Stellantis Says Canada Isn't Holding Up its End of the Deal

“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.

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.

“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.

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.”

“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.”

Ford’s wholesales in China fell below half a million units for the first time in a decade in 2022, continuing a slide since 2016, when the US automaker shipped 1.27 million vehicles and had a market share of 4.6%. That share dropped to 2.1% last year, as Chinese consumers increasingly embrace electric vehicles made by the likes of Tesla Inc. and local players such as BYD Co.

“Our costs are not competitive, and we are working internally and with our partners to reduce costs in all areas,” a Ford spokeswoman wrote in an email response to Bloomberg News. “We can only win through a lean and agile organization. These actions are necessary for us to build a healthier and more sustainable business in China.”

She didn’t specify how many jobs would be cut or provide a time frame.

The price war and ballooning investment in the transition to EVs ate into growth. Of the 10 companies that turned a profit in the quarter, only three posted an increase. That’s down from four in 2022, and all of them in 2021. Again, BYD was an outlier, posting a 410 percent surge in earnings, while Changan Automobile’s profit rose 54 percent.

The dilemma facing all legacy carmakers, not just Chinese ones, is that gasoline cars currently generate more profit and better margins. By selling a increasing number of electric cars, they’re actually making less money, according to [Minghsun Lee, head of greater China auto research at Bank of America Corp].

“But if they want to survive, they have to embrace EVs otherwise they’ll disappear,” he said. “So they have to choose. Worldwide, traditional car companies want to have more EV sales, but profitability will be worse.”

Lee expects passenger car wholesales to stay flat for 2023, with a slight decline in domestic demand offset by growing exports, where Chinese carmakers will be looking for growth. The market is too crowded with dozens of traditional and EV makers, and no major player has exited yet, he said.

“There are too many companies and everyone wants to survive,” he said.