Yahoo Autos Stellantis Says Canada Isn't Holding Up its End of the Deal
Stellantis’ Canadian battery plant is up in the air, Stellantis also needs to clean up its facilities in Europe and Hyundai still isn’t building the one car we all hoped it would. All that and more in this edition of The Morning Shift for Monday, May 15, 2023.
1st Gear: They’ll Have What Volkswagen’s Having
Last year, Stellantis and LG Energy Solution announced a plan to build a battery plant in Ottawa. The facility was to receive “undisclosed contributions from federal and provincial governments,” per Reuters, and at the time it was publicized as the largest-ever investment in Canada’s auto industry. As part of the deal, LG was investing almost $1.5 billion of its own money. Yet all of that appears to be in jeopardy now, because Stellantis has reportedly decided it deserves more from the government. From a Reuters report:
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“As of today, the Canadian Government has not delivered on what was agreed to, therefore Stellantis and LG Energy Solution will immediately begin implementing their contingency plans,” Stellantis said in a brief emailed statement, without elaborating.
The real issue here may be Volkswagen. See, VW was awarded a very generous investment from Canada this year for a plant of its own, to the tune of CAD 13.2 million ($9.77 billion). That was apparently much sweeter than what the government promised Stellantis in 2022, which has made the house of misfit brands (and Jeep) jealous. The Reuters report continues:
Stellantis is threatening to pull the plug on the battery plant unless it’s deal with the government is sweetened to the level Volkswagen received this year, the Toronto Star newspaper reported earlier on Friday, citing unnamed sources.
The Star said Stellantis began seeking an enriched deal in Canada shortly after the U.S. Inflation Reduction Act, which offers $369 billion of subsidies for electric vehicles and other clean technologies, passed into law last year.
Canada’s deal with Volkswagen for a battery gigafactory, announced this year, is the biggest single investment ever in the country’s electric-vehicle supply chain.
The federal government has committed to provide up to C$13.2 billion in manufacturing tax credits through 2032, while Europe’s largest carmaker is investing up to C$7 billion to build the plant St. Thomas, Ontario.
It’s unclear what Stellantis’ “contingency plans” are, but it sounds like they involve the company packing up its toys and taking its future plant elsewhere, probably south of the border. The Canadian government shouldn’t be too fussed about that; demand for new auto manufacturing facilities in North America isn’t exactly hard to find these days.
2nd Gear: Stellantis’ Grimy Plants
We now turn to Stellantis’ Pomigliano d’Arco plant outside Naples, where the new Alfa Romeo Tonale and Fiat Panda are made. Some factory workers held a work stoppage there for two hours on Friday, marking three days of protest, over unsanitary conditions. From Bloomberg:
“The plant is dirty and the toilets stink,” [Italian Federation of Metalworkers automotive coordinator Simone] Marinelli said. “Work overalls are missing — some workers have to wait months to have the old and worn out ones replaced.”
Stellantis said it rejected accusations of a lack of attention to working conditions, according to an Italy-based spokesman. The company always acts within the framework of labor contracts and with respect for its employees, while also considering the competitive environment of the automotive industry, he said.
Unfortunately, this “respect for employees” appears to be a trend across Stellantis’ European facilities:
Stellantis Chief Executive Officer Carlos Tavares is known to leave no stone unturned to find cost savings with the strategy underpinning earnings rising to record levels. The concern over facility maintenance due to cutbacks at Pomigliano — where less than half of workers making the Panda took part in Friday’s protests — isn’t isolated with staff at other factories also pressuring management to improve conditions.
Manufacturing sites in France aren’t receiving appropriate investments into their upkeep, said Christine Virassamy, who heads France’s CFDT labor union at the carmaker, one of the country’s biggest.
“Often there are clogged toilets, or soap is missing, or grass that doesn’t get cut,” she said in a phone interview. “Ventilators are missing in summer and it can get stifling in factories.”
Stellantis finished 2022 with profit totaling $17.9 billion, a 26-percent year-over-year increase that outpaced GM’s growth over those same 12 months. It definitely beat Ford, which lost $2 billion. Buy the damn soap.
3rd Gear: Not Hyundai’s Vision
We all love the N Vision 74, Hyundai’s cyberpunk hydrogen-powered concept supercar. “Love” may actually be too modest a description of what many enthusiasts feel for the car, which is why I’m disappointed to relay the latest from Carscoops, which got it on record after some rumors otherwise that the Vision 74 still isn’t destined for series production:
“We are aware of media speculations on the potential commercial production of the N Vision 74 rolling lab development model,” Hyundai spokesperson Derek Joyce told Carscoops after talking to the company’s Korean brass. “However, we currently have no plan to put the model into commercial production.”
Hyundai was forced to deny the rumor following a report from Korean outlet, Money Today. Earlier this week, the outlet claimed that the brand was preparing to host something called “Pony Day” at its design studio in Seoul on May 27. [...]
The outlet was incorrect, Joyce has confirmed. His comments follow a similar denial reported by Korea’s Wikitree, which quoted the automaker as saying that, “there is no plan to mass-produce the Pony Coupe, and there is no Pony Day event planned.”
