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Some of Jody Schneider’s doubts about the electric vehicle transition started when she lost her job because of the EV transition. Until last year, she and 150 others built front and rear suspensions for muscle cars produced at an auto assembly plant in Brampton, Ont.

But they all lost their jobs when the plant closed near the end of 2023 for an 18-month retooling so it can produce battery electric, plug-in hybrids or internal combustion engine vehicles.

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Schneider and hundreds of other auto-parts workers were pitched that the EV transition — which is drawing billions of dollars in new investments — would revitalize their sector, but it hasn’t always panned out that way.

“If I hear that one more time, I’m going to want to slap somebody,” she said.

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In recent years, automakers and battery companies have committed to investing about $46.1 billion in Canada’s EV supply chain. In turn, they have received $52.5 billion in committed financial support from the government to help offset the costs of the transformation, which is expected to create new plants at a pace and scale not seen in this country for at least a generation.

Eventually, economists say those plants will create thousands of direct and indirect jobs, but for now, as EV sales grow at a slower pace than expected and as costs pile up for automakers, there have been hiccups and false starts that are sending tremors through the entire sector, leaving many auto-parts workers unemployed.

Auto-parts suppliers, which make seats and suspension systems as well as knobs for dashboards and numerous other things that automakers use, account for more than half of all jobs in the entire sector, according to Statistics Canada and other estimates.

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The sector is being shaken up as automakers close plants for a lengthy retooling process or look to reduce their costs by bringing work in-house that they had previously farmed out to external contractors.

Amidst high inflation and rising unemployment, the immediate pressures wrought by the EV transition are causing many auto-parts workers to question the wisdom of the government’s strategy.

“We’ve been hearing about electric for years, but all of a sudden, ‘Oh, it’s here now, and we’re not even ready,’” Schneider said. “Now, it’s like everybody’s got to come to a complete halt.”

Of course, the impacts of the EV transition vary depending on whether one works for an automaker or an auto-parts supplier.

The plant in Brampton, operated by Stellantis NV, is expected to reopen in late 2025 — part of a $3.6-billion overhaul of its Canadian operations, which were juiced by around $1 billion in government support — and the company has said it expects to bring back three shifts at some point. That would mean it will operate 24 hours a day in a throwback to better days.

That by itself has helped buoy spirits among Stellantis employees, many of whom have also received benefit packages to tide them over while the plant is down for the 18-month retooling process.

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On the other hand, the jobs held by Schneider and 150 other colleagues were all terminated.

In January, she said Android Industries LLC hired a skeleton crew to decommission the 186,000-square-foot plant in Brampton where it used to build suspensions. They watched flat-bed trucks haul away the robots they once used, threw some equipment in the trash and then wondered how they would find their next job.

“It was sad,” she said, adding that as temperatures drop, she’s starting to worry about some of her former colleagues who haven’t found work yet.

Even if their former employer, Android Industries, wins a contract to make suspensions for Stellantis when its Brampton plant ramps back up again, they would all need to reapply for their jobs.

“I keep telling people (who work for Stellantis), they’re on a cruise ship,” she said. “We’re on a boat.”

In the past few years, more than a dozen auto-parts companies have closed a plant in Canada, leaving untold numbers of workers unemployed.

Unifor, the labour union that represents the largest number of auto-sector workers, has established a handful of action centres, with support from Ontario, where unemployed members can find job boards, sign up for courses to build new skills or polish their resumés. (Disclosure: Unifor represents the Financial Post newsroom.)

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“It’s not a good time to be unemployed,” said Schneider, who has become a coordinator at one such centre in Brampton. “People are talking about, ‘Well, I’ve got to sell my house,’ but it’s not a good time to sell. I don’t know how many more things can go against us, but I got to keep pushing on, (and) I keep telling people, ‘Don’t worry, things will start to look up.’”

Against this backdrop, the momentum in the EV transition has also come into question.

Likeleli Seitlheko, an economist at TD Economics, said EVs have had “phenomenal growth,” accounting for 12 per cent of new light-duty vehicle registrations in the first half of 2024 in Canada. But adoption has been inconsistent across provinces, according to a report she wrote.

It noted that more than 60 per cent of new EVs have been registered in either British Columbia or Quebec every year since 2019. She attributed those high growth rates to longstanding rebate programs that help mitigate the cost of an EV, which can be as much as 31 per cent more expensive than a similar internal combustion engine model.

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“It takes time for the market to develop,” Seitlheko said. “The more you see (EVs) on the road, the more you hear about them from your friends and neighbours, it helps convince more people to accept EVs.”

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She said that a decade is about as fast as the transition can occur, citing Norway as the example. But even there, EV adoption was aided by longstanding government rebate programs.

In Canada, the federal government has mandated that all new vehicles must be zero-emission vehicles by 2035, which means the shakeup in the auto-parts sector is likely to continue for years to come.

Analysts say the new plants will act as anchors for the auto sector and create the conditions that allow auto-parts companies to thrive.

“Canada’s entire auto strategy since the 19th century has been that if you get an auto plant, it brings with it various spinoffs,” Charlotte Yates, president of the University of Guelph and a political scientist who has studied the auto sector, said. “That’s the building blocks of the sector.”

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But laid-off auto workers hoping to emerge at the other end of this transition with a job inside a battery plant have said it is difficult to find upskilling resources.

Yates said it’s easier for governments to invest in university programs to train future workers than it is to upskill people already in the workforce.

“That we’ve not seen yet,” she said, “and those are the ones who will be potentially most negatively impacted by restructuring and we’ve seen this for decades in different industries.”

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A 2022 Unifor policy paper, Navigating the Road Ahead, called for a transition program to evaluate the auto-parts sector and help workers.

Part of the problem is that some companies make products that will become obsolete as the EV transition progresses. For example, any company that works on internal combustion engine-related parts, which have been the most valuable components, has a dimmer future since these engines will be phased out and replaced by electric motors in an all-EV world.

“It is critical for government to understand the country’s supplier vulnerabilities, where these firms are located and develop strategies to support them,” Unifor said in the paper.

Justin Simard, a spokesperson for the Ministry of Innovation, Science and Economic Development (ISED), said via email that the government is committed to helping auto-parts workers and companies.

For example, the federal government in August committed to provide $44.3 million in financial support — with Ontario contributing an additional $20 million — to a Goodyear Tire & Rubber Co. project to overhaul its plant in Napanee, Ont., so that it can make all-terrain tires, including for EVs, and improve the plant’s overall energy efficiency.

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The ISED spokesperson said there has been support for other projects and that the 2021 budget included $250 million for “upskilling” the workforce in high-growth industries. A partner was recently picked to deliver on those services.

Of course, the span of government programs related to the EV transition already reaches far and wide, and includes consumer incentives such as rebates on EVs and investments in charging stations. There have also been upgrades to the electrical grid, which needs to expand as more vehicles don’t use gasoline.

The whole transition could end up costing a total of $300 billion by 2040, according to one estimate.

More recently, the federal government announced other policies aimed at supporting its EV transition industrial strategy, including 100 per cent tariffs on Chinese-made EVs and 25 per cent tariffs on Chinese steel and aluminum.

There have also been calls for tariffs on critical minerals such as graphite that are used in battery anodes.

So far, there has been widespread support at multiple levels of government for building an EV supply chain. From Prime Minister Justin Trudeau and his top cabinet ministers to Ontario Premier Doug Ford and the main trade group for the auto-parts sector, plenty of heavy hitters have thrown their support behind the strategy to build an EV supply chain by investing in automakers and battery companies.

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“In fairness to the government, the supplier sector has pushed for and supported this strategy,” Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, said, “but it has not been without anxiety and not without risk.”

Volpe said there have been discussions about whether the anchor strategy would work with the EV transition — which he has cast as a transformation unlike any other the industry has ever experienced — or whether a shift in strategy is needed.

Canada does not have any major domestic automakers, so one option that has been suggested is that instead of investing in foreign automakers, the federal and provincial governments could have invested in the national auto-parts ecosystem.

But Volpe said there’s too much evidence supporting the idea that auto-parts companies thrive when they are located near a major assembly or battery-making plant.

“Everything works from where the car is getting built,” he said. “You could have 1,000 suppliers, but if the cars are getting assembled in Japan, our suppliers are never getting included.”

Still, the EV transition is plagued by questions about the pace and high costs, as well as many automakers resisting the idea of building EVs and doing so under government pressure to reduce overall carbon emissions.

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“Everybody in the auto industry is saying we kind of jumped to EVs too quickly,” said George Zeni, vice-president at Clover Tools Manufacturing Ltd. in Concord, Ont., a metal stamping, welding and assembly company. “They put trillions of dollars into the EV side of things and now they’re saying, ‘Hmm, maybe we should have gone hybrid first and then to EVs so the infrastructure could catch up.’”

Much of his company’s work is stamping and pressing — building hinges for hoods and trunks, window regulators and seat tracks — “things that are going to be in the car,” he said.

Some of its business derives from work on powertrain and engine parts that would be phased out in an all-EV world, but that’s still years away, Zeni said.

He said the auto-parts sector has constantly faced turbulence during the past few decades. For example, he recalled that around 2007, when China’s economy ascended, massive amounts of work moved overseas and never returned.

That’s one reason why Zeni said he supports putting tariffs on Chinese-made EVs.

“The problem is you’re dealing with a communist country,” he said. “They tie their currency to the U.S. currency, subsidize their industries. We’re not on the same playing field and until we are, you can’t compete.”

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More to the point, he said cost pressures are ever-present: automakers always push suppliers to lower their costs, streamline their operations and find new efficiencies.

Still, Clover Tool is taking advantage of the current shake-up by investing in a larger press, which will allow it to expand its abilities and potentially capture more business. Zeni estimated it’s a $15-million expansion, which involved digging a 15-foot hole below the plant to house the new larger press.

A larger press means larger parts, which means more opportunities to add value, he said. That means more jobs.

Schneider, the auto-parts worker, said she tells her former colleagues they’ll get through the transition one way or another. But some will probably only find work that pays less than what they have ever made.

Stellantis has been putting some auto-parts work out to bid as it gears up to reopen the Brampton plant next year, and Schneider is hoping that Android Industries bids and receives the contract so that some of her colleagues can get their jobs back again.

But even if another company wins the work, she said her colleagues all hold years of experience.

“Who wouldn’t want an experienced workforce?” Schneider asked.

• Email: gfriedman@postmedia.com

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