Shaking off tariff concerns, steel giant opens $100M plant in southwestern Ontario
State-of-the-art facility opened day after federal, Ontario governments announced $8.7B for steel, auto sectors
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The head of ArcelorMittal Tailored Blanks says he believes Canada and the United States will eventually find a solution to the trade war that's hammered Ontario's steel and auto sectors, which is why the steel giant moved forward with a new plant in Ingersoll.
“I have tremendous faith and belief, as do the other leaders I talk to in the industry, that automotive is a critical industry to North America, and the interconnected relationships of automotive are critical too,” chief executive Todd Baker said during the facility’s official opening on Thursday.
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“I can understand that some politicians may have concerns about specific elements of trade agreements. They may have concerns about specific commodities, specific parts, but on the whole, the industry needs Canada, Mexico and the United States working together, so we have faith that the politicians will figure it out.”
The opening of the state-of-the-art, $100-million facility comes a day after the federal and Ontario governments jointly announced a new $8.7-billion package to support companies in the steel and auto sectors.
Most Canadian products continue to enter the U.S. tariff-free, but there's a 50 per cent levy on steel and aluminum and 25 per cent on non-U.S. content on Canada-U.S.-Mexico Agreement-compliant automobiles.
The Donald Trump administration has also threatened to increase levies on Canadian-made vehicles and parts to 50 per cent if a new trade agreement isn’t reached by Jan. 1.
Baker said those market conditions forced the company to hit pause for about two months on the Ingersoll project so the company could assess the plant's feasibility.
Ultimately, he said, the long-term benefits of the facility, where the company will process steel blanks — flat sheets made of different grades of steel and custom-cut into specific shapes — to be used in vehicle frames, outweighed the short-term market turmoil.
“Most companies have put major decisions on hold until there's a level of certainty or clarity about how things will move forward,” he said. “For us, we took a step back when some of these tariffs were announced and when others were threatened, and we made an assessment, and we felt that we needed to go forward, and that's what we've done.”
The Ingersoll facility, which will also include a training centre for workers, is expected to reach full capacity by the year-end, Baker said.
The 154,000-square-foot plant will eventually have the capacity to process up to 100,000 metric tonnes of steel and produce about 20 million parts a year, all destined for the auto sector.
Baker said the company’s products are already used in a large number of brands and vehicles, including Stellantis NV’s Dodge Ram pickup truck and Chrysler Pacifica minivan, produced in Windsor, as well as Honda Motor Co. Ltd.’s Pilot and Passport models.
The opening of the plant also comes at a critical time for Ingersoll, which has been dealing over the past year with General Motors Co.'s decision to idle its CAMI plant, the town’s single-largest taxpayer.
“We sold this land with the goal of finding the community a long-term partner,” Mayor Brian Petrie said, adding Ingersoll beat out 41 other municipalities vying for the investment. “It wasn't about how much money we could get in the short term, but the long-term gain.”
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