The maker of Chrysler, Dodge, Jeep and Ram vehicles on Monday said it will invest $2.8 billion (3.6 billion Canadian dollars) into its Canadian operations for its electric transition, preserving the futures of both Windsor and Brampton assembly plants and creating its first battery lab in North America.
The amount is more than double the commitment Fiat Chrysler Automobiles NV made in 2020 contract talks with Canadian autoworkers union Unifor prior to merging with French automaker Groupe PSA to create Stellantis NV last year. The transatlantic automaker has pledged to become a sustainable mobility tech company, offering an all-electric version of all of its U.S. models by 2029 and investing $35.5 billion into electrification and software by 2025.
“These investments re-affirm our long-term commitment to Canada,” Mark Stewart, Stellantis’ chief operating officer, said in a statement, “and represent an important step as we move toward zero-emission vehicles that deliver on our customers’ desire for innovative, clean, safe and affordable mobility.”
A new, flexible architecture that will support all-electric and hybrid vehicles will go to Brampton Assembly Plant outside of Toronto. Industry forecasters had predicted the plant employing more than 3,000 people on two shifts could be without product by 2024 if the company moves production of the aging Dodge muscle cars to Belvidere, Illinois, when they are electrified. In addition to the Challenger and Charger, Brampton builds the Chrysler 300 sedan. With the new plan, Brampton will be retooled starting in 2024 with production resuming in 2025.
“The hard working, dedicated people at the Brampton Assembly Plant take pride in building some of the highest quality, best-selling vehicles in their class,” Danny Price, Unifor Local 1285 president, said in a statement. “Now, we can also be proud of playing a critical role in Canada’s electric vehicle transition for years to come.”
Windsor Assembly Plant also will support production of battery-electric and hybrid models on a new architecture for multiple models, according to a news release. Retooling is planned to begin in 2023, though the automaker declined to provide a time for completion. The plant will be able to adjust production volumes as needed to meet changing demand over the next decade, the company said.
Stellantis said it will make product announcements for the sites in the future, but the plans will return both plants to three-shift operations. The company declined to provide a breakdown of the investment per facility and projections for how many jobs would be created at or supported by the assembly plants.
The news comes after the automaker on Thursday said it was extending the 1,800-person second-shift at Windsor Assembly Plant through the end of the year. The company had been set to cut the shift at the Chrysler Pacifica plant at the end of June. In the first quarter, Stellantis sold more than 26,000 Pacificas in the United States, down 23% year-over-year.
Additionally, by the end of 2023, Stellantis will add 100,000 square feet to its Automotive Research and Development Centre in Windsor for the creation of a battery lab for the development and validation of all-electric and hybrid cells, modules and battery packs. The expansion to the 230,000-square-foot facility will support 650 new engineering jobs to support electrified propulsion systems, power electronics, electric machines, motor controls, energy management and embedded software.
The investments are another victory for the province of Ontario, which has made strides to improve its ability to attract business and has allocated hundreds of millions of dollars in incentives to do so. The mobility sector has been a focus to preserve its automotive industry, which could’ve been in jeopardy with the transition to electric vehicles. Meanwhile, suppliers even across the Detroit River stand to benefit from continued investment in the region.
“Ontario and Michigan, our industries are completely interconnected, just separated by a river and bridges,” said Glenn Stevens, executive director of MICHauto, the mobility arm of the Detroit Regional Chamber. “The health of one is important for another. There are many suppliers that supply the Tier 1s or the assembly plants throughout Ontario. When a major assembly plant like Brampton gets a new lease on life, certainly the Ontario suppliers are feeling good, and many Michigan suppliers that supply that assembly plant are as well.”
He recalled attending a gathering in 2016 in Windsor with a number of industry stakeholders that felt like a “town hall crisis meeting” after the region had seen manufacturing move to the southeast United States and Mexico.
“They put together a strategy to put a tremendous amount of investment in the knowledge part of the economy,” Stevens said. “It is a really strong message or reminder to us here in Michigan how important investment into high-tech talent is. They have been doubling and tripling down on it.”
Ontario is supporting Stellantis’ projects with up to $397 million (513 million Canadian dollars), which breaks down to $222 million (287 million Canadian dollars) for Windsor, $102 million (132 million Canadian dollars) for Brampton, and $73 million (94 million Canadian dollars) for the ARDC. Canada’s federal government is providing an additional $410 million (529 million Canadian dollars) in incentives.
“Today’s deal on made-in-Canada electric vehicles is yet another investment in our workers and in our future,” Canadian Prime Minister Justin Trudeau said in a statement. “We’re building a world-class Canadian auto industry, an innovative economy, and a clean, strong future for everyone. This is what a healthy environment and a healthy economy looks like.”
Over the past 18 months, the automotive sector in Ontario has seen almost $11 billion (14 billion Canadian dollars) in investments for new vehicle and battery manufacturing. Government officials last month joined Stellantis leaders and executives from Korean battery manufacturer LG Energy Solution to announce plans for a $4.1 billion gigafactory to make batteries for electric vehicles manufactured in North America.
The plant is expected to create 2,500 jobs and open in the first quarter of 2024. The city of Windsor is in the process of expropriating a home that is a part of the property needed for the facility before the companies break ground later this year.
“Today is yet another example that our plan to build Ontario is delivering huge wins for workers and communities all over this province,” Premier Doug Ford said in a statement about Monday’s announcement. “Ontario has everything it needs to be North America’s auto manufacturing powerhouse once again. Where other governments stood by and watched jobs flee this province, we are getting it done and ensuring that cars of the future are made in Ontario by Ontario workers.”
Brampton Assembly was built in 1986, making it one of the newer plants in Stellantis’ footprints, said Sam Fiorani, vice president of global vehicle forecasting for AutoForecast Solutions LLC.
“It had a lot going for it between the age of the plant and the number of workers there, who have 35 years of experience working in that plant alone,” he said. “Then, add in the regional access to a battery plant going into Windsor, it makes sense to put something in there.
“Stellantis had a few underutilized plants that have product earmarked for them going forward, so that leaves Brampton potentially with a white-space product for a space they are not covering at the moment or not adequately covering at the moment.”
With the gigafactory in Windsor, it also makes sense to have a nearby center to test batteries and conduct diagnostics, said Sam Abuelsamid, principal e-mobility analyst for market research firm Guidehouse Inc. Stellanits has announced a battery lab in Turin, Italy, but having one in North America can be advantageous as well.
“They may be using different chemistries for different markets and different types of vehicles they are selling,” he said.
Under the 2020 Unifor contract, FCA had committed to investing $1.13 billion for Windsor Assembly Plant by 2024 for a new platform that supports electrified vehicles. At the time, the former Unifor President Jerry Dias said employment would grow by more than 2,000 starting in 2023 with a 38-week ramp-up of the new platform.
The contract also included derivatives of the Chrysler 300, Dodge Challenger and Dodge Charger at Brampton and new products for Etobicoke Casting Plant, both in Ontario.
“It lays the groundwork for a happy contract next year when the Unifor contract comes up again next year,” Fiorani said of Stellantis’ announcement. “But because the UAW and Unifor bargain at the same time now, they may be itching for a fight with the U.S. union.”
bnoble@detroitnews.com
Twitter: @BreanaCNoble