Stellantis stops construction on portion of Windsor, Ont., EV battery plant amid Ottawa dispute

Stellantis says it has stopped construction on a portion of an electric vehicle (EV) battery plant in Windsor, Ont., because the federal government has not delivered on what was promised.

The automaker — which makes Chrysler, Ram and Fiat cars among others — and South Korean battery-maker LG Energy Solution announced the $5-billion plant last year and said it was expected to create 2,500 jobs.

On Friday, Stellantis said it would move to "contingency plans" should Ottawa not fulfil its negotiation commitments.

The automaker reiterated that Monday.

"As of today, the Canadian government has not delivered on what was agreed to. Therefore Stellantis and LG Energy Solution will begin implementing their contingency plans. Effective immediately, all construction related to the battery module production on the Windsor site has stopped."

The manufacturer previously said the Windsor site will produce both lithium ion cells and battery modules of connected cells.

A Stellantis spokesperson said Monday that some construction activity for the cell portion of the Windsor site continues — but most of the construction at the battery plant was in the module portion, and that has ceased.

The spokesperson could not comment on whether the cell portion of the facility is at risk as the company explores its "contingency plans."

All levels of government were to provide financial support in the pending deal.

Ottawa has said negotiations are ongoing.

Ontario Premier Doug Ford said he's concerned, and the federal government needs to support Stellantis in the same way it did Volkswagen.

Canada's deal with Volkswagen includes subsidies worth up to $13 billion plus a $700-million grant.

WATCH | Ontario Premier Ford says Ottawa needs to keep its promise to Windsor:

"It really worries me," Ford said Monday morning.

He said the federal government has been "great partners" on the Stellantis project and now, it needs to follow through.

"They need to continue supporting the people of Windsor, which they promised they were going to do. We want to work hand in hand with the feds on future deals as well."

The Canadian Taxpayers Federation said Monday that Ottawa should reject Stellantis's "corporate welfare demands."

"If you hand out billions of dollars in taxpayer cash to one auto company, of course the others will follow," said Jay Goldberg, the federation's Ontario director. "Taxpayers can't afford to throw money at every company under the sun and Ottawa needs to say no before it wastes billions more."

Stellantis and NextStar Energy Inc. announced the plant last year and construction has been ongoing for months. The plant is due to open next year. Ottawa's contribution was to be about $500 million.

But the Inflation Reduction Act, introduced by the U.S. government a few short months after the Windsor plant was announced, promises billions over the next 19 years to incentivize companies to build EV plants on their soil. That competitive edge played a role for the higher investment in Ottawa's Volkswagen deal.

Windsor Mayor Drew Dilkens said in a statement the potential impact of the loss of jobs to the Windsor community was "significant."

"Windsor has fulfilled its responsibilities and commitments for the NextStar EV plant and negotiations between the parties are ongoing," Dilkens said in a statement. "Our collective focus remains steadfast on assisting to find a constructive solution for the benefit of our community."

Dilkens added the city was prepared to offer assistance in "any capacity necessary" to reach a resolution.

MPP Lisa Gretzky (NDP — Windsor West) called on the provincial government to do "everything in its power" to protect and secure the potential Windsor auto jobs.

"Ford must do everything in his power to support Windsor workers and ensure we don't lose this investment," Gretzky said. "He can't continue to pass the buck to the federal government — I am calling on him to show some leadership and step up to the plate before it's too late."

Dave Cassidy is president of Unifor Local 444, which represents workers at Stellantis's Windsor Assembly Plant. He told CBC Windsor the stop on construction of the module facility could affect about 300 of the estimated 2,500 future workers the factory is expected to employ.

"We don't want jobs going anywhere," Cassidy said.

He said he was "shocked" by the latest developments, but stressed the negotiations do not affect workers at the Windsor Assembly Plant.

"This is about workers, this is about … potential union members. I have an obligation to not only the members that I represent, but I think the city and Essex County as well, as a labour leader, to do my part to make sure that we have this investment in the auto industry.

"This is ... to me about politics and I'm not into that."

With files from The Canadian Press