Industry Minister François-Philippe Champagne has committed billions of federal taxpayer dollars to a Field Of Dreams strategy for electric vehicles: If we build it, they will come.
Where actor Kevin Costner’s movie character built a baseball diamond in the middle of his Iowa cornfields, federal and provincial politicians have put up serious money into creating an EV ecosystem, on the theory that automakers will follow up with far larger investments in plants and people.
In former farmlands on the outskirts of Ingersoll, Ont., Mr. Champagne’s faith is being rewarded. A year after the federal minister and Ontario Premier Doug Ford each pledged $259-million to retooling General Motors Co. factories for EVs, the Detroit-based company is expanding its operations and taking the near-shoring approach to an extreme level.
GM, in step with most North American manufacturers, is attempting to shorten global supply chains that the pandemic and Russian invasion of Ukraine revealed as all-too-vulnerable to disruption. The automaker’s recent experience in Southwestern Ontario offers a case study in these vulnerabilities.
In 2021, GM announced plans to invest $1-billion to build electric delivery trucks – branded as its BrightDrop line – at its CAMI plant in Ingersoll. The following year, the federal and provincial governments put money into the project, along with a retooled factory in Oshawa, Ont. Last December, Mr. Ford and Prime Minister Justin Trudeau were on hand to watch the first BrightDrop vans roll off assembly lines.
The assembly lines didn’t run for long, In July, GM had to temporarily shut down its almost-new CAMI facility because of a lack of batteries. The bottleneck reflected teething problems at a plant in Lordstown, Ohio, a joint venture between the automaker and South Korea-based LG Chem Ltd.
The battery factory opened in August, 2022, and GM chief executive officer Mary Barra told the Reuters news service that production has been hampered because “our automation equipment supplier is struggling with delivery issues.” Until the robots are up and running, she said GM and LG are being forced to build battery modules by hand, on manual assembly lines.
In recent weeks, GM made two announcements about its plans for the Ingersoll plant, announcing a shift in strategy that justified the politician’s faith.
First, the automaker announced that in October, the BrightDrop factory will be idled. Vehicle production is only expected to resume in spring 2024. When GM has to mothball a $1-billion facility less than 11 months after opening because of a shortage of parts, there’s clearly a supply chain issue.
Second, GM moved to permanently clear its bottleneck in Ohio by building a new factory in Ontario. Batteries that used to make a five-hour trip from Lordstown to Ingersoll will now take a five-minute journey from one side of the CAMI plant to the other.
GM’s new facility will take small battery cells – picture a mix of metals in a little box – seal them, stack them into modules, wrap them in insulation, add cooling and wiring gear, then move the completed product onto BrightDrop assembly lines. The plant is expected to open in the spring, bringing 300 additional jobs in Ingersoll, a town previously known for its cheese.
When she announced the expansion of the facility – with no government money attached – GM Canada president Marissa West said: “Our CAMI plant is playing a critical role in accelerating GM’s all-electric future.” On Ms. West’s watch, GM has also made major EV investments at plants in St. Catharines, Ont., and Bécancour, Que.
The public has every reason to query the price tags on federal and provincial support for the automakers – up to $13-billion in subsidies for Volkswagen’s battery plant in St. Thomas, Ont., and $15-billion for a Stellantis NV and LG joint venture in Windsor. These are massive investments of taxpayer money, and deserve scrutiny.
But GM’s experience in Ingersoll shows that once governments commit to an EV strategy, the automakers do come through.