Today marks the formal beginning of negotiations between Unifor and Stellantis, for a collective bargaining agreement between the union and the troubled automaker. The negotiations will undoubtedly feature the usual disputes between an automaker and its workers, but this year’s bargaining is taking place in the context of one big question: the fate of the assembly plant in Brampton. Stellantis notified Unifor earlier this summer that the company is considering closing and selling the Brampton plant, after the plant has been idled for several years now and Stellantis has moved its production to the United States.
Stellantis might be simply playing hardball with their adversaries on the other side of the bargaining table, but it’s not like the threat is wholly imaginary, particularly in the context of the current trade war with the United States and the distinct threat that poses for Ontario’s auto sector. Certainly, other companies seem to be taking Stellantis seriously. According to Bloomberg News, Brampton mayor Patrick Brown is fielding inquiries from Chinese manufacturer BYD about potentially taking over the Brampton plant (for the manufacture of electric buses, not automobiles.)
If that deal were to materialize it would represent a substantial reversal of a prior failure for BYD to capitalize on the enthusiasm for electric buses in North America: the firm opened a plant in Newmarket in 2019 only to see quality issues, a lack of reliable parts, and political tensions between Canada and China contribute to the plant’s closure in 2024, several years after it had stopped making any vehicles (the plant had an odd afterlife make PPE during the COVID-19 pandemic). That was then, this is now, and it’s possible that BYD has learned from its prior failures and wants to take another bite at this particular apple.
The rumours about BYD in Brampton are for now just that, rumours, and in normal times it would be fair for the government to sit back and wait for the details of specific commercial and union negotiations to take place without having any particular opinion about the outcome, beyond the general desire of any government to see Ontario workers well compensated and to see the auto sector on a sustainable footing. These are not, however, normal times, and there’s something very specific that Ontario should have an opinion on: if Stellantis is serious about shutting down the Brampton plant, the government should advise the company that it won’t be allowed to encumber the sale with any kind of conditions for the next owner, particularly any conditions that would prevent another automaker from moving in.
At this point Canadians are probably familiar with “restrictive covenants” thanks to the criticisms of Canada’s grocery sector, where companies like Sobeys and Loblaw use conditions of property contracts to forbid competing grocery companies from moving into certain spaces. But the same legal mechanism has also featured outside of the retail sector. When Resolute FP closed its mill in Fort Frances, it attached a covenant to the property forbidding the new owners from restarting it to make paper products. Mills across northern Ontario have been redeveloped into novel business or industrial parks, but often only after years of demolition, environmental restoration, and unemployment for the prior workers.
There’s currently nothing stopping Stellantis from including, as a condition of any sale of its assembly plant, a prohibition on the new owner from using the facility for automaking. Premier Doug Ford and his cabinet should, however, regard this as intolerable. The Brampton plant literally exists because of public loans (both federal and provincial) extended to the American Motors Corporation in the 1980s; Chrysler bought AMC and it too was the recipient of generous multi-government largesse — most memorably after the 2008 financial crisis and recession when Ontario and Canada spent billions to bail out Chrysler (the predecessor to Stellantis) as well as General Motors. This isn’t ancient history, either: as recently as 2018 the government of Justin Trudeau was writing off billions in unrecoverable loans that had been extended to Chrysler in the name of preserving Canadian and Ontario jobs.
This plant wouldn’t exist without the public support it has received over the years, both directly to get it started and indirectly in decades of corporate welfare for Chrysler and then Stellantis. The Ontario taxpayer has a clear and direct interest in making sure that this site provides the best value not to the bottom line of a foreign-owned automaker, but to Brampton and the wider network of Ontario’s automaking ecosystem. In short, Stellantis cannot be allowed to turn its Brampton plant into an automotive dead zone just because it’s done extracting what it can from the Canadian taxpayer.
Ontario shouldn’t immediately wade into what is still primarily a dispute between the carmaker and its union. But if Stellantis really does try to cut its ties to Brampton the message from Queen’s Park should be unambiguous that walking away will mean just that: that Queen’s Park will use its legislative powers to nullify any restrictive covenants Stellantis puts on the land to ensure that any new owner of the site can maximize their advantages, including being a future competitor for Stellantis.
For one thing, this warning alone could cause Stellantis to think twice: will they really want to end their interest in the Brampton plant if a stronger competitor will be able to turn it around in short order? Even if it doesn’t halt the company in its tracks, this is the kind of signal Queen’s Park can send to the rest of the auto sector: we’re clearly willing to work with automakers to get through a difficult time but we’re not going to be taken for suckers, either.