BIZ X MAGAZINE: Windsor’s EV Battery Plant

For May 2022, the Rose Rose City Politics panel opines on the recently announced Stellantis-LG EV battery plant and what it means for Windsor Essex.

First 2500 jobs.

Now 3200 jobs.

The potential of up to 15,000 spinoff jobs.

An entirely new supply chain.

Economic diversification this is not, but it is great, necessary, and something to trumpet.

The Stellantis-LG investment, as well as those from our governments, is the shot in the arm the region has needed.

CBC quoted Brian Kingston, chief executive officer of the Canadian Vehicle Manufacturers’ Association as saying “This is massive news, not just for the Canadian auto industry [but] for Windsor, the Canadian economy and Canadian jobs.”

I spoke with Flavio Volpe on AM800 CKLW and he professed how important this news was not only locally but also nationally. Volpe didn’t mince words and made clear this was a significant reinvigoration the automotive industry hasn’t seen in decades.

In 2018 on election night, Mayor Dilkens proclaimed he ripped up his reelection speech to focus on economic diversification. But it can’t be spun that government investment into the automotive industry is economic diversification.

But don’t take the insight – or criticism depending on your perspective – to be negative. This is a meaningful investment surely to boost the auto industry. There is nothing to dismiss about a five billion dollar investment.

This will reinvigorate the automotive industry and parts sector, propel further investment, and even potentially may revive the third shift at WAP.

Windsor deserves this news. But we can’t lose sight of the target: further economic diversification. As we know from our collective local history, depending on an economic breadbasket filled only with bread brings with it not only economic highs as well as economic lows, but also the potential for stale bread.

Jon Liedtke is a co-host and producer of Rose City Politics, a business consultant focusing on cannabis and marketing, an occasional reporter and writer, and a member of Windsor’s The Nefidovs.

The planned Stellantis/LG battery plant is a tremendous win for the city. It will put a floor under our local economy that wasn’t there before. This investment helps modernize our key local industry. Municipal, provincial and federal governments splashed out big incentives, and every politician in the region has done their bit to promote it. That’s understandable, especially in a year when we’ll go to the polls municipally and provincially, but there is risk associated with the temptation to declare this investment “Mission Accomplished” as Mayor Dilkens did on social media.

The Windsor Works report commissioned by the City of Windsor recommended leveraging local expertise in the auto industry as a starting point for diversification. So far, so good, but to get the most out of the massive government investment in this plant it must be the beginning, not the end of the story. As Frazier Fathers said in his Ginger Politics blog, “Windsor-Essex caught a Hail Mary, but it is only the end of the first quarter.”

Statistics Canada estimates Windsor’s GDP grew by 40% between 2001 and 2016, slightly ahead of inflation over the period, which ran about 30%. In the same period, Canada’s economy grew by over 80%, London and Hamilton by over 60%, and Toronto’s economy nearly doubled. Part of the gap is due to dependence on auto manufacturing. Economic diversification is needed to reverse this trend of relative impoverishment against the broader Canadian economy.

The new battery plant may well enable economic diversification, but in itself it deepens our dependence on an industry that is unlikely to drive higher economic growth. The City spent $150 million dollars in incentives to land this facility. That’s a play we can’t run very many times. We must move forward with urgency to diversify our economy to maximize the benefit.

Doug Sartori is a political observer and organizer. When he’s not recording podcasts or getting people out to vote he runs Parallel 42 Systems, a technology consultancy in downtown Windsor.

Windsor will be the home of Canada’s first lithium-ion battery plant and one of the largest electric vehicle (EV) battery plants in the world. With manufacturer LG Energy Solutions set to start production in 2024 and creating 2,500 direct jobs, and laying the groundwork for thousands more in spin-offs, the massive size and historic scale of this investment will be transformational in many ways and no less so in its impact on our local communities.

The prodigious announcement was made possible by the collaborative efforts of all three levels of government. Each of those levels of government must now do its part to attend to the foreseeable challenges ahead in both the immediate future and in the long term. These include securing the region’s needed power supply (taking expanding greenhouse operations into account), not losing sight of the fact that we have a housing crisis, and, of course, addressing the labour demand in a market already struggling with a skills shortage.

Just as importantly, each level of government must do its part to ensure that opportunities are not missed or mishandled. These include the opportunities in the broader context of the supply chain, supporting new programs in the EV field at our post-secondary institutions, and investing in research. The federal plan that requires half of all new cars sold in Canada be zero-emission vehicles by 2030 provides welcome impetus. Now would be a good time for the province to reconsider the EV incentives that it cancelled.

Throughout all of this, Windsor’s local government must ensure that it diligently moves forward in developing and implementing strategies in line with the Windsor Works report. The fundamental aspects of what makes a community worth living in remain relevant and, arguably, more pressing.

The startling recent decision by the Mayor and council to let the City of Windsor’s CAO go after only a year in the position, on the heels of the battery plant announcement, has not escaped concern by any municipal watcher. It is hoped that this doesn’t signal that our local elected officials plan to sit on the laurels of the battery plant announcement while they bask in the comfort of their political fortunes.

Pat Papadeas is a legal studies professor at St. Clair College and co-author of the textbook Canadian Business Law (Emond Publishing). She is active in organizations that directly or indirectly support a bold and vibrant downtown.


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