NextStar battery plant will be built: Kusmierczyk

Discussions on Stellantis’ ominous statement on negotiations concerning the $5-billion NextStar Energy battery plant under construction in Windsor involve Prime Minister Justin Trudeau and Premier Doug Ford, said Windsor-Tecumseh MP Irek Kusmierczyk (Lib) Saturday.

“It’s so important to this community, it’s so important to the thousands of workers that will have good-paying jobs here for generations to come. I know that we will get an agreement done and I know that this battery plant will be built,” said Kusmierczyk.

Deputy Prime Minister Chrystia Freeland and Innovation, Science and Industry Minister Francois-Philippe Champagne  are also involved at the federal level, and so is Vic Fedeli, Ontario’s minister of economic development, job creation and trade, said Kusmierczyk.

“Those critical conversations are happening as we speak,” he said. “The level of investment speaks to the seriousness of our government’s intent and how committed we are.”

On Friday, Stellantis issued a statement saying “the Canadian government has not delivered on what was agreed to, therefore Stellantis and LG Energy Solution will immediately begin implementing their contingency plans.”

The NextStar plant is a joint venture between Stellantis and South Korean firm LG Energy Solution. It is expected to employ about 2,500 people when it goes into full production in 2025.

There is no explanation about what the federal government has not delivered on, nor are there any details about Stellantis’ contingency plans.

Unifor President Lana Payne expressed apprehension about the state of negotiations on Saturday. “I’m always concerned when you get to this kind of a brink and we don’t have a deal, and a company is basically talking about contingency plans,” she said. “This is as serious as it gets.”

Payne said she spoke to Stellantis officials “a couple of times Friday, at the highest levels,” and she has been in contact with the federal government.

“What I feel right now is everybody is squeezing everybody at the moment to get this deal done and our members are caught in the middle of that. This is pretty high-stakes poker.”

Flavio Volpe, president of the Automotive Parts Manufactures’ Association, said Stellantis’ position is hardball negotiations.

$5B Windsor battery plant the largest private sector investment in Ontario history

“What we are simply seeing is a tough negotiation gone public,” he said in an email. “When Canada landed this incredible investment, the U.S.A. countered with the biggest subsidy offer in automotive history. Stellantis is addressing its fiduciary responsibility to its shareholders as it should.

“Fortunately, both parties are very committed to the city, the supply chain and its workers. I expect that we will see this through.”

Mayor Drew Dilkens laid the blame squarely on the federal government in a statement on his Twitter account Saturday. “The entire deal is now in question due to the federal government not fulfilling their commitments, jeopardizing not only the completion of the EV plant, but also our efforts to attract additional investment to the region,” he said.

“This counterproductive impasse creates significant challenges and risks thousands of jobs in our community.”

Windsor West MP Brian Masse, the NDP’s critic for innovation, international trade, economic development and auto, as well as United States-Canada border relations and Great Lakes, said in a statement that the impasse was “highly predictable” because Canada does not have a national auto policy.

Game-changer of a factory — Windsor prepares for NextStar

While a deal to build the electric vehicle battery plant was announced last March, a second set of negotiations is underway following the passing of United States Inflation Reduction Act (IRA) in August, which offers large tax credits to the electric-vehicle sector, Kusmierczyk said.

After the IRA went into effect, the federal government agreed to provide Volkswagen up to $13 billion in subsidies over the next 10 years for a  $7-billion battery plant to be built in St. Thomas.

Kusmierczyk said negotiations on a second deal for the NextStar plant are taking into account the provisions of the IRA.

While the Volkswagen subsidies have drawn some criticism, including from Conservative Leader Pierre Poilievre, who has asked the Parliamentary Budget Office to scrutinize the deal, Kusmierczyk said Canada must “step up” in the wake of the U.S. subsidies.

The IRA “completely changed the competitive landscape of automotive in North America,” he said.

“We need to step up and we need to respond and we’re committed to doing that. In order for us to be competitive against the $24 trillion (gross domestic product) US behemoth, all partners have to work together.”

Canada’s GDP in 2022 was $2.14 trillion US.

“In this business you either go big or go home,” Kusmierczyk said. “You have to make those strategic investments to remain competitive. “

NextStar Energy plant named Canada’s top business deal of 2022

Masse said in his statement that requests for massive subsidies are inevitable because of the way negotiations are being conducted.

“Each agreement as a one-off secretive approach lends itself to automakers wanting to renegotiate to get ‘favoured nations’ improvements, and public questions as details are held as state secrets but eventually emerge causing negotiations to spill over into the media and public discourse,” he said.

Unifor’s Payne said the federal government has given “assurances” about reaching a deal on NextStar, “but the reality is assurances are one thing. What we need is a signed deal and we do not have that right now and that’s a very big problem.”

Asked if she knew of a company that has cancelled a major project as far along as NextStar, she said that scenario is possible. “They’ve spent millions of dollars so far. This investment is billions of dollars,” she said. “Whether they can pull back, I suggest that they can. That’s the reality.”

Kusmierczyk said the federal government “is at the (negotiating) table with unprecedented investment, and this is record investment, it’s never been done in the history of this country.”

He would not provide specifics of that investment due to the sensitive nature of the talks with Stellantis.

“There’s a recognition here that this has to be a partnership, all levels of government, all partners have to pull in the same direction, we all have to lift this together,” he said.

The federal and provincial governments, Stellantis and LG Energy Solution, the City of Windsor and Unifor all helped to bring the plant to Windsor and all have a role in ensuring a positive outcome in this round of talks, he said.

The federal government understands the strategic importance of the NextStar plant, which, along with the St. Thomas Volkswagen plant, are key planks of its “mines to mobility” strategy, he said.

“We’re going to be mining the minerals, we’re going to be refining the minerals, and then we’re going to be putting those in the batteries, and we’re also going to be building the cars. And Windsor is going to be at the centre of that entire brand new industry that’s going to connect places like Sudbury to Windsor and Brampton and other places.”

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