Stellantis & LG ES suspend work on Canadian battery plant

Stellantis and LG Energy Solution are suspending work on their battery factory announced last year in Windsor in the Canadian province of Ontario.

The companies claim Canada’s federal government has failed to meet its obligations to the project. At issue are subsidies. The newspaper Toronto Star reports that Stellantis is said to have threatened to end the project if the government’s subsidies are not increased to the level Volkswagen receives for its battery factory in Ontario.

Now it appears that the company is following through on the threat: “Effective immediately, all construction related to the battery module production on the Windsor site has stopped,” Stellantis spokesperson Lou Ann Gosselin said.

In response, the government says it is in talks with Stellantis’ management and the issues can be resolved. “I am absolutely confident that we’re going to get a deal. But I also want to point out that the resources of the federal government are not infinite,” said Finance Minister Chrystia Freeland, adding that the provincial government of Ontario must do its “fair share.”

On the other hand, the Ontario provincial government says it has already signed a deal with the carmaker and is not in negotiations. “It really worries me,” Ontario Premier Doug Ford told reporters when asked about the construction halt. “We need the federal government to step up as they did for Volkswagen.”

Flavio Volpe, president of Automotive Parts Manufacturers’ Association (APMA) of Canada, said he’s not worried about Stellantis pulling out of Windsor, given that construction of the facility has already started: “What we’re seeing is a public peek into private negotiations,” Volpe told BNN Bloomberg on Monday. “We’re really just grinding out the final details.”

This Stellantis deal underpins 2 5000 job Auto Plants, a 2500 job EV Battery plant & a 650-person R&D headquarters.
It’s a super footprint that’s globally competitive & has 20000 supplier jobs attached.
This will get done – I am not worried – & we will continue growing in 🇨🇦. https://t.co/7K8obbQc4M
— Flavio Volpe, C.M. (@FlavioVolpe1) May 12, 2023