tweeted.

"It's a super footprint that's globally competitive and has 20,000 supplier jobs attached. This will get done — I am not worried — and we will continue growing in Canada."

Mike Evans/CBC
Mike Evans/CBC

Negotiations continue, industry minister's office says

Windsor's EV battery plant is already under construction. It will employ about 2,500 people when it opens next year.

Volkswagen will begin production in St. Thomas in 2027. The number of jobs that will result is still unknown, but industry leaders say it could be in the thousands. The manufacturer calls the plant its first overseas "gigafactory" for battery cell manufacturing.

A spokesperson for François-Philippe Champagne, Canada's minister of innovation, science and industry, says negotiations continue.

"The auto industry is crucial to the Canadian economy and to the hundreds of thousands of Canadian workers in this sector. That's why Minister Champagne has worked tirelessly to secure the future of Canada's auto industry," his office said in an email.

"We continue to negotiate in good faith with our partners. Our top priority is and remains getting the best deal for Canadians."