Province’s pitch for auto plant land smells of politics: observers
Rural communities are being urged by the province to gather massive tracts of land — up to 1,500 acres — to attract auto investment to Ontario.
But one national automotive analyst says he’s “flabbergasted” by the move, suggesting the Progressive Conservative government wants to appear to be active in the auto sector after the recently-announced closing of General Motors’ Oshawa assembly plant. “I have never heard of anything like this before,” said Dennis DesRosiers, an auto analyst with the firm that bears his name. “This is hard to figure out. The likelihood of a major assembly plant coming to anywhere in North America right now is near zero. The chance of there being a real prospect out there right now is very low.”
After a decade of hot sales, auto production is cooling and every automaker has “capacity” — meaning existing plants have room to build more vehicles and a new plant isn’t needed.
The letter sent recently to rural politicians says the government has been speaking with automakers about their needs in locating a new plant in Ontario.
“One of the biggest barriers automakers face if they want to build or expand an auto assembly plant is the availability of large-scale sites for manufacturing ... our plan includes a Job Site Challenge which will give municipalities, that wish to participate, the opportunity to propose sites of 500 to 1,500 acres for industrial expansion,” says the letter from Ontario’s economic development ministry.
“We will partner with the successful proponents to make sure that development opportunities are competitive. This will of course include streamlining the approvals processes for planning, environmental and servicing.”
The letter came after the Ontario government announced a new automotive initiative, called Driving Prosperity, which followed GM announcing it’s closing its Oshawa assembly plant this year, cutting about 2,500 jobs.
“I’m not sure why they’re doing this,” said Sean Dyke, economic development director with the city of St. Thomas.
“The timing around GM and Oshawa is convenient, but it’s a good idea to have an inventory of sites available.”
The risk, however, is that municipalities may invest time and money to study the land assembly and compile such a list, all for nothing DesRosiers, added.
“That sort of politics is possible, but there is a risk. If you play politics it can backfire on you. I’m flabbergasted by this, I’m really trying to figure it out.”
St. Thomas and Elgin County are well-positioned for the study because there are about 700 acres ready from the demolished former Ford St. Thomas assembly plant in Talbotville, as well as another 700 acres of privately owned land that was also intended for the automaker to use.
“We could find that land, literally in minutes,” Dyke said. “We can be investment-ready when it comes. But I’m not going to spend a lot of time and money getting ready for this.”
Ford closed its St. Thomas factory in 2011 after a 44-year, eight-million-vehicle run. Ontario has watched the lion’s share of new plant investment in the auto industry go to the United States and Mexico in recent years, though Southwestern Ontario — home to several major plants and dozens of parts suppliers — has seen major upgrades and retooling, totalling billions of dollars, at GM’s Cami plant in Ingersoll and Fiat Chrysler’s Windsor operations.
In a statement, Ontario’s economic development ministry said the challenge is based on successful models from some U.S. states. “We know there’s interest. We’re already starting to hear from municipalities that plan to participate, and we’re expecting to hear from more,” ministry spokesperson Sarah Letersky said.