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Stellantis makes counter-offer to Ottawa to salvage EV battery plant deal


Stellantis has made a counter offer on federal subsidies as Ottawa scrambles to salvage a Windsor EV battery plant that is supposed to employ 2,500 people, the Star has learned.

Sources close to the negotiations, speaking confidentially in order to discuss internal deliberations, said Stellantis — parent company of Chrysler, Jeep and Fiat — has tempered 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 hanging in the balance, Prime Minister Justin Trudeau and Premier Doug Ford are desperately trying to prevent the project from being relocated stateside to take advantage of hefty U.S. subsidies.

If a settlement can be reached, it would still mean billions of dollars more from the federal and provincial governments, which provided $500 million each to Stellantis in March 2022.

But that was before U.S. President Joe Biden’s $369-billion Inflation Reduction Act, which was designed to lure companies to build clean energy and EV projects.

Ottawa matched those U.S.-style production credits to ensure Volkswagen would build an even larger $7-billion “gigafactory” in St. Thomas, which will employ 3,000 people when it opens in 2027.

VW could ultimately get up $13.2 billion in public subsidies, depending upon how many batteries it manufactures.

Asked about the revised proposal that was made over the weekend, Stellantis Canada spokesperson LouAnn Gosselin would only say, “We are not commenting at this time.”

The Star reported Friday that talks were at an impasse after the most recent 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 the automotive sector of our country,” said Singh. “Will the government ensure that those jobs do not end up going to the U.S. and instead we keep those jobs here in Canada and do everything possible to make this deal go forward?”

“Absolutely yes, we will ensure the deal goes forward,” Freeland replied.

“We will ensure the jobs will stay in Canada. That is why we have a $120-billion clean-economy plan,” she said, adding Ottawa “is going to ensure that Ontario pays its fair share because this is an investment in a particular province.”

A spokesperson for Industry Minister François-Philippe Champagne said the government is in “active” discussions with Stellantis and will not negotiate publicly.

Ford said last week his government had increased its initial contribution of a $500-million subsidy to the auto giant, but has declined to specifically discuss the provincial subsidies being offered.

At Queen’s Park on Monday, Economic Development Minister Vic Fedeli, who just returned from a trade mission to Germany where he met with executives from VW and Mercedes-Benz, underscored that his sales pitch to European automakers is stability.

“What we heard everywhere was consistent. In this turmoil-filled world — post-pandemic, Russia invasion (of Ukraine), Chinese-dominated supply chains — they all look at Ontario as a sea of calm, a stable, reliable, trusted partner,” said Fedeli.

“They also view Ontario as a safe jurisdiction — safe for their employees, safe for their families, safe for their executives to visit. We showed them that Ontario is all that and more,” he said.

Pressure is mounting on politicians in Ottawa and at Queen’s Park to save the factory.

Brian Kingston, head of the Canadian Vehicle Manufacturers’ Association, visited the Windsor site after Stellantis halted construction two weeks ago.

The bones of the plant are built, with a roof overhead, but it remains a shell without walls, and Kingston warned the company is serious about weighing its options to move.

“The ball is in the government’s court. Canada must compete with the United States if we are going to play a role in the EV battery supply chain. The situation is critical and every day that passes puts investment at greater risk,” he said.

Robert Benzie is the Star’s Queen’s Park bureau chief and a reporter covering Ontario politics. Follow him on Twitter: @robertbenzie
Tonda MacCharles is Ottawa Bureau Chief and a senior reporter covering federal politics. Follow her on Twitter: @tondamacc

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