Job creation tied to Windsor, Ont., Stellantis EV battery plant compared to 'musical chairs': prof
Ian Lee thinks governments will give Stellantis what it wants because of 'politics' and 'optics'
A Carleton University business professor is casting doubt on the number of jobs that will be added to Windsor's economy by an electric vehicle battery factory.
Ian Lee says the country's unemployment level is the lowest it's been since the 1960s and calls the idea that Ontario is desperate to create new jobs as "nonsense," adding the province is already seeing a critical shortage of workers.
Stellantis and LG Energy Solution will draw many of their employees from other plants that are already operating in the region, he says.
"What's going to happen is these companies are going to be — they're not going to admit this publicly — but they're going to be poaching and robbing and soliciting skilled employees from other companies nearby because they need the workers to work there," Lee said.
WATCH | U.S. economy and new incentives put Canada at disadvantage in Stellantis negotiations, prof says
On Friday, Windsor's mayor circulated a petition for residents to sign calling on Ottawa to finalize the NextStar EV battery plant deal.
Drew Dilkens says it would be "unacceptable" for Ottawa to not close out the agreement, and fulfill financial promises. And that stalled talks between Stellantis and governments have left him feeling "deeply concerned."
Earlier this month, Stellantis halted work on its construction of the Windsor battery plant saying it was looking for "contingency plans," and that Ottawa hadn't kept its negotiation promises. The facility was due to open next year after construction began in 2022.
New legislation in the U.S. allows for unprecedented incentive offers for companies, making it extremely challenging for Canada to compete.
WATCH | How a U.S. law contributed to the stalling of the Stellantis plant | About That
Unlike in 2009 when GM and Chrysler were bailed out, Lee doesn't think putting up more money for Stellantis makes sense for the province or Ottawa this time around.
They're going to be robbing Peter to pay Paul. That's not creating jobs.- Ian Lee, business prof
"They need skilled workers. So they're going to go and grab workers from Magna or from GM or from Ford. They're going to be robbing Peter to pay Paul. That's not creating jobs."
"All you're doing is musical chairs circulating the jobs in that economy. So it's not going to produce a net increase in job creation."
Aside from the economic might of the U.S., and Canada and Ontario experiencing a labour shortage, Lee still thinks both levels of government will end up forking over enough money to salvage the deal because of what he calls the "politics" and the "optics" of what's gone on historically in Windsor.
"It's so seductive for a politician, for a leader to say to stand up before the microphones at those announcements … and say, 'I am here to save you, I am producing. I am going to sign billions of dollars to make sure that you are saved."
Instead of forking over more money to save the electric vehicle battery plant in Windsor, Lee says both senior levels of government could be spending "more productively" on things such as critical minerals.
"There's a desperate shortage of critical minerals. And that's what we should be doing. But unfortunately, I think they're going to put it into this plant and match or meet the demands of Stellantis and LG."
The vice president of investment attraction and strategic initiatives for Invest WindsorEssex says he's expecting an answer from Stellantis one way or another later this week.
Joe Goncalves said last week he's heard from U.S. sources that Stellantis is mulling over an existing facility in Michigan that could be transformed into housing a battery module plant.
"I think the company's going to have to make a decision because delaying the construction of the module facility will delay supplying of the vehicle launches — so that it will cost a lot more money to these companies," he said.
"What the mayor is doing [circulating an online petition] is exactly what we need to be doing and we need to be out there in force and pushing this."
Goncalves says over the last 15 to 20 years, Windsor has been struggling to redefine itself, and high local unemployment numbers support that.
In April, Windsor's unemployment rate stood at 6.4 per cent. In March, it stood at 8.3 per cent — the highest rate among major cities in Canada.
"This is a generational opportunity for our community and the mayor of the city and the council. The city saw this opportunity. That's why they made the investments that they made, because they know this investment is just not for today. It's for the next hundred years."
In the automotive supply chain, and sector as a whole, Goncalves says he thinks Windsor can become a hub for battery manufacturing.
"Whether it's mines and minerals and different innovations, and in different supply chain companies from battery cases … We can be the leaders, but we have to be brave about it. We have to take a leap of faith."