Some good news for EV's in Canada!

[Struja]

I gave you a disagree...nothing personal, but there's a lot more to this story

All of the legacy car makers in Canada (including Honda and Toyota) are struggling with electric vehicle production. On top of that, Canada is an expensive place to manufacture ANYTHING. Our labour laws, red tape and cost of labour makes it much more attractive to manufacture in Mexico, or any State with right to work rules and at-will termination.
I predicted that GM would exit Canada within 10 years of repaying the loan to the Ontario/Federal Governments. They're shuttering Oshawa, St Catharines is a shadow of what it was, as is Windsor, and Ingersoll will be the next victim. That's 10-15,000 jobs. GM is kissing us off. I'll never buy another GM product. Ever.

Fiat-Chrysler has a new plant in Windsor, and it makes the Pacifica plug-in, so it's probably good for now. The Brampton assembly plant is old....and without a contract in 2 years....so it could go.

Honda and Toyota both had expansions, but only produce gas vehicles.....Their mantra is to make cars where they sell them. It will be interesting to see if they re-tool for Hybrid or electric.

Ford has some parts plants, and Oakville assembly left. The truck plant and St Thomas car assembly were closed years ago. Oakville is old, and not cost efficient compared to US and Mexico plants. It was probably going to shut down.

Which brings me to my 3 main arguments:
1. Corporations make things where they can make better margins/maximize shareholder value. Many jurisdictions offer "deals" to keep businesses there. Our deal is to help them re-invent themselves with electric technology, and provide them intelligence in doing it. Ford is ponying up 2/3 of the cost. This will keep a lot of jobs and intellectual property in Canada. It will also prod Ford et al to move to electric.

2. There has also been mention of the supply to the auto industry. This is bigger than the manufacturing. Canadian companies like Centerline and ATS will make the assembly lines. Canadian parts suppliers like Linamar and Magna make hundreds of parts for these cars. The steel used is Canadian steel. The aluminium is Canadian aluminium. On the MRO side, there are hundreds of Canadian suppliers (My old company sold over $1,000,000 to the industry). The whole industry makes up well over 100,000 jobs. If we don't step up and support this, it would be disastrous to our economy.

3. The argument that we should use these funds to pay rebates does not have any ripple effect. Tesla, Audi, VW, Polestar etc. have no production in Canada, AND THEY NEVER WILL. With the exception of dealer profits, none of this rebate stays in Canada. I am not against rebates, but I think the Ford investment is a better use of funds.

/rant

This is a really good (and informative) post. I largely agree with it but it neglects one important factor which I was alluding to in my criticism. If nobody (or next to nobody) wants Ford’s EV offerings (and I see no evidence that Ford is on the cusp of making significant inroads in the EV market). My concern is that once they retool and give it the old college try (and fail), they pack up and leave anyway.

 

[TheRFMan]

and I see no evidence that Ford is on the cusp of making significant inroads in the EV market

I think the Mach-E could be rather popular in Canada (probably mostly Quebec, since I think it may qualify for incentives there). It will be the lowest-priced AWD EV in Canada, which is very desirable for winter, and will be able to rely on a mature dealer and service network.

Not everyone needs huge range (I, for one, do not), so I think a roomy standard-range AWD crossover with decent cargo space for $56,000 Canadian dollars including freight could be pretty appealing. An extended-range version that will be similar to the Model Y will also be available. I'd probably go for the Y if I needed the long range, but judging on the popularity of the M3 SR+ (more than 50% of sales of M3 in Canada), there's a market for 350-ish km range EVs.

 

[MexiCanuck]

I wonder what the same amount of money would have bought if offered to Tesla. Maybe nothing. But I wonder.

 

[Struja]

I wonder what the same amount of money would have bought if offered to Tesla. Maybe nothing. But I wonder.

Or if they had given that money to Canadian companies that are trying to advance battery/solar/renewable technology.

 

[McFlurri]

Or if they had given that money to Canadian companies that are trying to advance battery/solar/renewable technology.

Which Canadian Automaker should they have given the money to then?

Fact is, that we don't have one. So by injecting this money into improving the FORD Oakville plant, It has a direct trickle down effect to all of the Canadian businesses that support automakers in Canada AND the Canadian mining industry.

 

[Struja]

Which Canadian Automaker should they have given the money to then?

Fact is, that we don't have one. So by injecting this money into improving the FORD Oakville plant, It has a direct trickle down effect to all of the Canadian businesses that support automakers in Canada AND the Canadian mining industry.

Read carefully. Did I say Canadian automakers? How about these five (as an example):

• Agora Energy Technologies Ltd.: Based in Vancouver, Agora is working on a non-metal, long-life battery that stores and uses CO2 to generate clean electricity
• Calogy Solutions: Based in Sherbrooke, Que., Calogy is designing thermal management technology to combat EV performance issues in colder weather
• e-Zinc: Toronto-based e-Zinc is making a long-lasting, zinc-based energy storage unit that is fire-resistant and recyclable
• G-Batteries: Based in Ottawa, G-Batteries is developing technology to improve the efficiency and cost of lithium-ion batteries for use in EVs and other applications
• Salient Energy: Based in Dartmouth, N.S., Salient Energy is working on a zinc-ion battery that is both cheaper and longer lasting that those currently available for energy storage applications.

 

[Vawlkus]

My thoughts on Ford mirror these.

 

[McFlurri]

Read carefully. Did I say Canadian automakers? How about these five (as an example):

• Agora Energy Technologies Ltd.: Based in Vancouver, Agora is working on a non-metal, long-life battery that stores and uses CO2 to generate clean electricity
• Calogy Solutions: Based in Sherbrooke, Que., Calogy is designing thermal management technology to combat EV performance issues in colder weather
• e-Zinc: Toronto-based e-Zinc is making a long-lasting, zinc-based energy storage unit that is fire-resistant and recyclable
• G-Batteries: Based in Ottawa, G-Batteries is developing technology to improve the efficiency and cost of lithium-ion batteries for use in EVs and other applications
• Salient Energy: Based in Dartmouth, N.S., Salient Energy is working on a zinc-ion battery that is both cheaper and longer lasting that those currently available for energy storage applications.

Just because they didn't invest this money directly into a wholly owned Canadian company, doesn't mean it wont affect a Canadian owned company.

This announcement also isn't going to be the last....

 

[Struja]

Just because they didn't invest this money directly into a wholly owned Canadian company, doesn't mean it wont affect a Canadian owned company.

This announcement also isn't going to be the last....

Again, not even close to what I ever said. If you watch @Vawlkus ’s video, it illustrates my point even further. I am all for supporting Canadian workers, and Canadian investment but this was not even close to the best way to spend 600 million of our taxpayer dollars.

 

[McFlurri]

Again, not even close to what I ever said. If you watch @Vawlkus ’s video, it illustrates my point even further. I am all for supporting Canadian workers, and Canadian investment but this was not even close to the best way to spend 600 million of our taxpayer dollars.

lets just agree to disagree about this.

One cool thing though that I just read about today is a wholly owned Canadian built and designed EV out of Windsor. THAT would be great to put investment in to!

 

[DMC-Orangeville]

Again, not even close to what I ever said. If you watch @Vawlkus ’s video, it illustrates my point even further. I am all for supporting Canadian workers, and Canadian investment but this was not even close to the best way to spend 600 million of our taxpayer dollars.

Well, my comment on the video....
It's far too simplistic, and it's the same kind of FUD that the $TSLAQ folks spread around about Tesla. There's much more about cash flow, long term debt, etc that has to be considered. A company may have increased their cash, while posting a huge loss. You can disguise/interpret a lot in basic financial statements. - I'm not defending Ford (or their unions). Like all legacy auto companies; they DO need to change or they will be in trouble.

Ford needs to pare down their brands. EG: Lincoln alone has 4 SUV models. I thought Ford's decision to exit all sedans was stupid, as well. Keep an economy, mid size, full size, luxury sedan, and sport model, (1 of each), plus a cross over, mid size, and full size SUV.....and keep the F series going, in both fuel and electric
Ford needs to cut overhead. In particular, they have too many factories, an item in the video that should have been exploited
Ford needs to develop more alternate fuel vehicles, and the technology behind them.

The investment in Oakville speaks directly to the last 2 items above. Ford will be closing plants around the world, but it won't be Oakville....at least not yet. Ford will also be investing in newer tech cars. You point is well taken (earlier), that they may not be cars that we want to buy. I hope they knock it out of the park. It's really the only way Canada can play in the auto market, in the future. Perhaps, as well, there will be some new spin-off suppliers that emerge for the new-tech manufacturing.

Also
Strictly on a tax out/tax in basis, Ford Oakville and their suppliers probably employ 10,000 people. (Yes, it's a guess) If they each were paid an average of $75,000 per year - paying $20,000 in tax each. If Ford closed next year, the Feds and Provincial government would be out $200,000,000 per year. This doesn't include corporate taxes (even if Ford doesn't make money, most of their suppliers do). If Oakville doesn't pan out/can't make batteries/makes cars no one wants, they'll still be around for anther 3 years.....so the government will at least break even on the tax out. This model isn't what we want, but at least we get something back.

Maybe Ford won't make it, or merges. They definitely won't if they stay status quo. At least this investment gives them, and Canada, a shot.

 

[Struja]

@DMC-Orangeville - just so we are clear... my wife is from Michigan, my mother is from Michigan...pretty much everyone I am related to works for one of the big three or one of their suppliers, so I get a lot of what you said and as a general rule I am very empathetic with the employees.

Unfortunately (and here comes the bad news), Oakville only employs 3,400 employees and if that 600 million were put into other Canadian companies (like some on my brief list above) you would still get your return on tax dollars, you would be pushing battery innovation, pushing green innovation and putting money into a fully Canadian company.

Call me cynical but I just think this move fits both with what Trudeau and D. Ford hope to project as being “for the people” and I am just not buying it.

 

[DMC-Orangeville]

@DMC-Orangeville - just so we are clear... my wife is from Michigan, my mother is from Michigan...pretty much everyone I am related to works for one of the big three or one of their suppliers, so I get a lot of what you said and as a general rule I am very empathetic with the employees.

Unfortunately (and here comes the bad news), Oakville only employs 3,400 employees and if that 600 million were put into other Canadian companies (like some on my brief list above) you would still get your return on tax dollars, you would be pushing battery innovation, pushing green innovation and putting money into a fully Canadian company.

Call me cynical but I just think this move fits both with what Trudeau and D. Ford hope to project as being “for the people” and I am just not buying it.

As @McFlurri stated.....we'll just have to agree to disagree.

My number of 10,000 included suppliers - the suppliers would have to release people, should Ford leave Oakville. In my "old" world, there were 2 electrical suppliers for the Ford MRO contract, and each had 2-3 people dedicated to the Ford plant. They'd be gone. That's a small part of the supply chain. Truckers, parts manufacturers, all of the MRO companies would all have to let folks go. So 10,000 may be high, but probably not far from this.

Throwing a bunch of money at start-ups is probably more risky. Yes, it's great when a small Canadian entrepreneur makes it, but far more often than not, they fizzle out, and fairly quickly, for many reasons. They might have a better chance if they have a market for their products - and Ford could be a market for them. 3 of the companies that you named are a possible supplier to Ford and others.

Am I cynical about Trudeau and Doug Ford's sincerity? Absolutely. There is little doubt that Unifor was told that the plant would close, and soon. They contacted the various Governments to try to broker something. I don't know who brokered the battery and electric car plan, but it fit the Government narrative about investing in a green economy. I still think it was good for all of us.

Over and out on this now.....thanks for the civil discussion

 

[Struja]

@DMC-Orangeville - yes, we will have to agree to disagree. I think your numbers of the employees connected to Oakville is off by at least a factor of 2. My mother in law just retired from a Tier 1 supplier to the big 3. Her company RCO had no dedicated personnel to Ford, rather ran plastic parts to any auto company that ordered from them (before that she was at Continental Plastics which was a supplier to Tesla for a short while). I think any companies who supply Ford only do so as a part of their overall business plan, so I would suspect the total number is less than 5k and potentially much less.

As for startups...my list wasn’t exhaustive, just an example but the reason why a lot of startups fail is because they lack the capital to compete. Nothing that $600 million couldn’t fix. Also, I am not saying my idea is perfect, maybe far from it, I just think it is better than the Oakville plan but certainly much less sexy for the politicians.

If you notice, I also tried to find a cross section of companies from almost every part of Canada, which would also be beneficial in supporting the idea that Canada is more than Ontario and Quebec. I mean, I didn’t include any companies from Alberta or Saskatchewan, but once their provincial leaders realize the fossil fuel industry is a relic of the past, I am sure their entrepreneurial spirit will lead to many innovative upstarts.

Oh and one last thing...didn’t we learn from Ronnie Regan in the 80’s that “trickle down” doesn’t work?

 

[richyrich]

Am I cynical about Trudeau and Doug Ford's sincerity? Absolutely. There is little doubt that Unifor was told that the plant would close, and soon. They contacted the various Governments to try to broker something. I don't know who brokered the battery and electric car plan, but it fit the Government narrative about investing in a green economy. I still think it was good for all of us.

I think this is precisely what happened and the only reason we see Trudeau and Doug Ford working together - you couldn't pick two more opposing worldviews in Canada. There's no doubt Ford were about to lay off everyone and move the jobs to Mexico where it's just far far cheaper to build cars. The only thing that stopped them is us paying to run the place for a couple of years.

I expect Ford will build and refine their EV manufacturing here in ON on our dime, then shift it all to Mexico in a couple of years - it just makes business sense. The message to anyone in auto manufacturing in ON should be clear by now - plan to get out while you can. Where to? Who knows. I though the Lib plan to build an ON green sector was a good idea and ideal transition for people and companies in this sector but I understand most people didn't see or want that. Likely too late now so we'll just figure it out as we go.

 

[DMC-Orangeville]

Even better news.....Chrysler invests $1.5B in Windsor for electric vehicles. No government assistance
Fiat Chrysler to invest up to $1.5 billion in Windsor plant to build electric vehicles | Financial Post

 

[McFlurri]

Even better news.....Chrysler invests $1.5B in Windsor for electric vehicles. No government assistance
Fiat Chrysler to invest up to $1.5 billion in Windsor plant to build electric vehicles | Financial Post

agreed! MUCH better!

Thank you for sharing!

 

[cdswm3]

Even better news.....Chrysler invests $1.5B in Windsor for electric vehicles. No government assistance
Fiat Chrysler to invest up to $1.5 billion in Windsor plant to build electric vehicles | Financial Post

Not so fast...

"Fiat Chrysler is in talks with the Canadian government about subsidies for the new electric platform, Dias said."

FCA will have it's hand out also.

 

[DMC-Orangeville]

Not so fast...

"Fiat Chrysler is in talks with the Canadian government about subsidies for the new electric platform, Dias said."

FCA will have it's hand out also.

I missed that.......and it makes sense that FCA would do it as well, if there's money to be had. Nice catch.
It's still good that we *should* continue with an auto industry.

Okay then who is next?
GM is in talks with Unifor, but I just don't see them committing to Canada.
Toyota?

 

[Struja]

I missed that.......and it makes sense that FCA would do it as well, if there's money to be had. Nice catch.
It's still good that we *should* continue with an auto industry.

Okay then who is next?
GM is in talks with Unifor, but I just don't see them committing to Canada.
Toyota?

I wish Toyota would have committed to EV’s 10 years ago. Weren’t they once partnered with Tesla, like a lifetime ago?