Ford’s deal to build electric cars in Oakville comes with $ 500 million in government funding to upgrade plant

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The federal government and Ontario have pledged to spend up to $ 500 million to make the Ford plant in Oakville, Ontario, capable of building electric vehicles.The future of the plant has been a key issue for the Canadian auto industry since the Unifor union began negotiating a new three-year pact with the automaker to cover the company’s Canadian workforce.

The two sides reached a deal hours after the midnight strike deadline on Tuesday morning, a deal that will see the company committing $ 1.98 billion to build five new electric vehicles and a motor contract that could create new ones. jobs in Windsor, Ontario.

Ford had previously pledged to spend US $ 11 billion to develop and manufacture electric vehicles, but so far all of that money has gone to Ford factories in Mexico and the original company in Michigan. .

“With Oakville earning such a large share of Ford’s planned investment, the assembly plant and its employees are in a better position for the job,” said Sam Fiorani, vice president of global forecasting at AutoForecast Solutions.

Currently, the plant is building the Ford Edge and Lincoln Nautilus, but concerns about the plant’s future emerged earlier this year when a report suggested Ford was considering phasing out the Edge altogether. The new vehicles will come as good news for the plant, although Fiorani says he is concerned that demand for electric vehicles (EVs) has so far failed to live up to the hype.

“The electric vehicle market is coming, and Ford seems to be preparing for it. However, demand is simply not growing in line with the investment offered by all car manufacturers, ”he said.

Factory needs to be upgraded first

And the factory can’t just flip a switch and start building a whole new kind of vehicle. This will require major retooling, and it will take time – and money – to happen, which is where government money comes in.

As the Toronto Star first reported, the two branches of government have pledged to spend up to $ 500 million combined to upgrade the plant so it can build electric vehicles.

“Retooling will begin in 2024 with vehicles coming off the line in 2025,” said Unifor President Jerry Dias. “So we know it’s a decades-long commitment. ”

It’s unclear how much of the money will come from which branch of government, but CBC News previously reported that Wednesday’s Speech from the Throne is expected to contain a number of policies aimed at strengthening Canada’s electric vehicle industry, both consumer side than for the companies that build them.

Ontario’s Minister of Economic Development and Trade welcomed news of a tentative deal on Tuesday and confirmed that Queen’s Park lawmakers were ready to do their part.

“Our government will always work with our federal colleagues, workers and the auto industry to ensure that the right conditions are in place for the industry to remain stable today and seize the new opportunities of tomorrow,” said a spokesperson for Vic Fedeli told CBC News in an emailed statement Tuesday.

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