The federal government and the province of Ontario on Monday announced they would each contribute $259 million to General Motors Co. as it moves to revitalize its auto manufacturing operations in Canada.
GM said it is investing more than $2 billion in its operations and the federal and provincial money will support its assembly plant in Ingersoll, in southwest Ontario, where later this year it will start producing electric commercial vans, known as the BrightDrop. The money will also be used for its operations in Oshawa, where last year GM resumed two shifts making Chevrolet Silverado pickup trucks, after shutting down production in 2019. GM announced it will add a third shift on Monday.
The federal government declined to offer many details on its $259-million contribution, but has said in the coming weeks and months it will disclose more information on a series of investments, expected to amount to around $1 billion or more, to help the country’s auto sector navigate the transition to zero-emission vehicles.
“Today is proof that Canada’s auto sector is here for the long term,” François-Philippe Champagne, Minister of Innovation, Science and Industry, said at a press conference in Oshawa, adding, “We want to lead in the green industrial future…. We’re securing jobs for generations to come.”
Last week, some people in the auto sector said the federal government wasn’t offering enough support as it rolls out mandates, beginning in 2025, that say 20 per cent of all new vehicles sold must be zero-emission vehicles. The mandates ramp up to 60 per cent of new sales by 2030, and 100 per cent by 2035.
“We’re very concerned,” said Brian Kingston, president of the Canadian Vehicle Manufacturers’ Association, a lobby group representing Ford Motor Co., General Motors and Stellantis N.V.. “You can’t achieve higher (zero-emission vehicle) adoption levels without much stronger consumer incentives and charging infrastructure.”
The federal government said Monday’s investment comes out of its $8-billion Strategic Innovation Fund, meant to help decarbonize industry.
Ontario said in a press release that it is providing up to $259 million in grant support to help transform the Oshawa and Ingersoll plants and support improvements across all of GM’s manufacturing and R&D facilities in the province.
Ontario Premier Doug Ford said he could hardly stop smiling at the press conference, adding, “This is just another huge win.”
“The cars of the future will be built in Ontario from start to finish by Ontario workers,” he said.
Last month, GM and BASF SE separately announced they would each open a battery active cathode manufacturing plant in Becancour, Quebec. Each facility was estimated to cost around $500 million and the companies have both said they are expecting provincial and federal support.
Then, Stellantis, the company once known as Fiat-Chrysler and behind brands such as Jeep, announced a $5-billion joint venture with the South Korean battery company LG Energy Solution, that would open a battery cell manufacturing plant in Windsor, Ont.
Premier Ford said at the time the federal and provincial governments would contribute “hundreds of millions of dollars,” but declined to answer any questions about exact amounts.
A spokesperson for Champagne said the federal government, in conjunction with provincial governments, is still negotiating with various other auto and battery companies about investing in facilities, and disclosing such information would compromise its leverage.
Last year, GM said it had worked out an agreement with its labour union to invest $1 billion, subject to government support, so its Ingersoll, Ont., plant can pivot from producing the Chevrolet Equinox to its electric light duty commercial van, known as the BrightDrop.
On Monday, Champagne said the Ingersoll plant would be Canada’s first full-scale electric vehicle manufacturing facility.
By contrast, GM has not yet announced any production of electric vehicles in Oshawa. The closure of its plant there in 2019 sent shockwaves through the auto sector; it had been around for decades and employed 2,300 people. GM maintains its Canadian headquarters in the city.
“For such a technologically advanced plant to be taken down, it gave everyone pause for a little,” said Dave C. Adams, president of the Global Automakers of Canada, a lobby group that represents 15 companies including Honda Motor Company Ltd. and Toyota Motor Corp., but not GM.
Adams said it was devastating to the Oshawa economy, which had to work to diversify its economy in the wake of the closure.
In 2020, GM Canada repurposed the plant to produce personal protective equipment, such as face masks, for the Canadian government. Last year, it announced it would invest $1.3 billion to restart two shifts, supporting 1,800 jobs producing Chevrolet Silverado heavy-duty pickups, because of strong demand. Those are conventional internal combustion engine vehicles, not zero-emission vehicles.
GM also said that more than half of its production hires in Oshawa have been women since it restarted.
On Monday, the company said that by adding a third shift in Oshawa, the plant also will produce light-duty Silverado models and has now created more than 2,600 jobs.
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