This is the first in a three-part series taking a deeper look at the landmark deal to bring electric vehicle production to Ontario. In the second installment, we asked: how realistic are dreams of a domestic EV industry? In the third, industry executives and policy experts share their recommendations for getting Canada’s EV industry into gear.”
OAKVILLE, ONT. — For months before Ford Motors’ surprise announcement late last month of a $1.8-billion deal to build electric vehicles in its 67-year-old assembly plant in the Southern Ontario town of Oakville, there was a sense of unease and restlessness on the factory floor.
Rumours of a closure or relocation were rife amongst workers. They were amplified by a slow trickle of media reports in which auto analysts speculated that Oakville was on life support. The Ford Edge and Lincoln Nautilus were apparently on the brink of being discontinued—a fact already known to senior members of Canada’s largest private-sector union, Unifor, which represents the auto workers—and the union did not expect new products to be assigned to the plant after 2023.
Ford Motor Company’s $1.8-billion investment to turn its Oakville assembly plant into an electric-vehicle manufacturing hub was hailed by Unifor, the auto workers’ union, as a long-term solution to keep jobs in the plant. But the coming era of electric vehicles, while promising in one sense, threatens to inject a new dose of disruption to the very makeup of the traditional assembly line. Electric vehicles have no engines and require fewer parts, and thus less labour to assemble. Auto workers at the Oakville plant told The Logic that while there is optimism about the announcement, there is also a sense of nervousness on the factory floor— whose jobs will go and whose will stay when EVs arrive in 2026?
So the September 22 announcement that Ford had decided to keep the Oakville plant afloat by allocating five new lines of electric vehicles to the plant starting in 2026 should have been greeted with jubilation.
But on a Zoom call five days later, assembly-line workers peppered members of Unifor’s bargaining committee with questions about the new EV deal. The mood was one of cautious optimism, according to four Ford employees who spoke to The Logic on the condition of anonymity because they were not authorized to speak publicly about internal company or union affairs. “I think there was some nervousness,” said Michael (not his real name), a worker who attended the online meeting. “It was on Zoom, so [it was] hard to really know, but there were some people who weren’t happy.”
“I think it is good news,” said another worker, referring to the EV deal. “But I wanted more detail on the terms of the agreement.” Many of the questions on that Sunday Zoom meeting boiled down to a central issue: whose jobs would go, and whose would stay.
The trepidation is understandable. After all, for close to two decades now, auto workers in the West have been front and centre of the slow decay of the manufacturing sector, casualties of automation, cheap labour and inadequate regulation. Though the coming era of electric vehicles is promising for these workers in that it secures a future for the plant, it also threatens to inject a new dose of disruption into the very makeup of the traditional assembly line.
Unifor was looking for a quick stamp of approval, a strong ratification that it could take back to Ford in a show of unity toward the automaker’s continued investment in Oakville, despite the phasing-out of vehicles that could be built more cheaply outside Canadian borders. But at the crux of the uneasiness displayed by some employees was confusion about what car-making looks like in the age of Tesla. After over a century of Fordism—of standard mass production for bulk consumption—the car company that more or less invented the model now replicated across the globe is facing change.
“The Big Three automakers have mastered the art of producing in bulk, but are less seasoned when it comes to designing Tesla-like assembly lines, where each car is put together in its own workstation,” noted Jeffrey Faber, research analyst and strategist with the UAW-Ford National Programs Center in Detroit. “They’re still testing, experimenting, figuring out whether to build EVs in bulk, and how to do so.”
The Oakville deal means jobs—but what kind of jobs? And what happens in the two-year span between early 2024, when the Edge and Nautilus are no longer manufactured, and 2026, when EV production starts? Further out into the future, how many workers would it even take to put together an electric car?
Ford’s Oakville plant is an assembly complex. That means it doesn’t manufacture car parts, such as the engine. Rather, its 3,400 active workers receive those parts from various suppliers and other Ford factories across the world, and put them together.
It’s a crucial distinction in the context of electric-vehicle manufacturing. “The plants that are going to be most impacted by EVs are the ones that build engines and transmissions, because you don’t need an engine in an electric vehicle. It is battery-powered,” said Faber. “It might eliminate some people in an assembly plant temporarily, but it is the engine plants and the parts manufacturers that are going to feel the impact.”
That said, every part of the production chain is affected. Powertrains—the internal guts of a car that include the engine and transmission—are far less complex in EVs than in traditional internal combustion engines. They require fewer parts, and hence fewer workers to assemble them, and even fewer workers and factories to supply parts to begin with. A 2019 Morgan Stanley note predicted that the greater production and sales of electric vehicles could actually cost the auto industry three million jobs. Herbert Diess, Volkswagen Group board chair, recently warned that it would take 30 per cent less labour to produce an electric car.
It is impossible to know at this stage what the future of Oakville will look like, even with EVs. “We do have concerns, obviously,” said Marc Brennan, a member of Unifor’s bargaining unit. “But at the same time, with no new products coming our way, we knew we had to go into bargaining asking for something substantive to sustain the plant into the long term.” And so Unifor scrambled to secure a new deal that would guarantee some semblance of job security for the plant’s 3,400 workers. “It really is about young people being able to plan 20 years ahead, which will make a significant difference in their life,” Unifor national president Jerry Dias told reporters on the day of the announcement.
Yet Dias acknowledged the workforce would shrink, from 3,400 people to 3,000, and he was unable to provide many definitive details of how the Oakville plant will be revamped and what the factory floor might look like in the long run. “It is difficult to project six years down the road, what the headcount will be,” he said in an interview with The Logic. “You can take your best stab at it today based on the information at hand. For example, when Ford launched the Edge, they thought they were going to hire a couple of hundred people and they ended up hiring about 1,500. So it’s impossible to know.”
There are assembly-line jobs that will almost certainly be lost. “The reality is we have a lot of people in our plant who dress the engines,” Brennan said, referring to the process in which an engine block arrives at the Oakville facility from Ford’s Cleveland factory, and additional parts are added to it. “There are 350 to 400 people between two shifts, and our concern is that those jobs will be lost.”
To mitigate those losses, one key aspect of Unifor’s bargaining with Ford was to ensure batteries would be assembled at the Oakville plant. Once assembled, a single battery is approximately the size of a mattress, and transporting it across borders is a costly and cumbersome task, Brennan explained. “That process of assembling it should create 200 to 300 jobs, we’re estimating. It may not offset all the job losses from the combustible engine, but [it offsets] some of them.”
Workers whose jobs are to inject fluids to cool an engine also stand a chance of losing work, Brennan said. On the other hand, those who work in the “trim shop” part of the assembly line—fixing carpets, doors, headliners and dashboards into a car—will simply do the same for an electric vehicle.
By 2023, approximately 700 jobs in Oakville could be phased out through attrition. “We have quite a few folks on the brink of retirement,” Brennan said, adding that a “good-news item” is Ford’s decision to manufacture five vehicles, as opposed to just the two that are produced in the factory right now. “That could mean more jobs in the body-shop part of the line. The sheet metals and the door panels could be really different, which could need more workers.”
Ford has tentatively agreed to assembling the batteries in Oakville, but it’s far from a done deal. In 2023, Unifor and Ford will be back at the bargaining table, and details of what specific jobs will be lost on the assembly line, who will have to be retrained, and how that retraining process will take place will presumably be clearer.
There’s some frustration among the rank and file workers that the union isn’t able to tell them more. But the lack of detail comes from Ford’s own lack of certainty about how the Oakville plant will be redesigned to accommodate the manufacturing of five new models of electric vehicles, according to a union source with knowledge of the bargaining process. “Our folks are asking, ‘How will different departments change? How will the workflow change?’ Ford has given us some hints, but not a lot. My read of the situation is that they know what they want to do conceptually, but they don’t have the specifics even on their end,” the source said.
Indeed, North American auto giants are facing an identity crisis of sorts, perhaps an inevitable corollary of a low-carbon future, akin to the one the oil and gas industry started facing five years ago when oil prices collapsed. That transition is complicated by the demand question; it’s still very murky when consumer interest in EVs will surge.
Electric vehicles are still just one per cent of the U.S. market, although global sales of EVs have increased exponentially over the past decade. A forecast from the International Energy Agency predicts that EV use will rise from four million vehicles in 2018 to 120 million by 2030, which would make up over seven per cent of the global car fleet. A 2020 report from BloombergNEF indicated that passenger EV sales increased from 450,000 in 2015 to 2.1 million 2019, and are predicted to reach 54 million by 2040. The caveat is that market penetration will be higher in Europe and China, which have had a headstart in the EV game.
“They are trying to figure out how quickly all of this will happen,” said Faber. “There are 369,000 vehicles made in Oakville right now. Do they want to build a facility that just has a maximum capacity of 35,000 units and looks great like Tesla, or something that could churn out 300,000 vehicles when consumers go crazy for EVs? That’s still being evaluated.”
The answer will determine the number of jobs that will remain at the plant in the medium term once electric vehicles begin to roll off the assembly line. It will also shape retooling plans, and how long it might take to completely revamp Oakville’s factory floor into an EV assembly hub.
“It is not the EVs that I am worried about yet,” said one worker, who asked to be identified only as Daz. “It’s what will happen when the Edge is done, the Nautilus is done, and they strip the assembly floor to rebuild it. If that takes two years, that’s going to be tough for me.”
Unifor has told its workers that there will inevitably be job losses during the transition, but there are provisions within the collective agreement that ensure workers who are temporarily laid off receive supplemental income in addition to the employment insurance they are eligible to collect. These same provisions sustained incomes for workers who were temporarily laid off between March and May of this year, when the factory was forced to shut down because of the COVID-19 pandemic. “Of course they’ll be laid off. But people will be compensated during that time,” Dias told The Logic.
The question is, for how long? And what will that cost? Daron Gifford, an Ohio-based auto analyst at consultancy firm Plante Moran, estimates that retooling a facility like Oakville for EVs alone would run US$500 million, a cost Ford will have help covering with a $590-million cash infusion from the federal and provincial governments.
According to the union source, Ford has indicated retooling could take as long as 16 months. “Our great hope is that there won’t be a prolonged period of idling for the workers. They will need skilled tradespeople working to rebuild the new assembly line and there will be a period of retraining for some workers to learn about EVs,” the source said. Ford did not respond to The Logic’s queries on how long the factory floor revamp will take, or how many workers it would need for the process.
Sixteen months would be a short transition. Confidential documents obtained by The Logic show that in a variety of other auto plants across the world, the retooling period has been 17 to 24 months long. General Motors’ Detroit-Hamtramck facility, for example, began retooling its factory floor in March to produce all-electric pickups and SUVs, and is expected to complete that process in late 2021. The plant’s 600 assembly workers were transferred to other GM plants, and only 70 skilled trades workers remained to help with the retooling process, a GM spokesperson told the Detroit Free Press back in March.
In Germany, Volkswagen’s Zwickau plant conversion has so far taken more than two years, though it is occurring in multiple stages, with both traditional vehicles and electric vehicles simultaneously being produced in different parts of the plant for a period.
One of the quickest known conversions took place at the Ford plant in Cuautitlán, Mexico, the production hub of the Ford Fiesta. The company ceased production of the Fiesta in August 2019, and expects to have the first Ford Mustang Mach-E available for sale in late 2020. “The Mexico plant is a low-volume plant that just produces the Fiesta, and there wasn’t a whole lot going on there to begin with,” said Faber, referring to the technical simplicity of the assembly line versus a factory that produces four to five models of cars simultaneously. There are also different working standards, with workers willing to work longer hours for the same pay, in order to complete the process, he added.
For Michael, one of the Oakville workers who attended the Zoom ratification meeting, the fact that there is an organization fighting for the jobs of auto workers is itself a luxury. He’s been at the Oakville factory for six years now, and watched his hourly salary go up by $7 in that time. “That’s more than I could have ever gotten in construction,” he said, referring to his previous job. “It’s hard for me to not feel happy about the future of this plant.”
In the end, 80 per cent of Unifor members voted in favour of the Oakville EV deal, a source said. The union has chosen to line up its next round of negotiations in 2023 alongside the United Auto Workers (UAW), because it gives them more leverage at the bargaining table to stand alongside their American counterparts. Part of the negotiations, according to UAW spokesperson Brian Rothenberg, is what will happen to Ford’s engine plant in Cleveland, the one that supplies Oakville with engines for the Edge and Nautilus.
“Sometimes the auto plants shuffle their workers around or change their supply chains to mitigate job losses,” said Gifford, the auto analyst. “But I think what the union really needs to be doing right now, especially in the U.S., is to immediately push to get their people retrained in this new environment—while they still have jobs.”
Hundreds of kilometres away in Windsor, Ont., there were auto workers closely observing the events taking place in Oakville, heartened by the prospect that an automaker would consider injecting a North American plant with such an influx of money.
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“When I heard the EV announcement for Oakville, I thought, ‘Wow, maybe I could go work over there, learn some new stuff,’” said one worker at Ford’s Windsor factory. In the long run, she’s particularly vulnerable to the rise of electric vehicles because she works in Ford’s engine plant, which supplies engines to the popular F-150 trucks.
“I’ve seen this plant go from 6,700 people to 1,500 people,” she said. “I don’t want to be here when they shut this thing down.”