CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

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CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

Windsor mayor “deeply concerned” about state of negotiations for NextStar plant

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Windsor Mayor Drew Dilkens has told CBC News that he’s now  “deeply concerned” following two weeks of negotiations between the federal and provincial governments and Stellantis that have not resulted in a new deal for the NextStar EV battery plant in Windsor.

“Each passing day increases the likelihood that Windsor, its workers, residents, and businesses will not receive the commitments made to them,” Dilkens said in a statement.

Dilkens is trying to increase pressure on the governments to get the new deal done by with NextStar by starting a petition that he wants all Windsor residents to sign.

“It is unacceptable for Windsor to be shortchanged or forced to accept a scaled-down version due to unfulfilled promises by the federal government,” he told CBC News.

Stellantis has paused construction on the module portion of its EV battery facility claiming the federal government hadn’t kept its promises in negotiations. The deal for the facility, due to open in 2024, was upended by the passage of the United States Inflation Reduction Act, which includes production incentives for companies building electric vehicle batteries stateside. 

Ontario Premier Doug Ford has already said his provincial government will put more money on the table in the Stellantis deal and federal Transport Minister Omar Alghabra says he’s confident Canada’s negotiating team will find a way to a deal.

“There is a commitment and a sense of confidence that hopefully soon we’ll have good news,” he told CBC News.

Ottawa had agreed to contribute $500 million towards the plant but that deal was struck before the U.S. introduced its Inflation Reduction Act, which promised billions in investments to companies looking to build EV plants on U.S. soil. Canada’s subsequent deal with Volkswagen to build its own EV battery plant in Windsor included subsidies worth up to $13 billion plus a $700-million grant.

It now seems Stellantis and LG now want a similar deal and is willing to halt construction in order to send a message to Ottawa.

As noted in our June cover story, Windsor’s manufacturing renaissance is heavily dependent on the NextStar and other recent automotive investments.

Canadian economic forecasters expect the Windsor metropolitan area to rise  from the ashes of almost two decades of deterioration in automotive manufacturing, to lead the country in GDP growth for the next two years. This is mainly due to the NextStar EV plant as well as Stellantis, parent company of Chrysler, Jeep and Fiat, spending another $1 billion to revamp its Chrysler plant in Windsor to make next generation hybrid and electric vehicles. Construction of the Gordie Howe International Bridge and a new hospital are also adding to the growth prospects for the Windsor area.

The Conference Board of Canada forecasts the Windsor census metropolitan area, which includes Lakeshore, Tecumseh, Lasalle and Amherstburg, will hit 2.4% GDP growth this year. That’s more than any of the 24 major Canadian cities included in the study, and a phenomenal 12 times the GDP growth rate forecasted for the Ontario economy and nearly double the growth forecasted for the country. And the region is expected to outpace both the provincial and national growth expectations yet again in 2024, growing another 2.1%.

The Windsor area is home to a quarter of North America’s tool, die and mouldmaking industry and accounts for 80% of the sector in Canada. More than 200 machine, tool die and mould making companies are clustered in the area and more than 90% of them are automotive focused and have been for a long time.

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