The $14-billion deal that will see Volkswagen, the world's largest automaker, set up a manufacturing presence in Canada for the first time in history, took a year of negotiations on both sides of the Atlantic Ocean.
But the talks that led Volkswagen to choose southwestern Ontario for the location of its first battery plant outside Europe all started with a whim.
Volkswagen has sold cars in Canada for decades, but it has never made them here. Still, like other large automakers, it is making the transition to produce electric vehicles. And producing the batteries that power them requires a solid supply chain. Canada also had electric-vehicle manufacturing deals announced or in the works with Ford, General Motors, Honda and Toyota.But, as always, Europe's car manufacturers were proving elusive.
But Champagne said he thinks the first glimmer of a potential partnership came a few hours before, when he chased down Volkswagen's chief procurement officer after seeing him on the street. In August, with Prime Minister Justin Trudeau and German Chancellor Olaf Scholz looking over their shoulders, Champagne and Herbert Diess, who was then the CEO of Volkswagen AG, signed an agreement in Toronto to co-operate on making electric-vehicle batteries and their components.
Amid that uncertainty, the Canadian ministers had a big question to answer: If Volkswagen was going to build a plant in Canada, where would it go?The city of fewer than 40,000 people, located about a 30-minute drive south of London, is in the heartland of Ontario's auto belt. More than eight million vehicles rolled off the assembly line of a Ford plant in St. Thomas between 1967 and its closure in 2011.
St. Thomas began putting together a new industrial park in its northeast corner, buying two large of tracts of land and working to get the area serviced with everything a new tenant would need: water, electricity, wastewater and even access to a functional rail line.But to make that happen, Preston said, some of the work needed to happen on the sly.
Just as Champagne pointed to his accosting of an executive on a Toronto sidewalk as a key moment, Fedeli joked -- during the public announcement of the deal -- that another was getting PowerCo's chief operating officer, Sebastian Wolf, hooked on Wendy's.In a written response to questions, PowerCo CEO Frank Blome gave a tongue-in-cheek nod to the minister's Wendy's joke. "We deny this strongly," he said, adding a smiling face emoji.
"This is the right place for you to be," Fedeli recalled Ford telling Volkswagen executives that day. "This is a place you'll be able to call home for a hundred years." Central Elgin was disappointed, some residents said they were never consulted and nearby farmers have said they fear the impact of big industry taking over agricultural land.The company aims to build a gigafactory that will be twice the size of those planned in Germany and Spain. Planned to begin operating in 2027, the plant is expected to be able to make enough batteries for up to one million electric vehicles every year.
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