LILLEY: Battery plant a positive jolt for Ontario’s auto sector
It’s the spark that Ontario’s auto industry needs and that Premier Doug Ford had staked his reputation on. Stellantis and LG Energy Solution will build an electric vehicle battery plant in Windsor, beating out competing jurisdictions from across the continent.
It’s a $5.1 billion investment that will create 2,500 jobs, heralded as the largest investment in Canadian automotive history.
The announcement is another sign of confidence in Ontario’s auto industry and the manufacturing sector generally. It comes on the heels of announcements by Honda, Ford, General Motors, Toyota and Stellantis for future auto production.
“Attracting this multi billion-dollar investment will secure Ontario’s place as a North American hub for building the cars and batteries of the future,” Premier Ford said.
It’s a major move by Stellantis which owns the Chrysler, Jeep, Ram, Maserati and Fiat brands among others. Ontario is a small player in their global chain of operations with just two plants. The company has six plants in the United States including four in neighbouring Michigan alone.
Part of the sales pitch from Economic Development Minister Vic Fedeli has been the combination of a skilled workforce and Ontario’s rich mineral deposits which are needed for electric vehicle batteries.
“Our province has what it takes to develop and build the car of the future, and the batteries those cars need,” Fedeli said.
Part of the allure is of course the incentives given by governments – terms were not disclosed but the federal and provincial governments has each invested hundreds of millions to secure this deal.
The other part of the equation is the business climate in Ontario is improving, especially for manufacturers. It wasn’t that long ago that General Motors was shutting down their Oshawa production or that Sergio Marchionne, then CEO of Chrysler, was complaining that Ontario was uncompetitive and getting worse.
“This is not what I would call the cheapest jurisdiction in which to produce,” Marchionne said in 2015.
He was complaining about rising rates for electricity but also additional costs the then Wynne government was laying on business including higher taxes and the province’s cap and trade system. Manufacturing was fleeing the province and government policies were not helping.
In 2003 when the Liberals took power there were 1,077,800 manufacturing jobs in Ontario according to Statistics Canada. When Marchione made those comments, there were just 741,200 manufacturing jobs.
Things haven’t gone back to where they were in 2003 but the latest figures from Statistics Canada show 765,600 manufacturing jobs across Ontario. The Ford government has been active in recruiting new investment in the manufacturing sector, has developed plans for helping companies locate sites for their facilities and to get speedy approvals.
There is also a different attitude running through the entire Ford government. Rather than speaking constantly of the knowledge economy there is a positive view of manufacturing, construction, skilled trades and other jobs that were previously looked down upon.
“Ontario is built by those who shower at the end of the day, not the start,” Labour Minister Monte McNaughton said during a speech earlier this month to the Canadian Club.
It sums up the government’s viewpoint perfectly.
Manufacturing accounts for 10% of all the jobs in Ontario, it’s bigger than the civil service, bigger than education and surpassed only by health care and retail operations. Allowing such an important sector to whither and die, to neglect it or to tell workers facing an uncertain future that they should learn to code is both heartless and foolish.
Supply chain disruptions brought about by COVID or the current war in Ukraine have shown us the importance of being able to make things ourselves. We should take pride in that, we should nurture these industries, we should become a manufacturing powerhouse once again.
This is a good step in that direction.