By Joseph White
DETROIT (Reuters) - Ford Motor (NYSE:F) Co said Tuesday that next year it will start retooling its sport utility vehicle assembly plant in Oakville, Ontario to produce electric vehicles, fulfilling a promise made to Canada's Unifor union during contract bargaining in 2020.
Ford plans to begin overhauling the Oakville complex in the second quarter of 2024, idling most of the factory's production workers until the new EV assembly system starts up in late 2024, company officials said Tuesday during a conference call.
As part of the C$1.8 billion ($1.34 billion) overhaul, the 70-year-old complex will get a new battery pack assembly operation, said Dave Nowicki, Ford's director of manufacturing operations for electric vehicles.
Ford officials declined to say whether the plant will assemble five EV models, as agreed with Unifor during the 2020 contract talks.
The size, timing and location of electric vehicle production investments by Ford, General Motors Co (NYSE:GM) and Stellantis NV will be a central issue in contract bargaining later this year with unions on both sides of the U.S.-Canada border. Both Unifor and the U.S. United Auto Workers want the Detroit automakers to commit to preserving jobs as they transition from combustion to electric vehicles.
The Oakville plant currently builds combustion Ford Edge and Lincoln Nautilus SUVs. The makeover of the factory is part of a $50 billion investment program through 2026. Ford Chief Executive Jim Farley has said Ford will have the ability to assemble 2 million EVs globally by 2026.
Ford officials said Oakville will build the automaker's next-generation EVs, which Ford executives have said will have to be more efficient, easier to assemble and more competitive with the Tesla Inc (NASDAQ:TSLA) vehicles that currently lead in North American market EV sales.
Battery cells for the Oakville-built EVs will come from a factory Ford and battery partner SK On plan are building in Kentucky, Nowicki said. It is too early to tell whether the batteries will meet domestic content requirements to qualify for U.S. Inflation Reduction Act purchase subsidies, he said.
($1 = 1.3478 Canadian dollars)