Canada offers Ford $380M to bring EV assembly to Ontario, report says

The federal Liberal government is willing to give Ford Motor Co. about $380 million to help the automaker retool its Oakville, Ont., assembly plant to produce electric vehicles, according to a report in The Toronto Star.

Following the report, a Unifor news conference previously scheduled for Monday afternoon was postponed to Tuesday morning. Ford and Unifor are locked in labor negotiations, and the contract between the two sides is set to expire at 11:59 p.m. ET today.

The newspaper reports that Ottawa is eager to have the company bring electric vehicle production to Ontario as part of an eventual $1.5-billion investment.

The Star also obtained a draft letter to Ford Canada CEO Dean Stoneley from Innovation Minister Navdeep Bains.

“The choice to dedicate the Oakville Assembly Plant to the production of battery electric vehicles shows alignment between Ford’s commercial priorities and Canada’s commitment to sustainable growth,” Bains wrote. “It also reflects our productive dialogue in recent months, built on top of an enduring partnership.”

Ford executives and union leaders have been negotiating in Toronto and virtually in recent weeks as the deadline approaches. Unifor’s top priority has been securing product for Ford’s Oakville, Ont., assembly plant, where production of the Ford Edge crossover will reportedly end in 2023. Ford has not confirmed or denied the report to any media outlet since AutoForecast Solutions first made the prediction in June.

Unifor President Jerry Dias on Monday morning declined a request for comment from Automotive News Canada. Dias, who has advocated for the federal government to provide significant incentives for EV production, was unaware of the government’s offer as of Sunday night, according to the Star report.

“We look forward to negotiating an agreement with Unifor that will help lead Ford of Canada, our employees and our communities into the future,” a Ford spokeswoman wrote in a statement emailed to Automotive News Canada Monday morning. “The details about how we do that will be discussed at the bargaining table, not in the media.”

A spokesman for Bains’ office did not immediately provide comment Monday morning.

Unifor represents about 6,300 workers under the current master agreement, including about 4,200 members in Oakville. The union would be in a legal strike position if the contract ends tonight.

A strike would idle production of the Edge and Lincoln Nautilus crossovers in Oakville. Ford sold 50,651 Edges in the United States in the first half of 2020, and an additional 5,504 in Canada, according to the Automotive News Data Center.

A strike would also halt production of the 5.0-liter and 7.3-liter V-8 engines built in the Windsor factories, which are important to Ford production in the United States. Those engines are found in the company’s top-selling F-series pickup and Ford Mustang.

Parts distribution centers in Edmonton and Brampton, Ontario, would also be affected by a strike.

The Star report comes after the union, as well as from environmentalist groups, have spent time lobbying the federal government to incentivize more production of EVs in Canada. Unifor sees securing investments for EV production now as critical to maintaining manufacturing in Canada in the long term as companies roll out their electrification strategies.

The Detroit 3 currently build no pure battery-electric vehicles in Canada. And the hybrid version of the Chrysler Pacifica minivan is the only hybrid model assembled by them in Canada.

As previously reported by Automotive News Canada, automakers would likely need to make major investments in Canada to make EV production feasible in the country. This is, in part, due to trade requirements and the fact that so many EV components are sourced from outside the country and the region.

Incentivizing such investments would dovetail with the federal government’s goal of reducing global warming, as well as meeting zero-emissions vehicle sales mandates in Quebec and British Columbia. Ottawa currently offers up to $5,000 in incentives for the purchase of electric and plug-in hybrid vehicles.

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