Stellantis considering Ottawa’s enriched subsidy offer as Windsor EV plant hangs in the balance

Officials from Stellantis and LG Energy Solution are poring over an enhanced subsidy deal from Ottawa designed to save a 2,500-worker Windsor electric-vehicle factory from being moved to the U.S.

“Stellantis and LGES are in receipt of a written offer that is currently under financial and legal review,” Stellantis Canada communications head LouAnn Gosselin told the Star.

“We have nothing further to add at this time,” said Gosselin.

Stellantis is the parent company of Chrysler, Jeep and Fiat, among other automotive marques.

After the Star last week reported a tentative resolution to spare the $5-billion factory, Premier Doug Ford confirmed that Queen’s Park would cover one-third of billions of dollars in Stellantis subsidies.

Federal Industry Minister François-Philippe Champagne said that left him “confident” Canada had an offer that will be acceptable to the auto giant.

Sources, speaking confidentially in order to discuss internal deliberations, said Champagne delivered the enriched offer to Stellantis last Friday.

“We put more money on the table. We’re in for one-third of the cost. We’ve stepped up in a huge, huge way,” Ford said last week in Kingsville near Windsor.

His comments came after Stellantis halted construction of its joint venture with Korea-based LGES on May 15.

The European auto giant might receive even more than the up to $13.2 billion in subsidies that Volkswagen will get to build a similar EV “gigafactory” in St. Thomas near London.

That suggests Ontario taxpayers could be on the hook for more than $4 billion in payments to Stellantis — far more than the $500 million the province promised in March 2022 for a factory slated to open next year.

“This is the federal government’s deal and we’re there to support them. We’re putting more money up and I think we’re about that close from getting it done,” noted Ford, holding up his index finger and thumb.

“I know everyone’s anxious for the deal — and I am as well. I know it’s been a roller coaster.”

Champagne told the Star last week that he was “at the forefront of” a verbal presentation to the Stellantis board in Paris on May 31.

But he declined to say whether the directors expressed any satisfaction with the his offer, stressing “it would not be smart for me to negotiate in public.”

Sources said the premier’s assurance Ontario would cover one-third of the subsidies — and his rapport with Deputy Prime Minister Chrystia Freeland, who is also finance minister — cleared the logjam to a final offer to Stellantis.

Ford confirmed that he was on the phone with Freeland and other federal and provincial officials until 2 a.m. Wednesday — hours before Champagne’s presentation to the Stellantis board.

“This is a record for Chrystia and I — during the pandemic we’d be up at (midnight) talking to each other,” he said.

That’s a reference to the close partnership the two politicians developed at the height of the COVID-19 crisis.

Despite payouts that could affect whether provincial Finance Minister Peter Bethlenfalvy balances the budget in time for the 2026 election, Ford said the outlay of public cash is worth it.

“I look at it as an investment … The spinoff jobs are staggering, absolutely staggering … this is for decades, moving forward and giving people certainty and stability,” he said.

The intervention by Ottawa and Queen’s Park should also secure the future of Stellantis’s Brampton auto assembly plant.

As first revealed by the Star on May 12, the Stellantis-LGES plant could be lured stateside by U.S. President Joe Biden’s lucrative subsidies in the Inflation Reduction Act.

In order to attract the Volkswagen EV battery plant to St. Thomas, Ottawa matched those subsidies, guaranteeing the German-based automaker between $8 billion and $13.2 billion in federal cash, depending upon the number of batteries it makes.

Ford’s government gave $500 million to Volkswagen, which will employ 3,000 workers when its $7-billion plant opens in 2027. That money, its initial Stellantis payout, is to cover the cost of infrastructure such as roads.

While Stellantis is only slated 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, triggering the subsidies sooner.

Biden’s subsidies pay automakers between $2,700 and $4,500 (U.S.) for each EV battery manufactured stateside.

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