Automaker Stellantis NV said it will begin implementing “contingency plans” with its South Korean partner for electric vehicle battery production as they negotiate with Canada for more financial aid to build a new plant.
Stellantis and LG Energy Solution Ltd. said last year they would invest more than $4 billion in a battery-making facility in Windsor, Ontario, across the border from Detroit. But the government of Prime Minister Justin Trudeau has not met its promises, a Stellantis spokesperson said in a statement Friday night. “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 the statement. The company didn’t elaborate.
Trudeau has pledged financial help to make Canadian manufacturing plants competitive with US ones after the passage of the Inflation Reduction Act last summer — and his government offered a huge financial package to Volkswagen AG, worth as much as C$13 billion ($9.6 billion), for a battery plant in southern Ontario about two hours from Detroit.
Stellantis and LG made their Windsor announcement months before President Joe Biden signed that bill, which contains rich incentives for certain types of manufacturing, including electric vehicles.
An official in Canadian Industry Minister François-Philippe Champagne’s office said negotiations are continuing.
“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,” spokesperson Laurie Bouchard said in an emailed statement. “We continue to negotiate in good faith with our partners. Our top priority is and remains getting the best deal for Canadians.”
Unifor, the labor union representing workers at Stellantis’ assembly plant in Windsor, is also involved in the negotiations, a union spokesman said.
“What we are simply seeing is a tough negotiation gone public,” Flavio Volpe, president of the Automotive Parts Manufacturers’ Association in Canada, said on Twitter on Saturday. “Stellantis is addressing its fiduciary responsibility to its shareholders as it should.”