Future of Windsor’s NextStar battery plant in doubt

The future of the $5-billion NextStar Energy battery plant under construction in Windsor is suddenly uncertain after Stellantis and LG Energy Solution, joint owners of the facility, accused the federal government of not living up to promises.

No further details of what those plans may entail were outlined.

“The Government and Stellantis are playing a high-stakes game that is betting the livelihoods of tens of thousands of Canadian autoworkers,” said Unifor national president Lana Payne said Friday night.

“Commitments were made and Unifor and our members fully expect that all parties live up to them. Any brinkmanship must end, and a deal must be reached because come hell or high water no promised manufacturing jobs are leaving this country.”

The U.S. federal legislation provides billions annually in financial supports and incentives over a 10-year period until 2032 to encourage companies to build battery plants in the U.S. It’s estimated the NextStar plant would qualify for about a billion dollars a year in government incentives under the Inflation Reduction Act.

Stellantis and LG have grown impatient with the pace of the talks knowing the financial options available to them across the Detroit River. The companies pushed the government this week to formally commit to what has been discussed.

Payne said government investment is necessary to attract and secure Canada’s future auto manufacturing footprint.

“The shift to electric vehicles has created a fiercely competitive environment, as evidenced by the IRA incentives in the U.S., with jurisdictions around the world vying for these highly sought after jobs,” Payne said.

“These plants will anchor the communities that they are built in for generations to come.”

The IRA bill was also the motivation behind the recently announced incentives package the Canadian government gave Volkswagen to build a 90-gigawatt battery plant in St. Thomas.

That package could be worth up to $13 billion if certain production targets are met. Those incentives will also decline or be removed if changes are made to the IRA bill by the American government.

A Tweet from Unifor Local 444 on Friday night said that Local 444 president “Dave Cassidy as well as Unifor National President Lana Payne is in discussions with Stellantis, the Federal government and the Provincial government regarding the future of the Windsor battery plant…..stay tuned.”

Stellantis and LG Energy Solutions are believed to be seeking a similar pro-rated package for the 45-gigawatt factory currently under construction in Windsor. Structures for at least three buildings are already rising out of the ground, but the investment already made in construction would likely pale in comparison to the support the firms would get if they chose to uproot to the U.S.

Stellantis has already announced its second North American battery plant will be in Indiana making it an option for expansion to accommodate any production that would’ve been destined for Windsor. The NextStar plant was scheduled to begin full production in 2025 and produce 400,000 batteries annually.

The plant is expected to employ at least 2,500 people when it’s fully operating.

The NextStar battery plant announcement also has significant tie-ins with Stellantis retooling Windsor Assembly Plant to produce at least two new battery electric vehicles expected to be the new Dodge Challenger and Charger. The company also announced a major expansion of its Automotive Research and Development Centre in Windsor to make it the centre of its electric vehicle research in North America.

Officials with knowledge of the discussions said uncertainty would also hang over those investments should the battery plant agreement collapse.

“Unifor and our members will hold the government to its word not to leave workers behind just as we will hold Stellantis to the company’s promises in Windsor,” Payne said.

Dwaddell@postmedia.com