BOOM AND GLOOM: A STARK DIVIDE IN SOUTHWESTERN ONTARIO'S AUTO BELT
By: Brian Williams and Jonathan Juha
In one Southwestern Ontario city, forever linked by history to all things jumbo, one of the world’s largest automakers is building Canada’s biggest factory — a $7-billion colossus expected to employ about 3,000 people.
Only 50 kilometres away, in another community, another big automaker has suspended production at a once-revolutionary factory amid weak sales of its only product built for another revolution. The future of 1,100 workers there has been cast into limbo.
In Windsor, Stellantis is currently hiring for the return of the long-promised third shift at the Windsor Assembly Plant, the city’s largest employer with about 4,500 employees, according to union estimates. The third shift could reportedly bring back as many as 1,000 good-paying jobs.
Meanwhile, booming St. Thomas, buoyed by Volkswagen’s arrival, and gloomy Ingersoll, a town where General Motors has pulled in its horns, are a relative stone’s throw apart. Yet the two are worlds apart in the anxiety about the future — both excitement and worry — that’s sweeping Southwestern Ontario’s auto belt, a backbone of one of the province’s most important industries.
Much of the uncertainty stems from President Donald Trump’s push to bring manufacturing jobs to the U.S. from abroad, potentially disrupting a Canadian industry tightly integrated with the U.S. and Mexico. Before Trump’s return to the White House, and the trade tensions that followed his tariffs and threatened tariffs against American trading partners, Ontario built about 1.3 million vehicles a year mainly for export to the U.S.
Another source of uncertainty, and anticipation, one that pre-dates Trump 2.0, is the billions being invested by Big Auto for a shift to electric vehicles and the supply chain they’ll need. It’s a move already reshaping the Southwestern Ontario auto belt that runs from Guelph, Cambridge and Woodstock in the east to Windsor in the west, taking in four auto plants and dozens of parts makers along the Hwy. 401 corridor.
Some automakers, including VW, GM and Stellantis, have bet heavily – with help from Canadian and Ontario taxpayers through their governments – on the transition to EVs, even though gasoline-powered vehicles still dominate sales.
Nowhere is the early fallout of that bet more stark than the mood divide between St. Thomas and Ingersoll.
The first is bracing for an industrial revival and growth that could, by one projection, nearly double its population to 80,000 over the next 25 years. The mayor calls the change “a godsend.”
The other, a town of 13,000, is sweating what the future will bring, with GM “assessing future opportunities” for its Cami factory — the town’s largest employer — after pulling the plug on a weak-selling electric cargo delivery van built there that some had thought would bring a decade of job stability.
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Along a track in St. Thomas in 1885, as the city rode the 19th-century railway boom, the star of showman P.T. Barnum’s travelling circus — Jumbo the elephant, whose name became synonymous with gigantic — was struck and killed by a train, the news telegraphed around the world and landing the city on the map.
Everything about VW’s move to St. Thomas, through its subsidiary PowerCo, fits the superlatives in the jumbo legacy.
At $7 billion, the cost of the gigafactory being built there even eclipses that of another giant electric-vehicle battery plant, NextStar Energy, which Stellantis and its partner LG Energy Solution have built down Hwy. 401 in Windsor.
In sheer size, the VW site is roughly the same as 210 football fields.
Expected to be completed in 2027, the factory will supply VW’s assembly plants in South Carolina and Tennessee.
But that’s not the end of what’s coming St. Thomas’s way. A Norwegian company, Vianode, plans to build a $3.2-billion factory in the city to produce synthetic graphite for EV batteries. The plant could employ up to 1,000 people once fully operational and, according to Vianode chief executive Burkhard Straube, will be the largest synthetic graphite plant “in the Western world.”
For a city that lost a string of industrial employers in recent decades — among them heavy-truck maker Sterling, bearing maker Timken and, nearby, a Ford assembly plant that ran for 44 years — the sudden about-face in fortune is breathtaking.
“It’s a godsend,” Mayor Joe Preston says of VW’s decision to build in St. Thomas. “It will bring generational change.”
Preston said he believes the economic benefits of VW and Vianode’s projects will be long-lasting, but with them will also come big challenges for the city, including the need for significant investment to meet growth demands.
“We have to have electricity and water and wastewater management,” he said. “We have to have good roads if we don’t want it all of a sudden to jam up on us.
“Basically, over the next two or three years . . . we’ve got to prepare a lot of things to be ready to have these industries flick a switch and start making batteries.”
Preston also worries about not making the region’s housing-affordability crisis worse.
“This fails if we can’t house all these employees that come here to work,” he said.
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A trailblazer in Southwestern Ontario’s auto industry when it opened in 1989, the Cami Assembly plant in Ingersoll began as a joint venture between GM and Japanese automaker Suzuki at a time when the North American industry was embracing Japanese production methods and automakers from there were expanding into Ontario.
Honda arrived in Alliston and Toyota set up assembly plants in Cambridge and Woodstock.
At its height, as a three-shift factory producing vehicles around the clock, the Cami plant employed nearly 3,000 between its unionized and non-unionized workers and the benefits spread far beyond the town, with people commuting there from across the region.
Employment would fall amid changes in the industry, including the transfer of some work to Mexico. But four years ago, GM — it parted ways with Suzuki in 2009
bet on an electric future for the plant, announcing it would be retooled to build a new electric cargo delivery van.
The move made Cami the company’s first Canadian plant to shift production from gasoline-powered to electricity-powered vehicles only. Many thought the pivot would deliver long-term stability for the factory and its then 2,000 workers.
One auto analyst at the time called the switch “brilliant.”
Instead, citing weak sales and a challenging regulatory climate, including the elimination of American incentives to buy electric vehicles, GM in late October suspended production at the idled plant, just as hundreds of workers were expected to return from a temporary shutdown that began in May. The company says it will not move the van’s production elsewhere and remains committed to Cami.
Trump ended federal tax incentives for buyers, worth up to US$7,500 for new and used electric vehicles, at the end of September.
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Ironically, reminders of the Cami factory’s electric pivot abound on roadways even with the plant idled. Purolator, Canada’s Post’s courier company, and package-delivery giant FedEx were among the early buyers of the BrightDrop van.
But the vast employee parking lot at the factory sits empty, with the town’s mayor reflecting the broader anxiety about what’s next as GM considers the plant’s future.
“(The town’s mood) is just one of uncertainty — not having an answer, anyway, which way, what’s going to happen, is putting a damper on a lot of things and in people’s moods,” Mayor Brian Petrie said.
Cami “plays a huge economic role” in the town, accounting for about 12 per cent of its tax base and spinning off “inputs to other businesses,” he said.
Even an idled Cami plant generates property taxes for Ingersoll, but with production suspended the town faces a $1.52-million hit, Petrie said.
Finding a new product to build at the plant isn’t the only unanswered question, he said. So is the turnaround time needed to switch to build something new.
“Even if they (GM) do make an announcement, a positive announcement, it’s going to be 18 to 24 months before you probably see anything happen automotive-related,” he added.
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Built up over decades, the Ontario auto industry directly employs more than 100,000 people and accounts for hundreds of thousands of indirect jobs provincewide, according to the provincial government.
That cements the industry into the lives of many Ontarians who depend on the wages and spending it drives. Between them, five automakers have nine assembly plants in Ontario.
In another Ontario auto city, Brampton, uncertainty also hangs over another idled plant that was being retooled and the future of 3,000 workers. Stellantis now plans to build its new Jeep Compass not in Brampton, as originally planned, but at a plant in Illinois. That’s added more unease in Ontario and suspicion by some critics that moves are being made to appease Trump.
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Home sales have been sluggish in St. Thomas but average selling prices steady over the past year, hovering around $550,000.
That’s about $50,000 less than the average in the broader market, dominated by nearby London.
That won’t last, not with the surge in housing demand that the VW and Vianode projects will bring, says Earl Taylor, a city councillor and longtime realtor.
He doesn’t expect prices to hit the heights seen during the pandemic, but sees them going nowhere but up if things unfold as they appear.
“There’s no downside to this that I can see. It’s all upside,” Taylor said, adding that, for homeowners, the time to sell hasn’t arrived yet.
But there’s one segment of the market that Taylor says is already heating up
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homes suitable for conversion to rental units. Many workers who will be drawn to St. Thomas will want to rent, rather than buy, in the early going, he said.
Russell Higgins, president of Macherson Builders, said the plants will mean five to 10 years of steady work for developers like him.
Underlining St. Thomas’s preparation for an influx of newcomers, Higgins’ company recently broke ground on a new development that, once completed, will be comprised of more than 30 townhomes outfitted with secondary units that can be rented out.
“There are going to be a ton of people who will want to buy homes,” Higgins said, adding the real challenge will be building fast enough to meet demand.
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Housing is sensitive to economic cycles and, not surprisingly, the outlook in the Ingersoll area is not nearly as bullish as in St. Thomas.
New builds have slowed and inventory has piled up amid a “lack of consumer confidence,” said Cassandra Benard, president of the Woodstock Ingersoll Tillsonburg and Area Association of Realtors.
Benard, an Ingersoll resident, said uncertainty over the future of the Cami plant, which has dealt with on-and-off shutdowns over the past several years, “seems like a more permanent decision” this time around.
“People don’t have any buyer confidence in our area because people are worried about job security,” she said. “It is, honestly, the number one thing that we’re seeing . . . a lot of people are waiting to see what happens with tariffs.”
Tariffs targeting the auto industry could “decimate” the community, Benard said, noting “many industries here are tied directly to that.”
Buyers, she added, want clarity before committing.
Affordability in Ingersoll is tied directly to job security, with an average sale price around $591,200. Depending on what happens, some Cami workers may need to downsize or move altogether to find employment, Benard said.
“I think if (GM) made an announcement that they were bringing in a new vehicle and they were going back to full production, then we would see a boom in Ingersoll,” she said.
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With prospects of thousands of new, well-paid jobs and workers coming, some small businesses in St. Thomas are already bracing for a lift.
Jennifer Rundle, who owns Handmade Haven Collective with her mother, Marj, hopes to be among those who benefit.
She said the city’s growth was a major factor in her decision to move the candle and craft business from a home studio to a downtown storefront in October.
“The growth that’s coming to St. Thomas, that’s one of the reasons for opening a business down here,” she said. “We see the potential.”
Even Preston, who’s also a business owner, is getting in on the action, opening a new Wendy’s fast-food outlet near the VW site.
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At Louie’s Pizza & Pasta, not five kilometres from the Cami plant, owner Costas Kourtesis says he’s noticed a decline in business he used to get from the idled factory, going back to GM’s decision to retool it to build the BrightDrop.
“Before, when they were making gas vehicles, every Friday (or) a couple of times a week, we used to get a delivery (order) there like 25 (or) 30 pizzas around six o’clock,” he said, lamenting that the retooling ever took place.
“Why break something that is not broken?” he asked.
Kourtesis said the town’s mood has shifted since Cami halted production.
“It’s not just about Louie’s — the whole community takes an impact,” he said.
Customers who once ordered multiple times a week now come only once, and more choose takeout over sit-down meals to save money.
“We don’t have the volume like we used to,” he said.
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Even amid the uncertainties in the industry, Southwestern Ontario’s auto belt still looms large, producing gasoline and hybrid vehicles — those powered by both traditional fuel and electricity — and auto parts for an industry that’s been hit by tariffs on vehicles that don’t comply with the Canada-U.S.-Mexico trade agreement and on essential metals used to make them.
That trade deal, giving tariff-free access to most exports, is scheduled to run until 2036 but comes up for review next summer. What will happen then is not yet clear. Nor is where Prime Minister Mark Carney’s government is headed in its own bid to blunt tariffs and trade tensions in talks with the U.S.
What’s clear to some observers, however, is that demand for electric vehicles — an industry with a large, unfolding footprint in Southwestern Ontario — is not yet where some thought it would be.
Not just Cami, but also NextStar is affected in the region. Its $6-billion Windsor plant has begun production, but the company says it will focus on the rapidly expanding energy-storage sector — not batteries for electric vehicles — in response to slumping demand caused partly by the trade war.
Trade tensions, the end of government buyer incentives and affordability challenges have all taken a toll on demand for EVs, which still cost more than gas-powered vehicles, said David Adams, chief executive of Global Automakers of Canada, an umbrella group for foreign automakers in Canada.
But that doesn’t mean “the transition to electric vehicles or electric power is dead,” he said. “It’s just slower than was anticipated . . . and even though we’re sort of going through a bit of a reset now, that doesn’t mean that that’s not what the future holds.”
Some automakers that were criticized for being slow to embrace EVs “are now sort of being looked at like the wise ones in terms of taking a more measured approach to transitioning their product lines,” he said.
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2025-12-02T14:33:39Z