Industry watchers are backing Unifor’s opposition to Stellantis NV’s plan to sell its idled Brampton plant to armoured-vehicle maker Roshel Inc., warning the move could set a precedent for other automakers to walk back commitments to Canada.
Contract talks between the union, which represents about 2,200 workers at the plant, and Stellantis broke down on Sept. 11 after the union said it was informed the automaker had signed a memorandum of understanding (MOU) to sell the plant.
Though Roshel has said it could quickly bring workers back to the Brampton facility if the company successfully lands a Canadian military contract to build light utility vehicles, the union has opposed the potential sale.
“The big fear for Unifor, and the fear that I share, is that watching one of the major automakers leave Canada would send a signal to all the rest of the industry that this can happen, not just for Ford and General Motors that Unifor bargains with, but also Honda and Toyota,” said Jim Stanford, an economist and director at the Centre for Future Work.
Compounding the issue is that the provincial and federal governments committed hundreds of millions of dollars to help Stellantis, which owns brands such as Dodge, Jeep and Peugeot, retool the Brampton plant in return for production commitments, he said.
The original plan was for the plant to produce the Jeep Compass before Stellantis moved production of the vehicle to the U.S., citing tariffs on Canadian-made vehicles imposed by the U.S. The company said in a letter to workers last week that it didn’t see a “long-term business case” for making vehicles at the facility.
“It’s too soon to say, ‘OK, you can leave and we’ll just pick up whatever crumbs we can find,’” Stanford said of Stellantis’ proposal.
“Some jobs are better than no jobs, but at this stage, we have to be focused on the principle that companies that want to sell in Canada need to build in Canada … and companies that make deals have to live up to them.”
Charlotte Yates, president of the Automotive Policy Research Centre and former president of the University of Guelph, said allowing Stellantis to reduce its footprint in Canada would have a “cascading effect” at a time when the Canadian auto sector is in a fragile state.
“This is not just about that plant; it’s about saving the automotive industry in Canada,” she said. “Unifor is concerned that if they’re allowed to walk back at the first sign of trouble from what they agreed to with government, then how good is any signature on paper from an automaker?”
Federal Industry Minister Mélanie Joly last week urged Stellantis and the union to return to the bargaining table, saying the government “didn’t participate in any form of negotiation or endorsement whatsoever” regarding talks between Roshel and Stellantis.
She also reiterated Ottawa’s position that the government would sue Stellantis if it reneged on its commitment to find a product for the plant.
“When it comes to the Stellantis plant, my position has always been clear: That plant needs to reopen. We need a new model. If not, we’ll get our money back,” she said.
Ken Delaney, executive director of the Canadian Skills and Employment Coalition, said it was unclear whether repurposing the plant to produce a military product would have the same economic impact as producing a commercial vehicle.
He estimated vehicle assembly directly employs about 30,000 workers, with more than 200,000 employed by parts manufacturers and other suppliers.
But a single defence contract might not have the same spin-off effect on the economy and jobs, he said.
“It’s not as secure as when you’ve got an established brand of a consumer product because it’s not like people are going to stop buying Jeeps or General Motors products or Toyota products,” he said. “Whereas on defence, it really is dependent on the contracts that the federal government might put forward.”
With files from Bloomberg News
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