By on October 8, 2020

With Ford and Unifor having agreed to a new three-year contract last month, Oakville Assembly (which currently manufacturers the Ford Edge and Lincoln Nautilus) is slated to be retooled to manufacturer electric vehicles and their batteries. While the first example wouldn’t roll off the assembly line until 2026, according to the agreement, Canada is excited about the prospect of green jobs. In fact, the Canadian government has committed itself to an ambitious program aimed at boosting electric vehicle sales in order to achieve net-zero carbon emissions by 2050.

We’re always suspect of central planning, as regulatory changes often have unintended consequences for the associated industries, but need to praise Canada for actually putting some money where its mouth is. Barring a mishap in 2023, the nation has promised to contribute $447 million (split evenly between the Ontario and federal governments) toward Ford’s 1.4-billion program to convert the facility.

Unifor seems pleased enough. President Jerry Dias has repeatedly said the union would need substantial and consistent support from the Canadian government if the nation expects to remain a major manufacturing hub  especially as the industry seems bent on transitioning toward EVs. While that has not been reflected in consumer behaviors, the industry itself has invested more than enough money into electrification and numerous markets are regulating the industry to ensure this happens. They’re poised for a change, regardless of what the markets want to do.

“Both governments understand where the industry is heading. You either get on board now or get lost in the shuffle,” Dias said in an interview with Automotive News Canada. “They understand this is a pivotal time for the industry.”

Canadian Prime Minister Justin Trudeau participated in Thursday’s event announcing the government-backed funding via the internet, saying this would be the first of many steps toward a ” next-generation auto industry.”

“Today’s investment from Ford Canada is historic. It will ensure our province continues to lead North America and the world in automotive manufacturing and innovation, while boosting our competitiveness in this key sector,” Trudeau continued.

Based on the updated contract agreement, Oakville intends on continuing the production of the Edge and Nautilus until 2023. Originally, Blue Oval had no future plans for the facility (a historic building manufacturing Ford products since 1953) and looked to be shuttering it once production wrapped on the current batch of middleweight crossovers. But the agreement with Unifor has effectively breathed new life into the site, with a few very important stipulations.

Retooling the factory and getting those government investments comes after the latest contract expires. That means this whole deal could fall apart long before Oakville gets its upgrade and the issue will undoubtedly come up in union negotiations slated for 2023. For now, Ford seems happy enough to play along and we doubt the Canadian government offering to foot a significant portion of the bill is going to endanger that position.

“With the support of the federal and provincial government, Ford of Canada is investing in the future of its Ontario-based operations, solidifying its commitment to providing thousands of well-paying jobs in Ontario and becoming the first automaker in the country to build full battery-electric vehicles while delivering operational improvements that will maximize production flexibility to ensure we remain operationally competitive,” Ford Canada CEO Dean Stoneley said in a statement.

[Image: JL IMAGES/Shutterstock]

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10 Comments on “Canada Contributing $447 Million Toward Ford Plant Upgrades...”

  • avatar

    Wikipedia says 3400 employees. That’s $131,470 per employee. Why not just give that to the employees and let Ford go away? That’s enough money to spend a year looking for a new job and relocating.

    • 0 avatar

      VW received approximately $150,000 dollars per employee in incentives for its Chattanooga plant that opened in 2011. Other plants have received more.

      Free market, ma derriere.

    • 0 avatar

      The states (and countries) don’t do this blindly. Because the incentives/investment are one-time and the jobs continue [and because of the ‘multiplier’ effect of supplier and support jobs], the investment should pay off eventually (i.e., is projected to at the time the incentives are offered).

      The numbers for VW in Chattanooga:

      • 0 avatar

        I recall reading that for each job at an OEM factory, a multiplier of about 4 additional jobs are created as a result in supply, logistics, etc. Its an investment, plain and simple. It does seriously smack of fleecing the taxpayer for private interests, but it is a revenue calculation that takes the long term into account. There are worse ways our government spends money.

        On the flip side of that coin, this is clearly a situation where the CAW workers are getting a benefit that would rarely go to any other workers in the private sector. The guy who lost his job and gets a few hundred dollars a month in unemployment should be ticked for sure. Very much similar to all the people who lost everything in 2008, got nothing from the government, but got to foot the bill for the UAW bailout…..or the Auto bailout as it was more commonly referred to. Dont even post a response saying the taxpayers got their money back before you do your research……because taxpayers doled out many billions before it was all said and done that never came back to the treasury.

    • 0 avatar

      In the current COVID-19 climate 131,470 per employee is only going to go so far. They probably would not be able to find well paying jobs. As @ToolGuy has astutely pointed out, there are “upstream” effects on suppliers and other support industries.

  • avatar
    SCE to AUX

    Corporate welfare simply trains the bear to keep returning to your campsite for food.

    • 0 avatar

      I remember when their last prime minister gave a big payout to GM. He even famously did a photo op in the cab of a GM locomotive. How’d that work out? This will be another boondoggle.

  • avatar

    It could possibly be the powerhouse. I dont see any stacks, but industrial boilers are huge, multistory units. There are also ovens used to treat metal parts that need significant height clearance and perhaps would also need a gantry crane for maintenance. Just a thought but who really knows….Maybe the workers come to the cube to regenerate.

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