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[News Article] Ontario offers more incentives to attract LGES-Stellantis battery plant


Ontario offers more incentives to attract LGES-Stellantis battery plant



By Park Jae-hyuk, The Korea Times - The Canadian province of Ontario has offered to share the burden with the country's federal government to give larger incentives to secure the construction of a joint battery plant run by LG Energy Solution (LGES) and Stellantis. The latest development indicates the companies have gained an advantage in their ongoing negotiations, according to industry officials, Monday.


The Korean battery maker and the U.S. carmaker stopped building a joint factory in Windsor, Ontario after to Canada did not fulfill its promise of offering higher incentives, while providing Volkswagen with handsome benefits. As a result, the Canadian federal government convinced Ontario to offer additional incentives to let the construction resume.


Last week, Ontario Premier Doug Ford apparently accepted the federal government's request and confirmed that the province will put more money on the table in its negotiation with LGES and Stellantis.


"This is all about saving jobs and giving people the quality of life they deserve in southwestern Ontario," Ford told reporters last Friday (local time), without disclosing the specific amount of incentives that Ontario will provide.


Canada's Minister of Innovation, Science and Industry Francois-Philippe Champagne, who came to Korea last week with Prime Minister Justin Trudeau, welcomed Ford's comments, mentioning his meeting with LGES executives here.


"I also took the opportunity earlier this week to have dinner with the president of LG Energy Solution in Korea," he said. "Actually we had the dinner for more than two hours, and he even wrote back to me this morning."


Last Wednesday, Champagne and LGES President and Chief Risk Management Officer Lee Bang-soo attended the dinner hosted by President Yoon Suk Yeol for the Canadian prime minister, although LG Group Chairman Koo Kwang-mo and LGES Vice Chairman and CEO Kwon Young-soo did not meet the Canadian delegation.


"I think we have a common understanding about the way forward," Champagne added.


Unifor, a general trade union in Canada, also said it was encouraged by Ford's willingness to put more money into the joint battery plant. It has called on the federal government to take urgent action so that the construction of the plant can resume.


As of Monday morning, however, both LGES and Stellantis declined to confirm whether they would resume the construction, given that the result of their negotiation with the Canadian government has not been announced officially.


Industry officials expect the two companies to get what they want from Canada, as the country has tried to prevent them from considering the U.S. as an alternative location. When Trudeau visited Korea, he and Champagne also met with the heads of Korea's electric vehicle and battery companies, signaling the Canadian government's strong interest in attracting them.


"If LGES and Stellantis pull the plug on their joint battery plant, Canada will lose the opportunity of creating lots of decent jobs," an industry official said on condition of anonymity.


Source: https://www.koreatimes.co.kr/www/tech/2023/05/419_351459.html